Publication: The Sunday Times

Full Citation

  • Title Bankrupt Germany
  • Author Brandon, O. H., "Sunday Times" Speical Correspondent
  • Publication Title The Sunday Times
  • Collection The Sunday Times Digital Archive, 1822-2006
  • Date Sunday,  July 29, 1945
  • Issue Number 6381
  • Page Number 5
  • Place of Publication London, England
  • Language English
  • Document Type Article
  • Publication Section Business News
  • Source Library Times Newspapers Limited
  • Copyright Statement © Times Newspapers Limited.
BANKRUPT GERMANY REPARATIONS A MAJOR ISSUE BERLIN, Saturday. Reparations have become one . . oi the major issues at Potsdam. Huge sums have been men - tioned , though not as fantastic as after the.last war. Yet only a cursory investigation of Ger - many 's economic condition to-day , more bankrupt than any in modern history, shows the complexity of the subject . It is emphasised that no mone - tary reparations are in question, but only those in the form of labour and in kind. Russia has alreadv a reservoir of labour . estimated at 4,000,000 German prisoners. To increase this number would be diffi - cult without eliminating the possi - bility of making Germany produce reparations in kind. ; At ,the moment one of the greatest tasks of the Allied occupa - tional authorities is to facilitate bringing in the harvest. In some regions a " go-slow" tendency is perceptible among the peasants, but the delav in -harvesting is mainly due to shortage of man - power under the aee of 40. FOOD FOR 65 P.C. Experts, though reluctant to make definite estimates, believe there is food in Germany for only 65 per cent, of the population. Crops are generally better than ex - pected , .but lack of agricultural machinery and transport is likely to upset calculations. The Allies will not be able to extract food from Germany. Industry, also, lacks machinery and raw materials. It remains to be decided to what extent any Allied supply of raw materials would be considered " foreign in - vestments ," which the Big Three are agreed should be avoided. At least there will be noDawes or Young Flan this time. Financially Germany is com - pletely bankrupt and a serious inflation exists;the full impact of which has not yet made itself felt. At the last census in April 60 mil - liard Reichsmarks were in c ircula - tion against 11.3 milliard in 1939. This money, apart from 10 mil - liard estimated to have been destroyed and three milliard con - fiscated by the Bed Army, remains hoarded among the population. Before the collapse the bank and savings and transfer accounts for all Germany held by the Reichs - bank reached 210 milliard Reichs - marks . All bank accounts are now frozen. As all the banks were forced to invest 88 per cent, of their money in Reich bonds, which are now worthless, nothing will ever be paid out if the Allies declare the German State bankrupt. FORMER REICHSBANK The former Reichsbank has now provisionally become the Berlin City Bank, with an initial capital of 1,000,000 marks, such a negli- - gible sum that it can permit only small and few credits, mainly for the restoration of such factories as can easily be restored. The lack of money does not permit the open - ing of private banks, a matter in which the Russians do not seem interested except for certain specialised branches in banking business such as also exist in Russia. The old Reichsbank building is destroyed. The new pare, com - pleted in 1939. is poetically undamaged , but 300 clerics suffice to cope with all the business. Even thev do not seem to know what to do with themselves most of the day. From O. II. BRANDON, ( *' Sunday Timca " Special Correspondent