Courtesy Reuters

The "Drang Nach Osten" Continues

SINCE Munich the German trade drive in Southeastern Europe has entered upon an entirely new phase. This change became especially marked after Schacht's dismissal from the Reichsbank last January. It was Schacht who had developed the plan by which Germany imported enormous amounts of raw materials and foodstuffs from Danubian and Balkan countries, and forced them to take in payment, usually much deferred, whatever goods she chose to send them. Though this scheme led to a considerable increase in the volume of commerce between Germany and those countries, the latter were far from satisfied. They felt that they were not being treated fairly and they objected to the unnatural use to which Germany was putting her economic relationship with them. However, the Schacht system has served its purpose. The time has now come, the Germans believe, for even more aggressive tactics. Ever since last September they have therefore been making it increasingly plain that they are aiming at nothing less than the economic conquest of Southeastern Europe.

The new trend was inaugurated by Dr. Funk's much-publicized journey to the Balkans last October. Since then, Germany has been making three closely related demands on the countries in that area. She is insisting (1) that they enter into long-term agreements with her; (2) that they push the development of their resources -- with German help; and (3) that they allow Germany to monopolize their foreign trade. Obviously, this third demand is of the most far-reaching importance. If it were granted, Germany would have free access to the foodstuffs, the petroleum and certain other of the basic raw materials that she needs so badly. She would also obtain control over commodities she herself does not require but which she could resell in the world market in order to acquire gold or foreign exchange -- of which she is also very short. Germany is urging these countries, especially Hungary, to reduce their industrial activities in favor of agricultural production. In this way Germany will obtain a wider market

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