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Salient. An Organ of Student Opinion at Victoria College, Wellington, N.Z. Vol. 1, No. 10 June 8, 1938

German-Austrian Union Justified?

German-Austrian Union Justified?

Democratic countries stand aghast at Germany s so-called grab of Austria. To them it is the anathema of conquest, the relentless triumph of a stronger over a weaker nation, and to the Socialist the subjugation of a people's will to that of Fascist might. The very thought that such an action could have any beneficial effects or be desired by a majority of Austrians is foreign and inconsistent. Politically, to the curious outside world Germany stands damned. But what might Austrians think and what might Germans think? They are vitally concerned, but apparently their views are irrelevant. Looking at the question from the point of view of a casual observer, economically, the union is justified. To illustrate this let us look at the question, not by putting the telescope to the blind political eye but rather, by getting down to cold, hard material facts.

To understand something of the nature and effects of the union one must know first of all a little of the economic structure of Austria. The population of Austria is about 6,700,000; as in most other countries, it is unevenly distributed. After 1926 the surplus of births over deaths diminished rapidly until, about 1936, it disappeared altogether. "The economic distress in Austria in the past years is seen most clearly in the continual birth decline, which resulted finally in the fact that Austria was the European country where there were more deaths than births. This is partly the explanation of the fact that of a total population of 6.7 millions, 3.17 millions are gainfully occupied—an unusually large proportion."

Only one quarter of the land is fit for crop raising, and thus Austria is heavily dependent on imports for the supply of foodstuffs such as maize and wheat. Cattle-raising is important, and specialisation in recent years in milk and dairy products has resulted in her having a large export surplus in butter and cheese.

About 37 per cent. of the total area of Austria is composed of forest lands, and the lumber industry is one of the largest export industries. Sawmills are found in all parts of the country, but in addition to timber cutting and sawing, the production of paper and cardboard is widespread, while in Steirmark and Karlen cellulose and wood pulp are produced. This group of industries, which is largely controlled by British interests, must prove valuable assets to Germany, which country' is deficient in timber.

Considerable deposits of "surface" iron are located at Steirmark and Karlen, the former being the chief centre of the metal industries. The dismemberment of the Austrian Empire after the war destroyed the market for the engineering industry, and the Austrian market now absorbs only 30 per cent. of the (pre-war) capacity, as compared with a normal pre-war utilisation of 80 per cent. capacity:

Economically, Austria has recovered far less from the depression than have most of the other industrial countries, and if the standard of living of the masses is considered it is very doubtful whether any improvement has occurred since 1932 and 1933. This failure to recover has been due in no small measure to the Peace Treaties of 1918 and 1919, but it has also been due to the old Austrian Government's policy of not practising self-help but rather to seeking the aid and confidence of foreign countries and to hoping for favourable reactions of world upswing. A policy of "amortisation of public foreign debt, gradual abandonment of foreign exchange, control and balancing of the Government budget means deflation and the rejection of a public works policy." This is the chief reason why the Austrian economic situation since 1933 has been for the most part merely "a reflex of the improved situation throughout the world."

Before the war the economy of Austria was dove-tailed into that of other parts of Austria-Hungary. Austrian industries found markets, and Austrian people found foodstuffs elsewhere within the Empire. Dismemberment meant that industry was uprooted, and the post-war economic nationalism of the newly formed states meant that many roots lay rotting on the surface. Such a complete change forced the Austrian people, deprived of their "domestic" markets, to seek foodstuffs outside the new barriers. Regional trade became international. Austria was thus faced with two alternatives—to search for new foreign markets to pay for imported foodstuffs, etc.. or to reconstruct industry upon a basis of production to supply domestic needs. She should have chosen the latter, but the choice of the former meant that she became "merely a straphanger in the international train." Her precarious hold on foreign trade necessitated a deflationary policy which prevented a natural expansion of the home market.

From the foregoing it may be concluded that the entry of Austria into the German economic system should prove decidedly advantageous to herself, not only from participation in the big German market but also in the recovery in the German economic position. The Austro-German market, with its population of 74 millions, will be one of the largest in the world, and the free exchange of goods throughout this large territory will certainly be a boon to those Austrian manufacturers who hitherto had to rely on a small home market as a sole support for their export business. The removal of trade barriers and changes in economic organisation should exercise a favourable influence on the trade and industry of the two countries. An influx of German tourists will be more than sufficient to compensate the declining Austrian tourist trade. These factors together with the increased activity in the metallurgical industries that will probably occur owing to general rearmament and a comprehensive public works scheme to effectively amalgamate "Greater Germany" should result in increased prosperity and a higher standard of living amongst the Austrian people. Whether or not the creation of a tremendous war machine is desirable from the point of view of raising the standard of living depends almost entirely on political outlook, and no doubt a majority of Austrians will welcome a chance to recover their former wage levels and recuperate with the aid of Germany some of the pre-war glories that were Austria's.