The Soul of Germany.

Probably the most remarkable event of the month is in Germany. Fascism (in brown shirts, as compared with the Italian black shirts) has made a big bound upward. It is a German Fascism, and, probably unlike any Fascism that any other country would produce. It is, in fact, known less by the sign of brown shirts than by the sign of “Steel Helmets.” In this, one glimpses the eternal German under a new banner and title. Its “catchword,” says the cablegrams, is “Down with everything for which the Republic stands.” Its leader, Adolf Hitler, put that slogan into action in 1923, when, as reactionary leader in Bavaria, he launched the Hitler “futsch” and finished in military detention. But he was soon free again and organising a political “putsch.” In the last Reichstag there were twelve Hitlerites. The recent election has lifted the number to 107. Not many, you may say, in a Reichstag of more than 550. Yet a menacing indication of anti-Republican feeling in Germany. “Thank God,” says a Berlin paper, “no pacifist fraud will ever rob the German of his pride in armed forces.” Does that mean that “All Quiet on the Western Front” is for foreign consumption?

In the modern world, economics and politics are inextricably interwoven. It is not the function of this column to go into politics any more than necessity drives. But the Fascist development in Germany—with its open threats to deal with the Republic first, with the world afterwards—is too significant a fact to be regarded with a closed eye, whether that eye be political or economic. For Germany is the ultimate debtor, even as the United States is the ultimate creditor. Britain is both debtor and creditor—debtor to the United States, and creditor of Germany and of certain Allies. It took years to settle the debts-liquidation process on lines that appeared to fix the liability of the ultimate debtor, and the reward of the ultimate creditor. In fact, it is only within the last couple of years that the last settlement, the Young Plan, was signed by Germany and her creditors. And now, from the first succeeding appeal to the German electors, springs this remarkable accession of strength to a party that would throw both Republic and Young Plan on the scrap heap.

What has already happened economically under the Young Plan is, in part, symptomatic of what is happening nearly everywhere throughout the world. It is a commonplace that prices of goods have fallen hugely and are falling. That means that if you have to pay a gold debt in goods, you must hand over more goods.

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As recently as March, 1929, the Allied Governments were demanding from Germany an average annuity (on Young Plan lines) of about 2200 million marks; the German experts countered with an offer of 1650 million marks; they formally compromised at 1989 million. But the “Statist” points out, since that date prices have fallen by nearly 19 per cent., so the compromise amount is a greater real burden than the Allies’ original demand. Viewed from that angle, the German Reichstag voting appears in a new light. Measured by the same process of falling prices, Britain's real debt to the United States, is over 200 millions sterling greater than when it was funded in 1923 at 945 millions (although Britain has since repaid 35 millions of the principal). But what Britain loses on money owed by her, she gains on money, owed to her. It is not so with the ultimate debtor, Germany.