Evening star. [volume], September 25, 1939, Page A-5, Image 5

About Evening star. [volume] (Washington, D.C.) 1854-1972

Image provided by: Library of Congress, Washington, DC

                
.Italy Is Described
As Sincere in Wish
For Neutrality
Nation May Even Be
Laying Foundations
For Balkan Bloc
By WALTER DURANTY.
' ROME, Sept. 25 (N.A.N.A.).—
Italy’s attitude looks much clearer
In Rome than it did from Paris or
London. It can be summed up in
one word—neutrality—to which
might be added the qualification,
“with malice toward none.”
That is the essence of the clear
but ardent speech in which II Duce
broke his long silence, maintained
since last March. Never was the
Italian genius for clarity and rea
son better expressed than in this
speech, which sees the futility and
horror of war, yet realizes that noth
» ing save a miracle can avert a con
flict which, as Mussolini says, has
not yet fully begun.
In the last three days, the Italian
press has been playing up the head
line ‘ War Without Object.’’ arguing
that it is fantastic to plunge Eu
rope into slaughter for “the impos
sible task of restoring Poland to
Its pre-war boundaries and sov
* ereignty.” With singular uniform
ity, the Italian press attributed no
blame to Germany, nor did it sug
gest that the allies were insane to
continue the war for Poland’s sake,
but it declared with quiet insistence
that “all the king's horses and all
the king’s men cannot put Humpty
Dumpty together again,” and, there
fore, asked whether the game is
worth the candle.
Blow to Peace Move.
Foreign circles in Rome were in
clined to regard this as the opening
gun in the long-heralded ‘‘peace of
* fensive,” but whatever hopes were
entertained here in that direction
received a shattering blow from the
partition of Poland. About Russia,
Italy has no illusions, and is itself
far too realistic to attribute to Rus
sia any aims now or in the future
Have those of cold-blooded self
interest.
Rome understands that it may
be to Germany's benefit to present
Russia as its partner in an unholy
alliance against the Western capital
ist democracies, but Rome looks also
at the maps and notes what a star
tling price the Russians already have
claimed for adherence to a pact with
Germany. A common frontier hence
forth with Germany, occupation of
the Polish oil fields, a red barrier
between German Poland and Ru
mania and Hungary may well be
items Germany did not contemplate
when it signed the original bill.
But least of all nations, as II Duce's
Bpeech showed, the Italians indulge
in wishful thinking, and do not allow
themselves to overlook the possibili
ties that may arise from Russia's
action. It is idle to deny that
. thought of Russian invasion of Bes
sarabia is far from welcome here.
There is all the difference in the
World between a partition of Poland
that cannot fail to contain the germs
of future conflict between Slav and
Teuton and the revival of militant
Fan-Slavism, in the Balkans.
Would Set Balkans Aflame.
It is not thought here that such
A contingency is probable, but the
mere idea is more than uncomfort
able, because it would hardly fail to
set the whole of the Balkans aflame,
and where then would be the hopes
for neutrality, not only for the
Balkan states, but perhaps for Italy,
too?
Even before II Duce’s speech, it
was clear that this country was no
less sincere than the United States
in its stand for neutrality. Neither
the Italian nation nor its army have
** much sympathy for Adolf Hitler's
dream ox European hegemony.
There has been absurd exaggera
tion, not to stay deliberate lying, in
reports published abroad before the
outbreak of war about the domi
nance of the Gestapo in Italian
affairs or the presence of German
troops on Italian soil. Perhaps there
“is a section of hot-headed youth
which allowed itself to be dazzled
by grandiose visions, but such a
group is representative neither of
the Italian people nor the govern
ment.
Italy's “line” is shown by the
amicable arrangements with Greece
to withdraw troops from the Greco
Albanian frontier. That arrange
ment is meant by Italy, and accept
ed by Greece, as a pledge not merely
of Italy’s desire for neutrality, but
of its hope that other Balkan coun
tries would take notice and under
stand.
May Ask Neutral Bloc.
" It doubtless is too much and too
6oon to say that Italy aims at for
mation of a neutral Balkan bloc, but
to suggest that the foundations are
being laid for something of the sort
Is neither premature nor exagger
ated.
Which gives, therefore, vast im
portance to Soviet intentions. Rome
sees them three ways—Russia is
driving the hardest of bargains with
Germany and already has made it
„clear it will grab what it can where
it can, but does not, at least now,
want war or bellicose adventures;
second, Russia still is playing a lone
hand, but intends to play it hot
and heavy in the Baltic and Bal
kans alike on the lines of the new
Soviet, imperialism; 'third, Russia
and Germany are united In spirit
and purpose to smash the French
and British empires and take what
spoils they can. Neither point two
r
nor three gives any satisfaction to
Rome, which never, it may be said,
viewed the Russo-German pact with
enthusiasm. The first possibility is
considered here most likely and is
faced with equanimity.
In this doubtful and hazardous
moment, President Roosevelt’s mes
sage to Congress comes as a wel
come reinforcement of Italian hopes
of neutrality. Its dignity and res
traint sounded the identical note
struck by Mussolini and tends to
hearten and confirm the Italian
government in the wisdom of the
course it is following. Italy desires
to remain friends with France and
England, but can never forget they
are belligerents. Like the United
States, Italy stands aside and wishes
to stand aside, and feels, accord
ingly, that there is a bond between
the two countries which it hopes
will be strengthened.
Nazis, Lacking Kaiser's Capital,
Have Own Way to Pay for War
Debt Huge, Gold and Exchange Totals Small;
Third Reich Can Raise Money at Home Easily
By WALLACE B. DEUEL.
Chicago Daily New* Foreign Correspondent.
BERLIN. Sept. 25 (by Radio).—
Lacking the capital assets with which
Germany entered the first world war
and determined to avoid the fiscal
mistakes that the .Hohenzollem em
pire made between 1914 and 1918,
the Nazis have set out to finance
Germany’s participation in the pres
ent war by methods which differ
drastically from those used 25 years
ago, a survey of the regime’s war
time fiscal measures, thus far, shows.
Imperial Germany of 1914 had at
least three notable capital assets
which the Nazi Germany of 1939
conspicuously lacks:
1 In 1914 the Reich had assets
abroad, expressed in terms of foreign
exchange estimated from 20,000,
000.000 to 35,000,000,000 marks. Most
of these assets, furthermore, were
in the form of securities or were
otherwise relatively easily realizable.
Germany enters the present war,
however, with foreign holdings esti
mated (by Dr. Rudolf Eicke, a direc
tor of the Reichsbank) at no more
than 5,000,000,000 marks and most
of these holdings can be realized
only with the greatest difficulty, or
not at all, partly because they are
largely in the form of industrial
plants, docking and storage facili
ties and the like, and partly because
foreign exchange restrictions have
been adopted so extensively all over
the world in recent years.
Debt Smaller in 1914.
2. The Reich national debt was
much smaller in 1914 in proportion
to the national income than the
present national debt and Hohen
zollern Germany’s ability to borrow
was. therefore, greater.
The German national debt at the
end of 1913 was 4,900,000,000 marks,
or the equivalent of 12.25 per cent
of the national income for that year,
which was estimated at 40,000,000,000
marks.
The Reich debt at the outbreak
of the present war, on the other
hand, was probably at least 45.000,
000,000 marks (the' exact figure is
a state secret), which amounts to
57.69 per cent of the national in
come of 1938, estimated at 78.000,
000,000 marks. The ratio of national
debt to annual tax revenue is much
the same now as it Was 25 years ago.
The debt in 1913 was equivalent to
2.1304 times the income from taxes
of that year (2,300,000,000 marks)
and the present debt only 2.5423
times as great as tax revenues for
the past fiscal year (17,700,000,000
marks). \
But the proportion of the national
income taken in taxes in 1913 was
much lower than that taken now—
approximately one-fourth as much
—and, therefore, could be more
easily increased then to keep pace
with an increase in expenditures
than is now the case.
Had Gold Reserves In 1914.
3. The Reich of 1914 had sub
stantial gold reserves, which Nazi
Germany lacks.
The gold holdings of the Reichs
bank at the end of 1913 totaled
1,067,000,000 marks. (Reserves of
other pre-war state banks were
negligible.) There was a good deal
of gold coin in circulation at that
time, furthermore. By calling in
this coin and carefully husbanding
its resources the Reichsbank actually
increased its gold holdings in the
course of the war.
The Reichsbank now, however,
lists gold reserves of only 77,000,000
marks. The Nazis have further
gold holdings which are unlisted.
The total probably amounts to at
least 200,000,000 marks, possibly even
twice that much. But even maxi
mum estimates credit the Third
Reich with only a fraction of the
gold that the Second Reich had
when it went to war.
In general, the Germany of 1939
already has been “living on its fat"
and undertaking to "starve itself
into greatness” for several years,
whereas the Germany of 1914 had
considerable reserves on which it
could draw. This difference sets
definite limitations to the methods
by which the Nazis can finance the
new World War.
Nazi State Has Advantages.
On the other hand, the Third
Reich also has certain advantages
which the Hohenzollern empire did
not enjoy.
The Nazis also enter the war with
certain capital reserves, such as the
nationwide contributions made dur
ing the summer toward financing
the annual party conference at
Nurnberg which never took place.
Hitler had named it in advance,
“The Congress of Peace” (a gro
tesque irony) and advance payments
made by tens of thousands of work
men’s families toward the low-priced
"people's cars,” whose production
now has been suspended in favor
of that of military planes. Both
these funds have been taken over
for financing the war. They amount
to tens of millions of marks—but
are still only a fraction of the re
serves which the Reich had to draw
upon in-1914.
More important than these re
serves, in the long run, the Nazis in
financing the present,war can profit
—and are profiting—by the expe
rience of the Hohenzollerns in the
UfnrU
Nazis Have Closer Control.
The Nazis also have much closer
control of every phase of national
life than the regime of 1914 did;
they had the country organization
ally and psychologically prepared
for war long before the war came,
they understand much better than
the imperial regime did how to keep
up public morale, and they are con
centrating their national resources
and national energies on prosecution
of the war much more thoroughly
than the Hohenzollern regime.
Price control keeps consumer costs
down, gives the Reich a greater
share of national income, while
rationing and anti-hoarding laws
give the populace little else to do
with their purchasing power.
These considerations combine to
explain the differences between the
methods whereby the Germany of
1914 set out to finance the first
World War and those whereby the
Germany of 1939 is setting out to
finance its war.
The chief new war taxes which
the Nazis have introduced are a 50
per cent surtax on all incomes over
2,400 marks ($960 at par) yearly;
Increased levies on tobacco, beer,
liquers and champagne, and a spe
cial contribution to be made to the
Reich by state and local govern
ments, amounting to 15 per cent
of their past shares in income, co
operation and turnover taxes col
lected by the Reich.
These war taxes are expected to
yield additional revenues of 4,000,
000,000 to 5,000,000,000 marks per
year—depending, obviously, on main
tenance of the national Income on
a high level and continued avail
ability and consumption of tobacco,
beer, liqueurs and champagne.
Total tax revenues for the fiscal
year of 1939-40, orginally estimated
at 23,000,000,000 marks, now are ex
pected, thanks to war taxes, to
amount to 24,000,000,000 marks.
Wage cuts enforced by the re
gime, notably the abolition of extra
pay for overtime, will hit especially
hard laborers in the armaments
and machine manufacturing in
dustries and the building trades,
approximately one-fourth of whose
total earnings in recent months
consisted of such overtime pay.
For its immediate financial needs
upon the outbreak of the war, the
government borrowed 2,500,000,000
marks from the Relchsbank. These
borrowings were reflected in an
increase of banknotes in circulation
in the first week of the war,
amounting to 2,197,000,000 marks.
The Reichsbank also put the greater
part of its holdings in coin into
circulation, its holdings declining
from August 23 to August 31 by
101,800,000 marks. Further decline
was prevented by the issue of one,
two and five mark notes. The low
est denomination of paper money
previously was 10 marks.
Dies
(Continued From First Page.)
“scared to say what they think.”
‘scared to say what they think.”
However, he explained, some of
them have lived in this country
so long “they don't care what hap
pens in Germany anf more,” but
the great majority are patriotic,
loyal American citizens.
Mr. Seger recited several cases to
show how Hitler's agents in this
country threaten to intimidate
German-Americans. His best illus
tration concerned a furniture store
dealer in Yorkville, N. Y., who, he
said, had a year’s advertising con
tract with his paper.
After the initial advertisement
appeared in the weekly. Mr. Seger
said a storm trooper of the Ger
man-American Bund called on the
merchant and asked him if he did
not have an uncle in Stuttgart.
The merchant, the witness de
clared. replied affirmatively. Then
the storm trooper asked:
“How would you like to have him
run into trouble?”
After the experience, Mr. Seger
said, the merchant canceled the
advertising contract.
Mr. Seger described how, after
escaping from a German concen
tration camp into Csecho-Blovakia,
Nazi officials seized his wife and 33
month-old daughter and held them
in a concentration camp in an effort
to force him to return. He said his
wife and daughter are now in
this country, having been released
through the intervention of Lady
Astor, who heard his testimony be
fore a committee of the British Par
liament,
Contrary to many reports, the wit
ness declared Jews in Germany are
not the only victims of TIitler. At
least BO per cent of those placed
in concentration camps, he said, are
German citizens who opposed the
Fuehrer’s policies, and only 10 per
cent are Jews.
Mr. Seger. at the outset of his tes
timony, said he wanted to make it
"perfectly clear” that any Nazi or
ganization throughout the world is
to be regarded as an agency of the
German Reich government “and
cannot be looked upon as a private
organization.”
"While Democratic nations take
great pains in distinguishing care
fully between a political party as a
private organization and the govern
ment or administration in power,
even if this power has been achieved
by the party,” he added, “the Nazi
party in Germany has acted differ
ently.”
All organizations affiliated with
the Nazi party, he subsequently em
phasized, "are part and parcel of
the German Nazi dictatorship, and
this, of course, does include all Nazi
organizations abroad. Any Nazi or
ganization, in any part of the world,
therefore, according to the German
legislation, must be looked upon as
a German governmental agency, as
an alien organization.”
Mr. Seger closed his testimony by
denying certain statements Mr.
Kuhn made during his appearance
before the committee. He said the
bund leader had denied his con
versations with Hitler during a visit
to Germany several years ago had
touched upon achievements of the
bund in the United States.
"This statement is not true,” de
clared the witness. “In Mr. Kuhn’s
own newspaper, Weckruf und Beo
bachter, of December 10, 1936, re
port is given about a speech made
by Mr. Kuhn himself in San Fran
cisco on November 18, 1936. In
this report it is stated that Mr
Kuhn described the reception in
the chancellery in Berlin as the
highlight of the whole trip to Ger
many, and about the conversation
held with Mr. Hitler saying to the
American delegation: "Now you go
back and continue your struggle.”’
Neutrality Changes
Will Not Cut Down
On Shipbuilding
Trade With Neutrals
Due to Increase, Says
Maritime Commission
Br the Anocltted Preu.
Professing no concern that neu
trality law changes might lesser
the need (or American ships, offi
cials said today the Maritime Com
mission Intended to continue iti
building program at the presenl
rate.
The neutrality bill drafted by t
Senate foreign relations subcommit
tee includes a prohibition againsi
American ships carrying any good:
to belligerents.
However, commission officials sale
they were convinced that increasing
trade with neutral countries woulc
provide a demand for most if not
all of the ships forced from com
merce in the war zones.
“American flagships now are car
rying only about 30 per cent of thii
country’s foreign commerce,” oni
official said. “With the withdrawa
from ordinary commerce of the ship
of warring nations, there obvlouslj
will be greater need for Americas
ships to serve neutral countries.
"The European war also is ex
pected to result in increased com
merce between the United State!
and Latin America, since warring
European nations cannot continui
to give the necessary attentior
to retain their present trade.”
The commission recently steppec
up its building program. It hat
ordered a total of 125 ships in i
two-year period.
Some persons close to the com
mission predicted that it woulc
order at least 25 more vessels be
fore the end of the year.
Approximately 300 American flag
ships now sail the various foreigr
trade routes. Nearly 200 of thcs<
operate in the North and South
Atlantic, trading with neutral coun
tries.
“^n 1940
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