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    Will Europe Go to War?

    By Ludwig Lore

    The Nation
    July 31, 1937
    Vol. 145, No. 5, P. 127-129


  1. It has been reliably estimated that the World War cost Germany more than 80,000,000,000 marks. What the country produced at home was paid for mainly with treasury notes covered by war loans which lost whatever value they had in the ensuing inflation period. What was bought abroad usually had to be paid for in cash. A few figures will show what enormous sums went out of the Reich to pay for its imports during the war years. There was an unfavorable trade balance for 1915 of 4,000,000,000 marks; for 1916 of 4,600,000,000 marks; for 1917 of 3,400,000,000 marks—altogether, for the duration of the war, about 16,000,000,000 marks. How was this deficit covered?

  2. Two decades of prosperity, interrupted briefly by a few short crises, had made Germany one of the richest countries of Europe. At the end of 1918 the Reichsbank still had a gold reserve of 2,250,000,000 marks. In addition it had foreign securities variously estimated at or near 30,000,000,000 marks. A part of this was confiscated by the Allies, but there remained enough for one of the most audacious maneuvers of modern times. The war had not seriously affected the solidity of Germany's foreign credit. Its domestic securities were sold all over the world. German paper money found a ready market, thanks to the fiction that it was due for a rapid rise. Hundreds of thousands of patriotic German-Americans bought heavily of Fatherland currency and lived to see the day when they could paper their walls with those worthless lithographs.

  3. A large part of Germany's post-war imports was paid for by the sellers themselves, for the money they received was valueless before it reached their hands. During the war the Reich carried on a vigorous "buy in Germany and keep our money at home" campaign. Where this was really put into practice, it meant overwork and hunger for the population at home. It was not applied to raw material for ammunition and war supplies. To get these the Reich mortgaged its shirt without the slightest compunction.

  4. Today the situation is incomparably worse. Before 1914 the foreign market had only a hazy idea of the Reich's financial status. Today everybody knows that the Reich government is deliberately spreading a cloak of darkness over its financial condition because it does not dare reveal the full extent of its bankruptcy. Germany, which was once a creditor, is now a debtor nation. Its gold reserve, including that which is still in the hands of private individuals, does not exceed 300,000,000 marks. Dr. Hans Priester, in an investigation of Germany's foreign investments, estimates that just before Hitler came to power Germany owned foreign securities to the amount of 1,500,000,000. These securities have since depreciated in value; what remains has been liquidated by the Third Reich in exchange for Reich bonds; the securities themselves the government used to finance the buying of raw material abroad.

  5. At present, Priester estimates, Germany's reserve of foreign exchange and securities is somewhere between 300,000,000 and 400,000,000 marks. It may even be slightly higher. German credit abroad is, in other words, practically non-existent. In case of war Germany would have to pay cash for everything it needs. Washington has made this quite clear where the American market is concerned. Yet, in spite of the Four Year Plan and autarchy, Germany's needs would greatly exceed the requirements of the World War.

  6. From every point of view Germany is worse off than any other power, with the possible exception of her Italian ally. Military cooperation from Italy may or may not be valuable. In any war which the two fascist nations would fight against the rest of the world Germany would have to bear the brunt of the financial burden.

  7. It is noteworthy that of all the countries which went through the World War, Germany and perhaps the Soviet Union have been the only ones to learn from their experiences. Perhaps it is true that only unsuccessful generals learn from the experiences of the past. Certainly the energy and perseverance with which the German government and its military leaders have gone about correcting past errors would be admirable if it were in a better cause. The first and most important of these lessons is the necessity of economic as well as military preparedness. All Germany lives and breathes "war economy." Social production, industrial planning and organization, the systematic subordination of the individual, of science in all its phases, of education, and of propaganda to the social and economic needs of the community, its foreign policy, and its preparedness program—that is war economy as the Third Reich understands it. There is—to mention only one of many—a Reich Bureau for Industrial Redistribution (Reichsstelle für Raumordnung) to which has been intrusted the task of adjusting and transferring industrial units into those localities in which they will best serve the nation's defense apparatus. The idea originated in Great Britain, but nothing was ever done about it there. Germany, on the other hand, is building up a new economy, step by step, against the background of its war needs. In the legend—filled forests of mountainous central Germany (Harz, Holstein, Thüringen, etc.) the wanderer comes upon closely guarded areas of which not even the local population knows the exact purpose. The men who work in these areas are brought from other parts of the Reich and live in strict seclusion. A dense secrecy surrounds all these operations, but everybody realizes that another fortress, another flying field, another stronghold, or another ammunition or airplane factory is being built for the use of the German army in case of war.

  8. What this process of reconstruction has cost the German government we cannot even estimate. Fantastic sums have been spent on the strategic redistribution of industries, on subsidies for Ersatz experiments and the creation of Ersatz industries, on the building of war-material and ammunition factories, on barracks, airdromes, automobile highways, etc. The figures are carefully concealed and one can only guess at their size from the evidence that meets the eye. In his book "Das deutsche Wirtschaftswunder" (Germany's Miracle Economy) Dr. Priester estimates that the government of the Third Reich spent some 30,000,000,000 marks over and above its normal budget between the beginning of 1933 and the end of 1936. These 30,000,000,000 marks went almost exclusively for armaments and related purposes. Other German and foreign experts place Germany's preparedness budget at double that figure. Nothing before or after the World War can compare with this criminal drain on the nation's financial resources. It is comparable only to the terrific sacrifice of the World War years.


  9. I have already spoken of the importance of material in a new world war, but the decisive factor will still be the human quantity. In the last war the Central Powers fought against overwhelming odds, yet they held out against their adversaries for four long years and fought numerous successful battles. The source of this extraordinary strength was the high state of Germany's cultural development. German tradition always had it that it was the "German schoolmaster" who won the victory over Austria in 1866. In 1914-1916 it was Germany's industrial worker who went from victory to victory. It was the German industrial worker who in 1918 swept away the old Junker rule. It was the realization that Germany's strength lay in her people that impelled the Allies in Versailles to limit the German army. The General Staff made a virtue of necessity and set about organizing a small but highly efficient army of professional soldiers. Recent experiences have proved the fallacy, however, of the conception that a small, highly trained, and highly mechanized army can advance into the enemy's territory with a short offensive and an immediate victory practically guaranteed.

  10. The Nazi government was quick to draw its conclusions and translate them into practice. It denounced the arms limitation clause of the Versailles Treaty almost at once and set about preparing the nation for war. Every man in Germany knows where he will stand when war breaks out, on what day he must report for service and where, though this is merely an intensification of the old imperial army system. Every prospective soldier, old and young, is closely scrutinized for his peculiar abilities and placed where he can render most efficient service—at the front, in industry, behind the lines.

  11. Before the greater need of the state more than one National Socialist theory has had to be discarded. Women are being brought back systematically into industrial life, after having been ousted from the factories and mills and offices of the Reich by the hundreds of thousands to make room for unemployed males. During the World War female labor in the basic war industries—mining, metal, machine building, and chemistry—rose from 195,000 in 1913 to 1,043,000 in 1918. The Nazi government is training women for the most skilled occupations in anticipation of the time when they will be needed to replace every man who can shoulder a gun.

  12. An important problem, and one that must be prepared for by systematic organization, is the question of the nation's morale at home and at the front. The soldier will not starve and suffer for months, perhaps for years, without rebelling unless he is given an ideal he can understand. What will it be? Will he fight to defend the slave state Hitler has given him? Will he fight for conquest and expansion? For colonies? For Anschiuss? Even Hitler doubts it. Instead of relying on the enthusiasm of the German people for these concrete aims, he infiltrates young and old, man, woman, and child, with that transcendental spirit of militant nationalism without which war becomes a long, dark nightmare of unmitigated horror, anguish, and deprivation. The child in school learns to carry a gun. The Hitler Youth is trained in soldiery and marksmanship. Newspapers, motion pictures, the radio—every medium for influencing public opinion is used to prepare the spirit of the German people for the coming struggle. Racial and religious mysticism is producing a nation of megalomaniacs. The spirits of Thor and Wotan walk again, lifting the young German above the drabness of a life of self-abnegation with intoxicating delusions of grandeur. Mass murder has become a religion, mass propaganda the end and aim of all cultural endeavor. The creation of the new German soul has only just begun.

  13. What has this propaganda accomplished? At home it has won the unconditional support of a large part of the younger generation. Abroad it has injected a new element into international relations: the element of fear—fear of the coming greatness, of the conquests, of the ruthless adventurism of the Hitler regime. Fear, too, in the hearts of Germany's rulers, of the spirit they have created—a Frankenstein monster carrying arms which may at any moment turn and shake off their terrorist regime.

  14. When Dr. Friedensburg, after investigating the question of oil and its relation to war, came to the conclusion that Germany could not possibly accumulate or procure enough oil to carry her through a major war, he proposed as the next best alternative an army on horseback in place of a motorized force. General von Seeckt had a better idea. He knew that a war on two fronts would inevitably ruin Germany's chances. Having no faith in the doctrine of self-sufficiency, he favored an alliance with Russia against Germany's Erbfeind on the west. With Russia as an ally, Germany would have access to unlimited food and raw-material supplies. In Russia, bread, oil, and iron—the three ifs on which Germany's success in any war so largely depends—could be produced in limitless quantities. In his eyes any war that Germany would fight would be a war of revenge. But the new Germany is not interested in revenge. Latter-day capitalism in the Reich is interested in expansion, in colonies, in markets, not in national honor and moral rehabilitation. The things German capitalism needs lie in the east, and war on the east means war against the Soviet Union.

  15. With this new formulation of Germany's war aims, the difficulties she would encounter in any case become colossal. In this crisis German diplomacy appears upon the scene of action. It stretches its feelers toward the Balkan states with attractive concessions in exchange for a foothold in the European southeast, where meat and bread and the precious petroleum abound. It carries its propaganda into the Scandinavian countries in the hope of getting milk and butter and the other dairy products. The Third Reich needs to feed its population with food from Denmark; it needs iron ore from Sweden.

  16. But diplomacy's usefulness stops on the day war is declared. When that day comes diplomatic conquests and trade relations must be backed up by military occupation. Germany would have to take possession of the whole of Scandinavia in order to beat England. Control of the Baltic Sea alone would avail her nothing, since a large part of Sweden's ore shipments goes over Norway, which, of all Scandinavian countries, would be the one most likely to stand by the British. Germany would have to push her offensive southward to the Black Sea, whether backed by Hungary alone or with the aid of a Poland and a Little Entente willing to break with France and her associates. Moscow, knowing only too well that in southeastern Europe lies the answer to Germany's crying need for oil, will do anything to keep the Little Entente intact by holding Rumania's friendship.

  17. In short, as things are at present, any war Germany could precipitate would immediately involve all Europe, with Germany fighting for life on all fronts. Nazi leaders know this and will be cautious in their international relations in consequence. Nevertheless the fact that Germany has thus far failed to win positive allies outside of Hungary and Italy, with Poland as a possible but not a certain backer, is by no means a guaranty against war. Where there is so much powder, explosions will happen, in spite of fear and precaution. Abroad Germany's policy of bluff and terror is piling up resentments. At home the growing burden of living will ultimately lead to complications from which war may become the only escape.

    [The first part of this article appeared last week.]