Will Ukraine Wind Up Making Territorial Concessions to Russia?
Foreign Affairs Asks the Experts
GERMANY is an industrial state. Paradoxically, however, the agrarian problem today not only occupies the center of the economic stage, but is also the focus in which party politics converge. In France, where half the people live on the land, serious or acute agrarian problems are seldom heard of, and the discussion of agrarian questions is usually relegated to doctoral dissertations. In Germany, on the other hand, the clash of opinions among all classes of the population -- whether between those counseling business planning and those defending laissez faire, or between the protagonists of economic self-sufficiency and the advocates of international commerce -- invariably and immediately assumes the form of discussions about food production and the agrarian structure.
Even during the prosperous years from 1926 to 1929 general attention was aroused by the fact that in certain parts of eastern Germany agriculture had ceased to be profitable; and comprehensive measures were adopted to assist the agricultural concerns in question and transfer to public account the losses which they had already suffered. After the economic depression had begun to make itself felt this system of agrarian aid was considerably expanded. A few months after the bank crash of July 13, 1931, the German Government issued an emergency decree for the protection of agricultural enterprises in the eastern provinces, a measure which was fraught with tremendous consequences for the country's entire economic structure and credit arrangements. It established a moratorium and system of debt cancellation for agricultural concerns encumbered or overwhelmed with debts, and provided a government guarantee so that they might continue to operate. At the present time it is not too much to say that all the important movements and changes at work in the general orientation of German political economy revolve around the agrarian problem, specifically the work of resettlement and rural development.
A critical observer, especially one from abroad, cannot help asking how it is that a nation so largely devoted to industrial pursuits should, in its efforts to overcome the economic crisis, put the agrarian question at the very center of all its deliberations and decisions. If we want to understand this question and find its answer we must above all bear in mind that about 37 percent of the German people still engage in farming or derive their subsistence from it, and further that the industries are largely concentrated in certain parts of the country -- along the Rhine and in the Ruhr, in Württemberg, in Saxony, in and about Berlin, and in the parts of Upper Silesia which still belong to the Reich. Industry plays a much less important part in the east than in the west, where even outside the purely industrial districts one finds industries scattered almost everywhere. Moreover, the 65 millions who inhabit Germany are confined within comparatively narrow limits, especially from the American point of view. In addition, in most parts of the country the soil is of a quality which agricultural experts in America are accustomed to describe as "submarginal." Nevertheless, and notwithstanding low protective duties, up to the war the German agriculturists cultivated this land -- thanks to a highly developed agrarian technique -- with conspicuous success in open competition with the rest of the world. In those days the agriculturists were large consumers and constituted a prosperous section of the national economic structure, as continuously rising land and leasehold values demonstrated. The highest land prices were to be found along the western frontier and in southern Germany; the lowest along the eastern frontier. In Germany, altogether unlike America in this respect, agriculture is based on the principle of high profits per man hour. Labor is cheap in Germany, whereas land is dear. That is the reason why German agriculture relies on a highly developed technique of plant cultivation, on natural and artificial fertilizers, on intensive deep tillage, and on the combination of plant cultivation with stock farming, rather than on the employment of labor-saving machines.
Conspicuous differences exist in the way large and small farms are distributed over the various regions of Germany. In all, there are about 3 million small farms of more than 5 and less than 250 acres of tillable soil, and about 2 million farms of less than 5 acres; large agricultural concerns comprising more than 250 acres, and averaging about 1250-1500 acres, number about 17,000. Of the latter about 12,000 are to be found mainly in eastern Germany, with the rest principally in the Prussian province of Saxony. A number of large agricultural estates, however, are also to be found in the west and south, scattered among the small farms predominating there. The principal difference between the large estates and the small farms is that on the former the landowner himself does not work, the actual work being done under his supervision by landless laborers, whereas on the small farms the labor is provided by the members of the farmer's own family. On the large estates the number of workers is small in comparison to the area these occupy, and the same also is true of the numbers of farm stock they use. Usually, then, they go in for large-scale cultivation, that is for cereal crops. In the field of intensive cultivation there is only one root-crop in which they excel, namely sugar-beets. The small farmers keep a much larger number of animals per acre and therefore they also have more stable manure. The goods marketed by them are mainly finished products such as milk, eggs, meat, vegetables and fruits.
Western Germany as far as the River Elbe, that is to a line extending from Hamburg in the north to Dresden in the south, has been under careful tillage for more than two thousand years. That is why the soil is so much more productive there, although it must be added that the climate is also more reliable and favorable. Eastern Germany was not opened up for more or less intensive agriculture until about four hundred years ago, when it first was properly colonized. It is due to this circumstance that in these eastern provinces, where the large estates predominate, the rural civilization is on a distinctly lower level than in western Germany. The feudal system of landownership continued here until quite recent times. Up to the beginning of the last century the large landowners had only a comparatively small part of their land under their own management, the remaining and larger part being cultivated by peasants who were serfs; in those days, therefore, there were no landless agricultural laborers. After the Wars of Liberation, in 1813, an agrarian reform was attempted, but with the result that the landowners expelled hundreds of thousands of peasants or serfs and took under their own management the land that the latter had previously cultivated. In this way the powerful estate owners frustrated the reform and established their own complete supremacy. For not only were they thenceforward the leaders and supporters of agriculture in all its branches, as far as eastern Germany was concerned, but they were also the upper class both in political and in social life. From their ranks came a very considerable percentage of the German diplomats and officers, the higher officials, the judges, the chiefs of administrative districts, and the presidents of governmental bodies. They and their families constituted "society," at the head of which stood the royal family.
In this way it came about that the whole social structure of Prussia, and indeed of entire pre-war Germany, was fashioned so as to comport with the supremacy of this caste of eastern estate owners. They were regarded as the pillars of the state. Moreover, their economic position was so strong and so effectively maintained by a suitable taxation and customs policy that they were able to give their sons the best possible education and professional training. Need we wonder then that, tradition and prosperity quite aside, they produced a great number of intelligent and highly able representatives, who succeeded in consolidating more and more firmly the leadership of the large landowners in all agricultural questions? Under these circumstances the smaller farmers could not get rid of a feeling of inferiority, the more so as they found that higher education was practically monopolized by the feudalistic interests. Thus farmers' sons endowed with clever minds generally looked for a way to abandon the family calling and enter an economic sphere offering them a better chance to acquire an education and make their way in the world. This negative selection, as one might call it, which is still going on before our own eyes among the farming classes, must be held accountable for the fact that to this day the five millions of established farmers have failed to produce any leaders capable of effectively representing their interests in agrarian politics. If there have been any individuals gifted above the average who remained faithful to their agricultural calling they have invariably entered the ranks of the large landowners as freeholders or leaseholders, with the consequence that their interests became assimilated to the latter's.
The republican constitution adopted by Germany after the war abolished, at any rate in principle, a large number of the privileges of the large landowners -- more especially their monopoly of the higher government posts, and also the exemptions which they had enjoyed in regard to taxation. Another prerogative thus abolished all too tardily was the permission that had been granted to the large landowners to import cheap labor from abroad. Before the war the German Government each year allowed the entrance of some 400,000 Polish agricultural laborers, who returned home for the winter months after spending the summer in doing much harder work than the German laborers, for ridiculously low wages and with unbelievably modest demands as regards lodging. It was due to the importation of this cheap labor from abroad that there was an ever widening gap between agricultural and industrial wages, so that the standard of living among agricultural laborers fell to the lowest possible level. Modern water supplies, electric light, gas and drains were almost never to be found in the huts of agricultural laborers in eastern Germany, whereas all these things were available in even the cheapest tenements in the cities. As a result, hundreds of thousands of agricultural laborers migrated to the industrial towns.
In spite of all these circumstances the rapid growth of the German people and their increasing prosperity kept creating new outlets for agricultural products and thus enabled the five millions of small farmers, by dint of hard work and efficient management, to hold their own in competition against the large concerns. Owing to the political handicaps, however, it remained impossible for the farmers of western Germany, despite the very high birthrate prevailing among them, to settle in the eastern provinces where the population was steadily decreasing. For the large estate owners enjoyed an absolute land monopoly and never sold a single acre. Even when one of them went bankrupt, either the peculiar terms of the agrarian credit or the fact that the property was tied up by entail made it impossible to sell the estate except in its entirety, so that the new proprietor was again a large landowner.
After the war, and especially once the chaos of inflation had been overcome, it soon became evident that the five million small farmers in Germany were capable of adapting themselves to the new price conditions surprisingly quickly, and that they were far ahead of the large concerns in economic efficiency. It should be mentioned in this connection that for the purposes of intensive stock farming and diversified plant cultivation the employment of agricultural machines such as tractors and reapers does not seriously come into question even in the case of the largest concerns, because human labor is so comparatively cheap. On the other hand, it became increasingly evident during the years 1925-27 that the large agricultural concerns in eastern Germany had ceased to be profitable. Higher wages, higher taxes, higher interest rates and recently contracted debts entailed much greater expenses than in former times, while, in contrast with favorable prices for animal products, there were lower prices for grain. Receipts could not have been increased except by making every acre yield more grain; but only a very narrow margin for improvement in this respect had been left after what had already been achieved in Germany. As a result the large estates rapidly became involved in increasing debts. As early as 1928 the number of large agricultural concerns heavily mortgaged was estimated at between four and five thousand. Rents fell, and as the value of such estates is a mathematical function of the rent obtainable, land prices began to sink rapidly. The disaster spread in widening circles from the areas where it had first developed. Meanwhile, the small farmers continued for the moment to enjoy prosperity.
The collapse of the grain prices in the world market ushered in a highly critical situation for all owners of large agricultural enterprises, and the beginning of one of the most fascinating of all the internal political struggles of post-war Germany. The Weimar Constitution had formally deprived German large landowners of their old prerogatives. They had been the first to suffer financial shipwreck even before the storms of the world crisis had gotten thoroughly under way. One would have thought that the end of their supremacy had come. But events moved in the opposite direction. By dint of clever management, by taking advantage of all their old social connections, and above all by drawing on their vast political experience, the estate owners were able to organize themselves for an offensive, and their unwavering perseverance and self-confidence in their fight for life decided the battle in their favor and against the interests of the great mass of the smaller farmers.
They were clever enough, in the first place, to exploit to the full the strong position enjoyed by a large debtor. In 1930 the German Government, acting under their influence, began a steep upward revision of the protective tariff on grain, in order to save the large agricultural concerns in the eastern provinces. In addition to increasing the protective duties on grain up to $60 per ton, the German Government proceeded to manipulate the grain market. It established a monopoly for the importation of corn and practically cut off all imports of barley for use as fodder. These measures resulted in the complete isolation of Germany from the world market as far as these commodities were concerned. The favorable economic conditions during the years 1926-29 made it possible even for the Social Democrats to defend these duties, although they tended to diminish the real wages of the workers. Today the German price of wheat is 200 percent above the level of the world market. Finished agricultural products, on the other hand, were at first left entirely unprotected, and the measures which were afterwards taken in that direction were quite inadequate. But the advance of the grain prices which was thus effected at the expense of the broad masses of German consumers in order to save the large agricultural concerns, instead of achieving this purpose, only succeeded in inflicting heavy losses during the next two years on those agricultural producers who had been most successful until then in coping with their economic difficulties, namely, the small farmers and more especially those who bought grain from the large concerns for the purpose of raising pigs and producing eggs. After the bank crash of July 13, 1931, every one thought that the doom of the large estate owners was finally sealed. But they achieved another success. They evaded individual bankruptcy by obtaining a general moratorium, and this is still in force. While this moratorium undeniably transfers part of the unliquidity from the debtor to the creditor, it has served to calm minds and to allow time for readjustment.
But granting that the large landholders and aristocratic estate-owners are clever tacticians and perfect managers, they nevertheless can never succeed in bringing their enterprises back to prosperity. In all the countries of Europe they have been outstripped in the onward march of economic progress. Nor can the government possibly continue to employ the method of social aid which up to now it has been using in the hope of rescuing them. For that method is the most expensive one that could have been devised, consisting as it does in granting subventions in a round-about way to the form of economic enterprise which is the most unprofitable. It is like pouring water into a sieve. It would be far less expensive to extend a helping hand to the members of this class directly by appointing them to government posts, in which they could render very valuable services. Even if the government had bought up at reasonable prices all the large estates whose owners found themselves involved in difficulties, the 2,000,000,000 marks which would have been required for that purpose would have been well spent, because the political air would have been cleared. As things now are, the thanks of the large landowners for the monster subventions they have been enjoying generally assume the form of votes against the government and countless intrigues, both in domestic and in foreign politics. To build up a new social structure founded on millions of independent farmers is therefore an immensely important task from the standpoint of high state policy.
There is another discrepancy in the economic field which has exercised an adverse influence on German agriculture. Although industrial concerns were able to advance the prices of their products artificially, either through high protective duties or by national or international cartels, the agriculturists (especially the millions of small farmers) were altogether unable to find ways of counteracting their own increased production costs brought about by the higher prices of the industrial products which they were compelled to purchase. Cartels are impossible in agriculture. Quite naturally, therefore, the farmers in their turn made every possible effort to find substitutes for cartel or syndicate prices. They decided on a protectionist tariff. But they were unable to enlist the heavy industries on their side. For whereas the latter had assented to protective duties on grain, because they were connected socially with the large estate owners and had many common interests with them in the field of domestic politics, they refused to take up a similarly benevolent attitude towards the producers of finished agricultural products -- first, because they had no social or political interests in common with them, and second, because high protective duties on finished farm products seemed to constitute a much more threatening danger to industrial exports. The result was that in 1931, two years after the crash of world prices for grain, the producers of milk and eggs still had only very slight protection against foreign competition, whereas German grain prices continued to be maintained at an extremely high level. Today, however, if the German Government were to fill the gaps in the protective tariff on agricultural products, it would be found that not even the highest duties could effect the desired price increase because the economic crisis has reduced the purchasing power of the people and therefore the consumption of these finished products.
On this inconsistent agrarian policy is to be blamed the fact that the raising of grain, although no longer a profitable branch of economic production, is being artificially expanded still further instead of being contracted, whereas the output of animal products such as milk and eggs, for which natural conditions are much more favorable, is being kept down. In general, efforts are at present concentrated on a general stabilization of the agricultural expense account by commercial as well as by economic measures. As a matter of fact, all these measures are powerless against the irresistible course of economic developments. For the attempt to secure an artificial income for the large agricultural concerns and the industrial cartels only serves to reduce the purchasing power of the broad masses still further, and the resulting decrease in sales leads to the closing down of the concerns in question, so that the material values invested in these kinds of business are reduced to a still lower level. And when these values have been consumed, there is nothing left to do but to appoint a receiver, which is just what the formation of cartels and the setting up of protective duties had been meant to forestall. For these reasons the German Government has already come to the conclusion that it will be necessary to give up the artificial maintenance of a number of large agricultural concerns, totaling considerably more than a million acres, and to make this land available for the settlement of small farmers. But as about 60,000 agricultural concerns, large and small, are legally protected by the moratorium, there still remains an enormous area for the government to care for.
In agricultural circles the opinion is generally entertained that the proper way for the German Government to put an end to the present impossible condition of the agricultural market would be to cut off altogether the importation of foodstuffs, especially tropical fruits and vegetables, by means of import monopolies and prohibitive duties, and to increase the prices for finished products by adopting a suitable commercial policy. But if that were done, the inevitable consequence would be that German industrial exports, from which several millions of workers still derive their subsistence, would be brought to a standstill. This would imply a further decrease of the purchasing power of the city population and a corresponding increase of unemployment, and therefore also a further fall in the prices of agricultural products. If we take a longer view of the matter, then, the only possible thing to do would seem to be gradually to lower the German tariff on grain, so as to reduce the costs of production in all industries to a level conformable to the needs of exportation. The attempt which is being made by nearly all the nations of the world to overcome the crisis by creating economic "self-sufficiency" is bound to end in failure. Like all other countries, Germany can keep alive only if the millions of workers who are idle at present, and who therefore have only a small fraction of their former purchasing power to spend for food, are able to find employment again. As this is written, however, in the beginning of May 1932, the number of unemployed (leaving seasonal variations out of account) has steadily increased.
Quite apart from all such measures -- which in these times of crisis are decided upon from day to day and case by case, simply to avert sudden revolutionary changes -- there remains one question of decisive significance for the entire economic and social life of the German people. Is agricultural production to be developed in Germany on the same basis as industrial production, that is, exclusively in the interests of producers and distributors, without taking into consideration how the social life of the German people is affected thereby? Among those advocating this course the theory seems to prevail that a ruthless mechanization of the methods of agricultural production would tend to increase the output of individual agricultural enterprises to such a degree that the number of workers engaged in agricultural pursuits could be steadily decreased. But that would mean that millions of German farmers would have to turn their backs on the land, and that German agriculture would have to be reorganized on big-business principles. And this at once leads to the further question, what is to become of all those people thus compelled to give up farming? During the past century this problem as to how former agricultural workers are to be provided for was solved by the fact that millions were able to emigrate, while other millions obtained employment in industry, which was prospering thanks to large exports. But emigration has been blocked for an indefinite future, and as to exports, it is doubtful whether they could be increased so as to satisfy the needs even of the present industrial population. Considering the fact therefore that the country is prolific in producing capable human beings, but poor in natural resources, it seems quite likely that a decision to let the further development of German agriculture proceed along these lines would disrupt Germany within the space of a few years.
How to improve the standard of living among the broad masses of the population is nowhere discussed more thoroughly than in the trade unions and among the Social Democrats. It is especially interesting that for several decades this powerful labor party has been split into two camps over the agrarian problem. One wing uncompromisingly advocates small agricultural holdings and demands that the land should be settled by farmers; the other holds -- largely for technological reasons, but also because of some political resentment against the capitalistic sympathies of the farmers -- that it is necessary to organize the nation's agricultural enterprises on big-business principles.
As regards agricultural considerations, the solution of the problem will largely depend on the different consequences of large-scale and small-scale organization. These are manifest in the agricultural no less than in the industrial sphere. Monster concerns seem to be very unfit to weather the storms of a serious economic crisis. They lack elasticity, because they depend for making both ends meet on the full utilization of their extensive capacities, and because it is exceedingly difficult for them to adapt themselves to pronounced variations in the level of prices. That is why in Germany most monster factories and other large-scale concerns fall victims to the crisis, whereas millions of small industrial concerns and home-workers, especially artisans of all kinds, survive comparatively well. It should be mentioned in this connection that, so far as farmers are concerned, the part of their production which they themselves consume is entirely independent of any changes in the price level and even of variations in the purchasing power of gold. And since farmers generally market only a comparatively small part of their produce, it follows that this is the only part of it which is affected by an economic crisis. In large concerns the opposite is the case. The fact that the work is done by members of the farmer's own family also makes for greater economic elasticity, because their wages are automatically reduced during times of economic depression -- in other words, because the farmer automatically reduces his standard of living. In large agricultural concerns, on the other hand, the wages do not begin to fall until the crisis has continued for a considerable time, especially in countries where the wages are regulated by the government, as in Germany. By that time, however, the financial strength of the enterprise has already been considerably weakened. Therefore, if they are in the majority, they will always endeavor to obtain protection and assistance from the government during times of economic depression. We have seen this happen before our eyes during the past few years, when the heavy industries made common cause in this respect with the large agricultural estates. Both groups set their faces against socialization. To be more exact, they set their faces against the socialization of their profits during times of prosperity. But this has not prevented either of them from demanding and obtaining from the government the socialization of their losses, with the result that the risk involved in the operation of large concerns was placed on the shoulders of the masses, that is to say, of the workers and employees in general.
But the question of large-scale or small-scale organization is of even more far-reaching significance in the realm of economic psychology and economic ethics. It is not too much to say that the social stratum of 5,000,000 independent farmers represents the most powerful bulwark against communism in Germany. For at heart these farmers and their families are uncompromising capitalists. They are convinced that the land is the ultimate means of national production, and that the security of the state and the economic order can have no better foundation than private ownership of land. With the single exception of Russia, all the European nations made up their minds after the war that the best way for them to organize their agriculture was to parcel the land out in small farms. They were alive to the fact that large agricultural estates with masters and servants had become an anachronism, and they saw clearly that there can be no greater safeguard for stability than that afforded by families which are firmly rooted in the national soil. The advancing wave of bolshevism was balked by the agrarian reforms carried out in Estonia, Latvia, Lithuania and Poland.
Soviet Russia's greatest mistake was the destruction of the organization of the land in the form of small holdings. This collectivization was not dictated by economic reasoning; it was a political act of self-defense on the part of the ruling caste of bolsheviks. For under the NEP régime the Russian peasants had already made such headway that agricultural production was rapidly increasing, and this tended so to stiffen the backbone of the non-bolshevik masses that it was regarded as a danger. The harmful results of this revolutionary transformation of the agrarian structure will be felt in the distant future. Even today the expense accounts of the newly-created agrarian concerns are not correct, because internal currencies are not immune to the laws which obtain under the capitalistic system regarding amortization of costs, interest, etc.; and these price movements are bound to create enormous difficulties where such large units are concerned as the Russian kolchoses.
In England it is generally recognized today that the government made an irreparable political mistake in remaining inactive when about 1830 the agrarian structure based on small farming fell to pieces, especially in Ireland, so that hundreds of thousands of small landowners and tenant farmers were forced to emigrate. Today the British Government is trying to build up again what was then destroyed. But while it is easy enough in a single year to destroy an economic structure which took centuries to develop, decades are not sufficient to restore it. Germany ought to take this lesson to heart. The agrarian structure must not only be protected, but it must be further developed by settling more farmers on the land. Germany may congratulate herself that she has so many citizens who feel attached to the soil and are willing to try to make a living out of it. Once they have become urbanized, they will never make good farmers again; but the opposite is easy enough. It should be pointed out in this connection that the great majority of German farmers love their bits of land in a way unknown among American farmers. They would never think of exchanging one farm for another for purely commercial reasons, or of migrating to the city. They would perish on the soil or emigrate rather than give up farming. Tradition and religious sentiments are powerful motives in that direction.
The German Government thus finds itself confronted by three great tasks:
1. Unless Germany is to bleed to death from the economic losses involved in trying to maintain the doomed feudalistic structure of her sparsely-populated eastern provinces, these latter must be settled anew with from 300,000 to 400,000 farmers and their families. A beginning has just been made in that direction. The German Government has just issued an edict by which about one and a quarter million acres, forming part of large estates which cannot be kept going any longer, are rendered available for settlement. As there is really no other way to restore agricultural prosperity in the eastern provinces and to prevent land prices from falling to zero, it is absolutely imperative to find the sums needed to eliminate the unprofitable estates, no matter how scarce capital may be at present. The moratorium granted to the agriculturists in the eastern provinces will have to be liquidated at a rate which does not entail fresh difficulties and dangers for banking institutions. Of soil and human beings there is no lack in Germany. As soon as the newly-settled farmers in these eastern provinces have begun to work, industry and commerce will also come to life again.
2. Everything possible must be done to strengthen the agrarian structure based on small farming which now exists in the western parts of Germany. One of the most urgent requirements in that direction is the abandonment of the present protective grain tariff and the adoption of a policy furthering the production of the small farmer's finished products such as milk, eggs and meat.
3. Unless Germany's whole economy is to remain below par indefinitely, it will be necessary to do away gradually with the protective duties which prevent the lowering of production costs and which hamper the German farmers in competition even within Germany's own frontiers. Only so will they also become able again to compete with the agricultural producers of other countries. Unless this is done, Germany will find that even after the world crisis has been overcome she will not be able to keep pace with other countries, but will continue to suffer.
The state of Württemberg furnishes a striking example of the successful way in which an economic crisis can be sustained by a community whose economic life is based on an agrarian system of small holdings worked by farmer-owners, and where well-organized industries balance the farms in suitable proportions. Württemberg is a real oasis in the German desert of depression. It is the one German state which is able to balance its budget, which has no public debts which it cannot meet, and where there is less unemployment than anywhere else in Germany. But all this is by no means the most astonishing aspect of its unique situation. Württemberg has no coal, no iron, nor any other metals; its most important districts are not even connected by any direct waterways. Yet its industries produce manufactures of the very highest standard -- fine motors, automobiles and zeppelins, the famous Bosch magnetos, medical instruments, pianos, highly artistic furniture, linotype machines, arms, clocks and watches, toys, jewelry, and high-class leather and textile goods. In short, the best products of their kind are manufactured in Württemberg, a country without raw materials. These flourishing industries are accounted for in part by the high-class labor which is supplied by the families of the farmers. But one of the main reasons why Württemberg has been able to weather the crisis so successfully in all branches of its economic production is the purchasing power of its up-to-date farmers, who are able to consume all sorts of industrial products and other consumers' goods. This insures a brisk market, so that money changes hands there as readily as milk, eggs, vegetables and fruits.
In Germany as in other European countries the best way to protect the established economic system, based on the citizens as private capitalists, is for there to be a wide distribution of small farmers and their families. Not until the last farmer has been driven from his land will the road lie open to bolshevism. Indeed, as the example of Russia shows, the battle has not really been won even then. For even after the Soviet Government had forcibly collectivized its peasants it was not able to prevent them from remaining capitalists in their thoughts, with the result that already a new agrarian reform is imminent.
In general the opinions here set down concerning what is possible and what is necessary in regard to the future development of German agriculture are shared by the great majority of German statesmen -- the large estate owners excepted. But it will remain impossible to put any such ideas into practice until we can prevent unemployment from involving still further millions and unless we can put a stop to the further deterioration of the economic situation. As long as the process of deflation continues, with rising taxation, scarcity of capital and credit restriction, and as long as buyers remain reluctant and capitalists mistrustful, agriculture will not flourish. We shall not be able to apply restoratives without assistance from abroad and without having arrived at international agreements. German psychology has not yet recovered from the inflation, so that it is impossible to lower the value of the German currency. International assistance is indispensable. But if that is granted, Germany can be relied upon to solve her agrarian problems in a way that will not retard the restoration of prosperity nor thwart the exchange of goods with other nations.