Problems of the large economic area

Problems of the large European economic area

PUBLICATIONS OF THE GERMAN FOREIGN SCIENTIFIC INSTITUTE

PROBLEMS OF THE EUROPEAN LARGE-SCALE ECONOMIC AREA COLLECTED CONTRIBUTIONS FROM

A. REITHINGER, B. KIESEWETTER, W. GRÄVELL, K. KRÜGER, W. SCHMIDT

1943 JUNKER UND DÜNNHAUPT VERLAG / BERLIN

All rights reserved. Copyright 1943

by Junker und Dünnhaupt Verlag/Berlin.

Printed in Germany.

Book production: E. F. Keller's Wwe., founded in 1758, Stollberg i. Erzgeb./Berlin.

Foreword

This publication is a collection of lectures given at the Deutsches Auslands wissenschaftliches Institut in October to December 1940. They deal with the problems of a large European economi c area in the sense of a future continental European economy to be built up jointly. We are aware of the diversity of the tasks contained in this objective, which are undergoing changes to a certain extent and are therefore subject to a partial solution fo r the time being. Our aim in these lectures was not to point out methods and ways to the set goal - that must be reserved for practical politics alone - but to highlight the problems as such and the concept of "Europe", which still means nothing and says n othing to many who generally call themselves "Europeans". Of course, a selection had to be made from the abundance of tasks. In addition to an introductory lecture dealing with the preconditions and scales, we have limited ourselves to the raw material sit uation, foreign trade and transport problems. The authors are aware that they have not given an exhaustive presentation of the topics dealt with in such a small space, but they have all approached their task with scientific seriousness and want to contribute with their explanations to further reflection and to the formation of a firm political judgment on the problem of "Europe ".

B. Kiesewetter

PREREQUISITES AND SCALES OF THE CONTINENTAL EUROPEAN LARGE-SCALE ECONOMY

By Dr. Anton Reithinger

It is difficult at this moment to speak about the preconditions and scales of the continental European large -scale economy for two reasons. Firstly, because the political foundations for the economic reorganization of the European continent have not yet been es tablished, or, to put it more precisely, are not yet known to us; and secondly, because this war is not merely a military conflict between two peoples or groups of peoples, but a revolutionary decision between two world views and ways of life, and therefore the economic scales and values of the future will have to be measured by different standards than the scales and values known to us in the past. I think we can assume that, no matter when and how the military decisions of this war will ultimately be take n, a return to the former forms of economic life and economic relations within the European continent is out of the question, and that the new order already under way will embrace and largely reshape all spheres of political, economic, social and spiritual life in Europe.

On the one hand, therefore, we will have to summon up the courage for a little imagination and new ideas that do not merely stick fearfully to the known processes and forms of the past; on the other hand, however, we must not lose the solid ground of the facts under our feet if we do not want to lose our way into unfruitful speculations. This solid ground of facts, of which I have just spoken, offers first of all two secure and sustainable starting points for our further considerations: 1. A geographical one, namely the continental European area with its various nations and states of their ethnic and social structure and their economic relations within and outside Europe - the continental European area clearly delimited against the other lar ge areas of the earth, excluding * Great Britain, which by its political and economic connection with the overseas Empire and by its traditional policy against the European mainland must be regarded as a non -European power whose mother island just happens to be on the periphery of our continent.

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2. The second fact is a political -military one, namely the German -Italian axis running across Europe, which has dominated the continent since the victory in the West and thus created the conditions for the breakthrough of the new ideas of order.

The similarity of the biological preconditions - rapid population growth on too narrow living space without sufficient natural raw material basis - and the consonance of the social revolutions of t he National Socialist and Fascist spirit springing from it and a glance at the map makes the tremendous geopolitical importance of the axis as an instrument of the new order of our continent immediately clear. The North -South axis, with a block of 150 mill ion people, practically divides the European mainland into two parts, a western and an eastern one, which, with 60 80 million people each, are both politically and economically separated and held together by the axis.

I have spoken before of the breakthro ugh of the new ideas of order, using the image of a pent-up tidal wave which, by its natural force, breaks the opposing dam of artificial resistance; and indeed, since our victory in the West, a veritable torrent of writings and articles on the subject of European reorganization has swept over us. All the world is talking about it, but the exact knowledge of the actual conditions and magnitudes, the inner consciousness around the ultimate goal of this reorganization and the understanding of its possible for ms and methods is still quite sparsely spread.

In this series of lectures you have heard a number of experts who have acquainted you with the most diverse individual problems of a future continental-European large-scale economy, and I will try to conclude this series of lectures by giving you the general framework for it with a presentation . of its basic preconditions and orders of magnitude, while also weaving in some remarks about the goal and possible forms of this reorganization.

The problem of European reorganization has not only become acute today, but has already been prepared for a long time by the development of the 19th century. The improved hygienic conditions, the economic intensification and the enormous increase of the Eu ropean population during the last century have led, especially in Central Europe, to the formation of huge industrial masses, above all to urban mass settlements with completely new problems of management and organization, such as the rural village or the small and medium-sized . These problems were unknown to the rural village or the small and medium-sized town where our parents' and grandparents' lives were still lived. The completely changed technical and traffic conditions of our age also

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demand a reorganization of the internal and external relations of the European peoples among themselves and especially of the forms of their political coexistence and their economic and social community work, if our part of the world is not to sink into complete insignificance in relation to the development of other large areas, above all America.

The European continent excluding Russia has grown from 150 to over 250 million people in the last century and will have reached a total population of about 350 million by the middle of our century - a development which, even in purely quantitative terms, poses enormous problems of nutrition and employment for this increase in people. However, the problem is not only a quantitative one, bu t above all a qualitative and organizational one. The structure of continental Europe, which at the beginning of the 19th century was still purely rural and peasant, has undergone a fundamental change, in which the central European center in particular has moved to new forms of metropolitan coexistence and industrial activity with their completely different hygienic, social and cultural conditions.

In the course of the last two generations, Western Europe did not feel much of these radical changes, because it had already largely found its economic equilibrium, had large colonial compensation areas and was biologically stagnant. The Central, Southern and Eastern European peoples, however, were all the more affected by this, being crowded together in a living space too narrow for their high population growth and having no additional colonial settlement or raw material areas at their disposal.

Here we encounter for the first time the problem of internal economic balance in continental Europe. No less important i s the balancing of external economic relations between continental Europe and the overseas metropolitan areas.

In the preceding lectures it has already been described that the capitalist world economy has finally led to a far -reaching separation between ra w material production and raw material consumption areas of the earth, the economic dangers of which could have been overcome only by an understanding cooperation of all peoples. Instead, the Western powers, headed by England, deliberately exploited this s ituation as a means of politics and abused it politically and militarily in the World War and the League of Nations sanctions against Italy, thus discrediting for all time the idea of a world economy based on the division of labor.

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The military successes of Greater Germany have now created the conditions for the breakthrough of a completely new development in the internal and external relations of the continental European area. I believe you will agree with me when I profess th e view that this new order cannot be achieved in the long run by force, but only by the persuasive power of new ideas.

Military power is the necessary prerequisite and the external guarantor for undisturbed peaceful further development, but the development itself must be driven forward and finally secured from within by the living force of the spiritual idea. Personally, I am convinced that this new order can be built permanently only on the basis which has proved to be the strongest history forming force in the last century, namely, folkish development instead of capital ties and financial dependencies. It could be built up with the goal that corresponds to the basic feeling of our century, namely the transfer of the social idea from internal. Life to the c oexistence of peoples.

One goal is clear from the outset: Greater Germany within its new borders, which after the victory of its arms, together with its Axis partner, will have the power-political, economic and cultural leadership within the European area, must be and remain so strong in military, defense -economic and moral terms that any attempt to change this state of affairs by forces within or outside Europe is hopeless from the outset.

But we are obliged to think not only in terms of Greater Germany, b ut also in terms of Europe in the best sense of the word, and it seems to me that we as Europeans should strive to ensure that Europe and its nations, which have historically been formed as ethnic units, should be further developed on the basis of the knowledge and progress of our time as a political, economic and cultural community of life vis -à-vis the other continents and greater areas. In doing so, the commonalities and common interests which have developed in the course of many centuries must be promot ed without destroying the diversity of economic and cultural development. Great Britain is a power alien to this community of continental European peoples, whose political and spiritual influence on our continent must be limited to the usual relations with powers foreign to it.

In economic terms, the problem is to organize the economic forces of the individual European peoples in a metropolitan area adapted to our present day technical and transport requirements, while preserving as far as possible the aspects of free national and cultural development, in such a way that the highest economic and social welfare is achieved for the peoples as a whole and not only for individual strata. The reorganization should leave free space for the living and social forces of the individual peoples, but prevent them from freezing in an unnatural fragmentation of all individual partners, as was

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the case after the World War. It is self -evident that in the future it must no longer be pos sible for continental Europe to be a huge consumer market for food and raw materials, whose most vital sources of supply are overseas, and for any military or political adversary to be able to cut off these lines of communication by a blockade. Germany and Italy will therefore have to extend their present efforts at autarky in vital food and raw materials to the whole continental European area. In view of the psychological preconditions of European community work, it would be highly desirable that the indiv idual European peoples should not be forced reluctantly into a Greater German European economic bloc, but that, recognizing the economic and cultural advantages, they should find the incentive of their own accord to participate in a continental European ec onomic community controlled from the central European center. The solution of such a task makes demands on the economy of a very great extent and high responsibility, and all our lives . will be filled with it.

You will hardly contradict me when I express the conviction that the solution of this task can be achieved only on the way of a planned arrangement of all forces, and thus the idea of planning as an organizing principle of internal .as well as of external economic relations is a self -evident prerequisite against the liberalistic idea of full freedom of movement. The affirmation of planning as an organizing principle of internal as well as interstate economic relations raises the question of the prerequisites and tasks of interstate economic planning i n large economic areas, in this case in our continental European large economic area.

If you, ladies and gentlemen, have followed me so far in my remarks about the foundations and preconditions. - If you have followed me so far in my remarks on the fundame ntals and preconditions for the reorganization of the continental European area, we must now deal with the factors and dimensions which any future form of large -scale economy on the European continent will have to reckon with: You know that continental Europe, with its 4% million square kilometers and about 325 million people, is considerably smaller than the other large areas of the earth, such as North or South America or the East Asian area, but in terms of population size and density it surpasses mos t of these large areas considerably. With 70 people per square kilometer, our part of the world has to solve completely different settlement and production problems than, for example, North America with not yet 10 people per square kilometer.

However, the problem of the continental European economic area is even more strongly determined by the great diversity of its individual sub -areas,

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of which it is composed. Continental Europe is divided into five geographically related sub-areas of similar political and economic structure:

1. Central Europe (essentially the Greater German Empire) with currently 880,000 square kilometers and 112 million inhabitants; 2. Western Europe (France, Belgium, Holland, Switzerland) with 640,000 square kilometers and about 60 million inhabitants; 3. Southeastern Europe (Hungary, Yugoslavia, Bulgaria, Romania) with a total of 760,000 square kilometers and 50 million inhabitants; 4. Southern Europe (Italy, Spain, Portugal, Greece) with a total of 1 mill. sq. km and about 85 mill. inhabitants; 5. Northern Europe (Denmark, Norway, Sweden, Finland) with 1.2 million sq. km and 17 million inhabitants.

These five sub-areas have a completely different basic biological and economic structure and are also lar gely different from each other in their previous foreign economic interdependence within the mainland and with the major non-European powers. The central European center is Germanic settlement area with dense population in a confined space, where the pressure of densification has led to extensive urbanization and industrialization. Here, more than 2/3 of the population is already employed in non-agricultural occupations, while the rest of Europe, from the center to the periphery, is increasingly shifting to the purely agrarian type. Western Europe, in its French core Romanesque settlement area with outdated and decreasing population in a large area, predominantly agrarian and without internal development impulses it is the prototype of the democratic capitalist past. In contrast, Southeastern Europe is predominantly a settlement area of Slavic peoples with the highest birth rate growth in a small area and, as a result of the previous global economic conditions, has not progressed in its basic structure beyond a highly overpopulated agricultural status. Here, the chronic overpopulation has the effect of a persistently strong pressure for economic intensification, which will break through violently under changed large -scale conditions. The situation is similar in southern Europe, while northern Europe is more of the western European type.

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I don't want to bore you with too many statistical figures, but I must cite a few to give you an idea of this disparity. In our large eco nomic area, the birth rate and population density rise sharply from west to east and from north to south, while the standard of living and income levels drop rapidly in the same direction. In the far west we have a death surplus of 0.5 -1 %o, while in the far south and east we have an increase of 15 to 20 per k of population, The agricultural population density, i.e. the number of rural population .per sq. km. of agricultural land, is 40 -50 in the west and north, and rises to about double that in the south a nd east at 80-100. If you consider that the yields per hectare in the East are only about half of the yields per hectare in Central and Western Europe because of the lower intensification and capitalization of agriculture, and that, in addition, the prices are substantially lower than our agricultural prices, then you can already draw the conclusion that the average income level and standard of living of a Southeastern European farmer is perhaps one -eighth to onetwelfth of the purchasing power of a Central or Western European farmer.

The disparity of workers' wages and, to a lesser extent, of fixed salaries and incomes is corresponding.

This already gives you an idea of the enormous differences in the individual sub-regions of our large European economic area. I would like to supplement it with some data on the standard of consumption, so that you also get an idea of the differentiation o f consumption habits. While the basis of nutrition, namely the consumption of bread and flour, is by and large quite uniform, the consumption of higher -quality foodstuffs shows a tremendous decline in the west -east and north-south directions. Annual per ca pita consumption of meat is 35 -40 kg in Western and Northern Europe, and drops to about 15 kg per capita per year in Southern and Southeastern Europe; likewise, per capita consumption of fat in the East and South reaches only about half, of that in the Nor th and West, and sugar consumption, at 6 -8 kg, is even only a quarter to a sixth of the per capita consumption, which reaches 26 kg in the West and as much as 40 kg in the North. The consumption of textiles in the South and East is half to one -third of that in the West and North, and the consumption of industrial products is only one fifth to. one-twentieth of that in Central Europe. As you can see, the importance of knowledge of these differences for all considerations of economic harmonization within the continental European area, and that, based on such basic facts, the occasionally discussed question of a customs and economic union of the European countries still has a good while to go.

If, for example, the consumption standard of the peoples of southern and southeastern Europe were to be brought into line with the consumption standard of the peoples of central and western Europe, then not only would

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the export surpluses of southeastern Europe in food and fodder cease to exist, but a deficit would appear in the overall European food and raw material balance that could no longer be bridged at all. But this is only in passing. Conversely, the demand for industrial products would be so great that it would no longer be necessary t o export finished goods overseas; the entire economic structure of continental Europe would thus be turned upside down.

In the same west -east and north-south direction in ... which birth rate and population density increase and income level, purchasing pow er and standard of living decrease, the supply of capital to the economy also decreases. The western and northern sub regions of continental Europe have more capital than they consume, while the southern and eastern sub regions have less capital than they need for their development. As a result, the countries of Western and Northern Europe have been creditors, while the countries of Southern and Eastern Europe have been debtors. As a rough index of this difference in capital endowment, you can take the circ ulation of money per capita of the population, which in the last years before the war reached RM 200 in France, RM 110 in Germany, RM 60 in Italy, and not yet RM 20 in Bulgaria. Accordingly, from west to east and from north to south, the interest rate leve l in Europe shows a considerable gradual increase.

Shortly before the outbreak of the war, the national interest rate was 2% -4% in Western and Northern Europe, 4 1⁄2 to 5% in Central Europe, and 7 -11% in Southeastern Europe. At the moment, the central bank d iscount rate is 2% in the West, 3 1⁄2% in Central Europe, and 5 -6% in Southeastern Europe. All large-scale economic considerations must reckon with these facts, which are to be converted only slowly and gradually.

As you can see from these brief remarks, the problems posed by the diversity of the individual sub -regions in Europe for large -scale economic planning are many and varied. These problems are considerably aggravated by the fact that the industrial locations are mainly concentrated in Central Europe, while the areas on the periphery of the continent are predominantly agricultural. We can distinguish two great lines of industrial massing in Europe. One zone of European industry, running in the north -south direction, developed along the medieval trade routes leading from upper Italy across the Alps to southwestern Germany and the cities of the Rhineland and Flanders; the second, running in the west -east direction, extends from the Rhine across central Germany to the edge of the Carpathian Mountains. Of the approximately 125 million commercial and industrial population in Europe, more than three quarters are concentrated in the locations marked here. It would take too long to go into the reasons for this developme nt of locations and their possible shifts in the context of large -scale economic

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planning, and I would prefer instead to briefly outline for you a characteristic of the dependence of continental Europe and its indivi dual sub-regions on the goods economy.

The spatial economic interdependence of continental Europe, which we have inherited from the political and economic system of the past, is exactly opposed to the necessities and the goal of an independent continental largescale economy. The political and world economic forces of capitalism, acting on our continent from a non -European powerhouse, have favored a centrifugal development of the individual sub -areas of our mainland, i.e., an outwardly directed interdepende nce. The reorganization starting from the Greater German Economic Area must strive for centripetal development, i.e. increased economic interdependence toward the natural center of gravity, the European center. You will see in a moment what this means for the entire economic policy in the future European metropolitan area. First of all, it should be noted that intra -European economic interdependence has always been more intensive than the monetary and goods traffic of the European mainland with the other ma jor regions of the world. Of the total trade turnover of the continental European countries of about RM 46 billion, about 24 billion, i.e. more than 51%, was accounted for by trade within' continental Europe before the war. Only about 8 billion, or 17%, wa s accounted for by trade with America, about 4 billion, or 10%, by Asia/Australia and only 3.8 billion, or 8%, by trade with Africa. Continental Europe was linked to these regions more indirectly through the intermediary of Great Britain, which accounted f or trade of approx. 6 billion = 13%.

In contrast to continental Europe, two -thirds of Great Britain's foreign trade is concentrated in the overseas areas, while only about one -third is accounted for by mainland Europe.

Within continental Europe, by far the most diverse distribution of foreign trade links is found in the central European sub region, which consequently also has the greatest independence in its dealings with non -European metropolitan areas. More than half of the region's foreign trade turnover is well distributed on the mainland, while the other half is almost equally distributed overseas. Its foreign trade links with Great Britain are the lowest of all the continental sub regions and are therefore least affected by the elimination of the Briti sh Isles.

It is important to note that Central Europe is highly active in trade with the European mainland, but passive with all other major areas of the world. The incoming payments from the active trade with the European mainland have thus financed the o utgoing payments in the passive trade with the overseas metropolitan areas. It is therefore in the interest of the Central European

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area that this pan -European basis of its balance of payments equilibrium be preserved in the context of the reorganization or not jeopardized until this equilibrium is secured by other means.

The foreign trade structure of the Southeastern European region is completely focused on Europe, and here again mainly on Central Europe.

Apart from mainland Europe, with which four -fifths of trade is conducted, there are no trading partners of any significance. In particular, there is hardly any significant turnover with the Soviet Union (1 %), which shows the complete lack of relations between the Soviet Uni on and Southeastern Europe from an economic point of view. The integration of the Southeastern European region into a new large -scale economy controlled from Central Europe is therefore by far the easiest, both materially and psychologically, because it runs absolutely parallel to the interests of these countries, The Northern European area, which has been oriented towards Great Britain and towards America in the westward extension, is in a fundamentally different system of foreign economic relations. Up to now, half of Northern Europe's trade turnover has been concentrated in these two areas, and from trade with Great Britain, Northern Europe also drew the asset balances to cover its liability surpluses in trade with the European mainland. The detachment of Northern Europe from its previous "interdependence" with Great Britain and overseas and its integration into a new economic order oriented toward Central Europe will therefore inevitably bring about fundamental structural changes and a period of crisis -ridden adjustment difficulties for this subregion.

The situation is even more difficult for the Western European region, about half of whose foreign trade is conducted within Europe, while the other half is conducted in the overseas regions. The foreign econ omic relations of Western Europe have hitherto been passive with all the great areas of the world, and the unavoidable loss of part of the foreign capital with whose interest this passivity was financed means for the Western European area the withdrawal of the most important foundations of its previous economic system and of the strata interested in it. The mentality of the western and also the northern part of continental Europe, which is oriented toward England and the West, is thus not only a cultural an d ideological one, but finds its strongest root in the material conditions of existence of these two sub-regions. A change of mentality in the sense of active participation in a large-scale continental European cooperation can therefore only be expected if the switch of economic interdependence from the centrifugal to the centripetal direction can also offer these subspaces an economic substitute

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for the losses resulting from the abandonment of their previous interdependence with England and overseas.

Finally, Southern Europe shows a similar structure to Central Europe in the distribution of its foreign economic linkages, but with a much stronger orientation toward the Mediterranean region and Africa.

After this brief description of the external economic integration of the continental European economic area and its individual sub -regions, I must now say a few words about their dependence on each other in terms of production and goods.

In the foreign trade of continent al Europe, the demand for industrial raw materials and the sale of manufactured goods play by far the most important role, while the exchange of foodstuffs and luxury foods, on the other hand, takes a back seat. Of continental Europe's net imports before t he war, raw materials accounted for about RM6 billion and foodstuffs for only RM1.3 billion, while manufactured goods had an export surplus of RM4.2 billion. In the reorganization of the continental European area, the supply of foodstuffs will therefore be mainly a matter of intra -European economic policy and intra-European production, while the supply of industrial raw materials and the sale of finished goods will continue to require strong economic interdependence between the European continent and the ot her major areas of the world for the time being.

Within the continental metropolitan area, the following groupings of the individual sub-areas result according to their present production and consumption structure: Central Europe is a densely populated, hi ghly industrialized area with a surplus of raw materials and, to a lesser extent, foodstuffs, and a surplus of manufactured goods, which has more than covered its imports of raw materials and foodstuffs in the amount of RM 4 1⁄2 billion, and its exports of manufactured goods in the amount of almost RM 5 billion. Thus, in terms of balance of payments, it is an active area that produces more than it consumes.

Southeastern Europe is a surplus area in terms of food and raw materials and a surplus area in terms of finished goods, with exports of food and raw materials amounting to around RM 1 billion, which is still considerably larger than imports of finished goods at around RM 3⁄4 billion.

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Western Europe, on the other hand, is a deficit area in raw materials and foodstuffs amounting to almost RM 4 billion, whose passive balance is not remotely covered by the small export surplus of finished goods amounting to about RM 800 million. Here we have a highly passive part of the world, w hich has consumed much more than it has produced, i.e. has lived out of its capital as a pensioner.

Northern Europe has a surplus of about RM 400 million in raw materials and foodstuffs, but an import requirement for finished goods twice as large (RM 840 million), so that in terms of balance of payments there is a small passive balance, which has so far been covered by services, shipping, interest, and so on.

Finally, Southern Europe has an import surplus in raw materials of RM 1.1 billion, which is offset by a small export surplus in foodstuffs and finished goods of around RM 300 million, so that here, too, there remains a liability balance of around RM 800 million, which has so far had to be covered by borrowing.

These few figures which I have presented to you here show some basic facts about the structure of the continental European economic area which are of fundamental importance for all considerations about closer economic cooperation.

The entire Central and Western European area is a deficit area for raw materials and foodstuffs and a surplus area for manufactured goods. But while the Central European center is completely balanced in its balance of payments, the Western European sub region has excessively high import deficits in food and raw materials, not remotely covered by exports of finished goods, which have hitherto been covered by incoming payments from capital investments abroad, especially from the colonial empires. The decision to go to war, which must lead to the loss of at least part of these foreign investments, will inevitably result in a further passivation of the balance of payments of the western part of the country, which can be compensated for gradually only by a sharp reduction in the standard of living and under crisis-like conditions of conversion. In addition, the concept of capital will also be subject to substantial shifts with the change in macroeconomic conditions. The capital wealth of an economy can lie in a high internal production power, as in the case of Germany, for example, or in the possession of gold and foreign debt instruments, as is particularly pronounced among the peoples of Western Europe.

The possession of gold and foreign securities has become hig hly questionable today, and in all probability Germany will be the most capital -rich creditor

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country in the future continental European economic area on account of its high productive power, whereas it was considere d a capital-poor debtor country only a few years ago.

The northern European region has a small balance -of-payments surplus in foodstuffs and raw materials, but has had a considerable need for subsidies for manufactured goods. Its organizational integration into the European macroeconomic area is therefore less difficult than that of the Western European area, because its liabilities are not excessive, are partly even due to interest payments to foreign countries, and can be amply covered by very considerable assets in trade in services.

The Southeast European subregion is a deficit area in manufactured goods and a surplus area in. It is active in its overall balance due to its production and consumption structure. For this reason, it will show far greater a ffinity in economic cooperation with the Central European area than the culturally closer Western and Northern Europe, and in a closer connection with Central Europe it can also expect an increase in the standard of living of its population. In this connec tion, however, it is of the greatest importance that the increase in production should precede the increase in consumption - that is, that in the coming capital investments on the part of the German economy strict attention should be paid to the fact that they should be of a production and not of a consumption character. (Otherwise, the economy there will be completely turned upside down, and the repercussions for the entire large economic area would be incalculable.

The southern European region is a subsid y area in raw materials and, on the whole, self-sufficient in foodstuffs and manufactured goods. It will have its own economic problems to solve in connection with the reorganization of the Mediterranean region and the neighboring areas of North Africa and the Near East. However, I do not want to go into these problems here, especially since this would touch upon the comprehensive problem of German -Italian cooperation in the economic reorganization of Europe.

The differences in the external economic structure of the individual subregions outlined here become even more pronounced when taking into account not only the structure of production and consumption, but also the entire balance of payments structure. Apar t from Central and Southeastern Europe, no part of our continent is in economic equilibrium. The West and the North have been so one -sidedly oriented toward balance -of-payments complementarity with England and overseas that they are hardly viable today unless they find a corresponding substitute on the European continent. The South, too, still shows a certain need for supplementation to a weakened

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degree, but its solution can be found in an expansion of the economic catchment areas in Africa and the Near East.

The center of Europe is therefore the natural center of continental Europe, not only geographically and politically, but also economically. Quite apart from the fact that the industrial heart of the continent lies here, pr oduction and consumption are in a stable equilibrium, both in terms of goods and services, which makes this area the ideal intermediary for the necessary reorientation of the other sub -regions. The prospects for cooperation between Central Europe and the S outheastern European region are particularly favorable, since its production and consumption bases have already been largely aligned with the economic structure of the Central European region. This summary of my overview of the conditions and dimensions of the continental European economic area and its individual sub-regions thus shows that a viable basis for economic reorganization in Europe is initially to be found mainly in cooperation between the Central and Southeastern European regions, which are larg ely independent of Great Britain and overseas and are stable in terms of their goods economy, in community with Southern Europe, from which the Northern and Western European sub-regions, which are highly sensitive to crises, can then be cautiously integrat ed into the new order.

Ladies and gentlemen, I am aware that the problems of the continental European economy are so comprehensive and multifaceted that they can be outlined only in very broad outlines in the course of a single lecture. We could just as well talk for several more hours about the supply of raw materials, industrial locations, transport, capital and monetary problems without coming to an end. I hope, however, that I have succeeded at least in acquainting you with the most important basic fact ors and that I have perhaps given you an impression of the size and importance, but also of the difficulties of the tasks that await you and all of us in the future.

EUROPEAN RAW MATERIAL PROBLEMS By Dr. Bruno Kiesewetter

Europe was the cradle of industry, the first continent to switch to industrialization, and we can say that it has led the way until our own time.

From the middle of the 18th century to the end of the 19th century, one decisive invention followed another: Around 1750 Invention of the spinning machine, around 1769 invention of the steam engine, around 1785 invention of the mechanical loom, around 1807 First steamboat, around 1814 First locomotive, around 1833 invention of telegraphy, around 1866 Invention of the dynamo, around 1866 invention of the telephone, around 1879 invention of the electric light bulb, around 1897 invention of wireless telegraphy.

However, industrialization is inconceivable without the development of technology. In order to carry out industrialization, there must be a technically educated staff of leading men and a technically highly educated workforce as well as a large market. These prerequisites are often overlooked by smaller states that follow the general trend toward industrialization. The importan ce of technology for industrial development has been so enormous that today it is even trying to take precedence over the economy.

There is no doubt that there is a very strong mutual influence between business and technology. This can be seen from the fac t that technical progress has had a structuring effect on the forms of business and enterprise in the economy. This is quite obvious in the raw materials industry. The growing demand for raw materials has led to the large -scale operations in the raw materials industry that we know today as the plantation economy. But it was technical development that gave rise to the raw materials problem as such in the first place. When technology in our modern sense did not yet exist, i.e. about 300 years ago, the number of important mineral resources was extraordinarily small. Only a few metals were known. Even a little more than

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100 years ago, at the beginning of the 19th century, the majority of raw materials known to us today were unknown or worthless. It was technology that first discovered and expanded the knowledge of raw materials and their applicability in the field of econ omic use. One example is the Thomas process for steel production, which was invented in 1879 and turned iron ores that had previously been worthless because they contained phosphorus, such as the Minette and Swedish ores, into a sought -after raw material. When England switched to the Thomas process in 1935 because of the exhaustion of its own low-phosphorus iron ores, which were processed by the Bessemer process, its interest in the Swedish ore supplies via Narvik increased. Today, technology is so developed that the raw materials are no longer sufficient, that new synthetic raw materials must be created for industrial use, and that, in purely quantitative terms, both the extraction and the new creation of raw materials have not yet reached an end. Whereas i n 1781 13,000 bales of cotton were sufficient to mechanize weaving technology, this process of mechanization and the expansion of the sales market associated with the increase in population have today led to the consumption of about 30 million bales of cotton in the world. Whereas in 1800 only 15 million tons of hard coal were mined in the entire world, and in 1850 the entire industrial apparatus of the world - railroads did not exist at that time - was supplied with 75 million tons of hard coal, in 1913 an d 1938 more than 1.3 billion tons of hard coal and, in addition, 1⁄4 billion tons of lignite were mined for the needs of industry and transportation in the world.

In 1800, iron production in the world was 0.4 mill. t, in 1850: 4.2 mill. t, in 1870: 12.0 mil l. t, in 1900: 40.9 mill. t, 1913: 80.0 mill. t, 1929: 98.6 mill. t, 1937: 103.9 mill. t, .

In 1870, iron ores mined in the world were 30 mill. t, in 1913: 178 mill. t, in 1929: 202 mill. t. World production of river steel increased from 0.7 mill. t (1870) to 76.5 mill. t (1913) and 135.2 mill. t (1937).

Industrialization and the associated mechanization of work processes began with the invention of the steam engine around 1769. The basis for this was the utilization of fuels. The countries with coal deposi ts have remained the major industrialized countries to this day, to which raw materials - and raw materials of every kind - flow to be processed. Industrialization started in England, which served as a model for other countries. It was followed by Germany, and the third country was the United States of North America. The race in this development is very succinctly reflected in some figures given by the President of the Institute for Business Cycle Research, Professor Wagemann, in his book "Structure and Rhythm of the World Economy". Starting from the level of 1913 equal to 100, in 1870 the industrial production of Great Britain was 43.8, that

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of Germany 17.5, and that of the United Sta tes 7.7. Thirty years later, in 1900, the figures were correspondingly 78.8 - 64.7 - 54.2. Again 10 years later, in 1910, Germany and the United States had become equal to England as industrialized countries. The figures are corresponding to 85.1 - 88.6 - 89.0.

The relationship of the ~ states to each other had changed completely. Their industrial production related to each other in 1870 as 64 to 25 to 11, in 1900 as 40 to 33 to 27, and in 1910 as 32 to 34 to 34.

Germany's development into a major industria l power after political unification in 1870, i.e. in the course of 40 years, has been quite tremendous.

However, it should not only be considered in comparison with the other two industrialized countries, but also has its own significance. Germany's extremely strong industrial development is the reason for the raw materials problem, which posed completely new tasks for Europe and the entire world after the World War. Germany's raw material situation is decisive for the world raw material problem, but it has become even more decisive for the European raw material problem. In the past, these interrelationships were clearly recognized by only a few. England and the Anglo -Saxon world deliberately downplayed them. But the consequence of the National Socialist eco nomic policy, the achievement of full employment in Germany, has opened everyone's eyes today to what the task and maintenance of such a large and versatile industrial body as Germany's means for the raw materials economy of the world.

At the rate of devel opment shown by the above index figures, a race for the world's raw materials, or at least for securing the supply of raw materials, had to begin between the three large industrialized countries mentioned above. If we disregard the United States, since it lies outside Europe and, moreover, forms a self-contained, almost self -sufficient economic area, provided with all the important raw materials and operating resources, - then in the course of development a tension between the other two large industrial sta tes, between Germany and England, had necessarily to arise. England had built up an empire in the past centuries and at the turn of the century - think of the Boer War had moved to annex even the valuable raw material sites that had not been under its ru le until then. But after all, in the period before the world war, there was a very finely tuned relationship between the major world trading countries, which we generally call or have called the world economy. In this system, the states had equal rights, p rivate property was respected and protected, even Germany as an industrial power was not disputed the possession of colonies, and there were no privileged or inferior parties in the participation in the exploitation of the world's raw materials. The moneta ry relations were therefore also so ordered that there were no payment difficulties and thus access to raw materials was open to

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any country - a state of affairs generally referred to as the "open door".

However, Germany's fi nal breakthrough as an industrial world power in the first decade of the 20th century until 1910, which became apparent as early as 1900, already put England on the map at that time; for after 1900, the policy of encirclement against Germany began, which e ventually led to the World War. The world war itself was a struggle for raw materials, and in general for raw materials in the world, a struggle for a place in the sun. While England was able to supply itself with raw materials from its own world empire, Germany, as a country poor in raw materials, was dependent on the so -called "world economy", the "world market". Since the world war the raw material question and the knowledge about the importance of the raw materials for the human life entered quite gener ally into the consciousness of the broad masses - the world war set beside the economic importance of the raw materials still the military one. The share of raw materials in the movement of goods in the world economy can be seen from Wagemann's statistics, who calculated a total world trade volume of around RM 300 billion for 1928, of which one third, i.e.

100 billion, was accounted for by raw materials and semi -finished goods. The dimensions of the development in the field of raw material utilization in th e 19th and 20th centuries are hardly comprehensible in comparison with the development of the earth's population. The earth's population has roughly tripled from 1800 to the present day, while coal production has increased a hundredfold, gold production ha s risen 120-fold, iron production 250 to 300 fold, and raw materials such as crude oil, zinc, nickel and aluminum only gained importance in the course of the 19th century.

Since the time of the world war, the whole world has been afflicted by a fear of the shortage of its own raw materials. This fear was born of the coal and oil shortages of the war and the consequences of the blockade, which did not leave its own authors un scathed. The reorganization of political relations in Europe and overseas on the basis of the Versailles Dictate, the dismemberment of organically connected states and economic areas in Europe, the creation of haves and have -nots sprang from this fear for raw materials. The international, political and diplomatic struggles of the post -war period, from the Genoa Conference of 1922 onwards, were mainly struggles for oil, struggles for the Mossul sources. The policy of the United States in Central and South Am erica was to secure its raw material base. In 1920, the alarming report of the U.S. Geological Survey had appeared, announcing that all countries except the United States of America were consuming 200 million barrels of oil a year, but that the United Stat es itself was consuming twice that amount, 400 million barrels, and that, at this rate, America's oil wells would run dry in 18 years. That would have been in 1938.

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The battles for copper and tin in the great international cartels, the battles for rubber had become vital issues for the peoples. Even in 1938, denying all the economic principles propagated by these countries, America and England made the well-known trade of rubber for c otton in order to secure these two raw materials for each other. The general stock economy of all countries before the beginning of this war makes the importance of raw materials for the life of peoples appear in a particularly bright light.

To give you an idea of the dependence of a highly industrialized country which is at the same time poor in raw materials, I will take as an example the situation of Germany. In this respect, England's situation is even less favorable if one considers only the purely sta tistical economic situation and disregards England's position in power politics. England, however, is outside Europe, has always been outside Europe and will remain outside Europe after the end of this war. The European raw material problems can be underst ood correctly only from the point of view of Germany's economic development as a starting point. In 1870, Germany was still an agricultural country.

Two-thirds of its population lived in the countryside, i.e. in municipalities with less than 2000 inhabitan ts, while the other third lived in all other municipalities, i.e. small, medium and large cities. Germany - would have at that time at all only 8 large cities over 100 000 inhabitants. These eight large cities together housed 2 million people, i.e. just un der half as much as Berlin comprises today. In 50 years, in the period from 1875 to 1925, the ratio was exactly reversed. Today, one third of the population lives in the countryside and two thirds in the cities, of which one third lives in the large cities , which - based only on the old empire - comprise 20 million people, i.e. ten times the number of 50 years ago. Whereas in the past the main focus of the German Whereas in the past the German economy focused on agriculture, in this short period Germany has become an industrial country, or more precisely, an industrial export country, since 98 % of its exports are industrial goods. To accommodate the growing population (1816: 25 mill, 1871: 41 mill, 1914: 68 mill.) in the small inadequate space, Germany had to obtain its food requirements from abroad. But it was also dependent on the development of purchasing power in the wider world for the sale of its industrial goods and, if it wanted to work and live at all, it also had to buy the ever -increasing quantities of its vital raw materials from abroad as a consequence of its lack of raw materials. In the 40 years from 1872 to the beginning of the World War in 1914, Germany's total imports of foodstuffs, luxury foods, and livestock rose from 872 mill. marks to 3 billion marks, a 31/2 -fold increase; imports of raw materials, in the same period, from 1.7 billion to 5 billion

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marks, also tripled. However, the pressure of dependence on raw materials became even more acute after the World War with its loss of valuable raw material areas for Germany. What this meant in practical terms was demonstrated by Grävell ¹) , who calculated that "an increase in net industrial production by RM. 10 billion, of which one -third was to be accounted for by production goods, one -third by consumer goods and one -third by road, canal and bridge construction, would result in a new demand for foreign raw materials of around RM. 1050 to 1200 million. More than one -tenth of the net increase in production must there fore be returned to foreign countries for raw materials. German imports of feedstuffs before the World War alone amounted to 7 mill. t annually, while in the last six years, from 1933 to 1938, we had an annual average demand of just over 1 mill. t - a consequence of the autarchic measures of the German Reich government. Very instructive for the evaluation of the German dependence on raw material possessing countries and continents is the distribution of the import, which shows the characteristic development in the width, i.e. from the European continent away over the whole world. The total German import (food and raw materials) increased from 1885 to 1913 from 2.9 billion marks to 10.8 billion, i.e. by 7.9 billion marks. While about 79% of this import came f rom Europe in 1889, only 46% came from Europe in 1913.

Germany thus became increasingly dependent on overseas imports, while it remained reliant on the more affluent European countries for the sale of its export products, since the European share of German exports remained constant at 77% and 76% respectively during these 25 years.

While England, as an island empire, had already in and of itself pointed to the "world," had moved to a tight concentration of its economic and political forces and thus had a tr emendous advantage over Germany, Germany, as the heartland of Europe, had lost the most natural basis of its existence, the European continental area, as its own supply base and had switched, so to speak, overseas. Germany, as the heartland of Europe, had lost the most natural basis of its existence, the European continental area, to a large extent as its own supply base, and had switched over to overseas, so to speak. This was not immediately dangerous as long as equality in the world economy was a self-evident axiom and financial and economic control of the overseas commodity states was in European hands. After the detachment of the overseas countries from the industrial monopoly of Europe after the ¹)Walter Grävell, Nationalwirtschaft, Großraumwirtschaft, Weltwirtschaft in: Archiv für Rechts- u.

Sozialphilosophie, vol. 27 (1933/34) p. 105.

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World War, the raw materials problem arose in full force for continental Europe, while England was the happy owner of almost all the important raw materials in the world economy. Continental Europe was thus, in terms of raw materials, at the mercy of England and the United States of North America, which after the World War increasingly emerged along side England as the world's dominant factor, and with this pronounced objective. The role that continental Europe was to play in this so -called "world economy" and that had been assigned to it was therefore not so much the result of natural geographical-geological preconditions as the product of English world politics working according to plan with the aim of final world domination.

What are the details of the ra w materials problem for Europe? ¹) In 1933, continental Europe, including Russia, accounted for more than three quarters of its own consumption of foodstuffs such as cereals, sugar, etc., 81% of wheat, 73% of corn, 74% of sugar, and even had a surplus of butter. However, Europe's production of 'foodstuffs has increased in all countries since 1933 to such an extent that Europe can now be regarded as largely self -sufficient even in an emergency, apart from oil -bearing crops such as rapeseed, turnips, soybeans, etc., and protein -rich feedstuffs. On average in 1936/38, continental Europe had an import sub sidy in % of consumption for vegetable fats of 27.0% and for concentrates of 86.8%. In 1933, continental Europe still absorbed about one -third of world exports of corn, slightly more than half of oilseeds, over 60% of oil fruits, and over 55% of soybeans. Soybeans, for example, were sourced entirely from Asia in 1933. In the meantime, Romania and other countries have switched over to the cultivation of soybeans, the production of which has increased to an extent that is, after all, considerable for a start. Breeding trials are also being made in Germany. At present, the European Southeast still harvests 70% less than Denmark, Holland, and Belgium in cereals and potatoes; in meat, milk, and other processed agricultural products, the Southeast lags far behind the top yields, which in many cases are ten times higher. It is no exaggeration to say that the ultimate goal is to double Europe's agricultural production. Europe is dependent on overseas for luxury foodstuffs such as cocoa, coffee and tea. Only half of t he tobacco consumption is covered by the European region. In hard coal, potash, and sulfur gravel, Europe produces more than it consumes. It is the world's leading exporter of these minerals.

¹)Cf. also A Reithinger, Das wirtschaftliche Gesicht Europas, Stuttgart 1936, p. 44 ff. - Furthermore, Reithinger, Großbritannien - Kraft und Schwäche eines Weltreiches, Europäische Revue, April issue 1941. - The following figures are taken from the Statistical Yearbook 1938.

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As for metals, the country is self -sufficient in iron ore and aluminum. In zinc, which accounted for about 60 % of world exports, very great progress has now been made in production, and the supply situation has improved considerably.

The scarce metals for contine ntal Europe are lead, copper and tin. Continental Europe has also been dependent on overseas for natural rubber. It absorbed about one-fifth of world exports. The absorption of buna production, now carried on not only by Germany alone but also by Italy and Russia, is already well advanced, but it is not sufficient for Continental Europe to be considered self-sufficient.

In 1933, continental Europe still accounted for one fifth of world exports of crude oil. Here, however, the situation looks much more favor able. By 1937, the continent's own production had already reached slightly more than one third of consumption. World oil stocks at the beginning of 1936 were estimated at around 4 billion tons. Production in 1937 amounted to about 280 million tons, so that , on the basis of this output, the world's total petroleum reserves would have a life of 16 years (until about 1955).

Of these reserve s of 4066 mill. t, according to the estimates at that time, North America 51 % = 2079 mill. t, South America 8.1 % = 329 m ill, t, Oceania 1 (Low!, India, Borneo) 3.6 % = 144 mill. t. Africa with 2.3 mill. t is hardly to be counted, while Asia with 19.0 % = 769 mill. t. and Europe with 18.0% = 742 mill. t , are about equal. Of the 742 mill. t of European petroleum reserves bas ed on the 1936 estimate, Russia accounted for over 80% and Romania for 15% after the reorganization of borders with Russia in the East in 1939. In 1938, continental Europe had a petroleum consumption of about 49 mill. t, but it produced only 37 mill. t, in cluding synthetic gasoline in Germany, and 39.3 mill. t in Italy; thus, it had to import about 10 mill. t. Continental Europe, however, has extensive opportunities to increase oil production: first in Romania, whose decline in production, according to expe rt judgment, is not due to depletion of deposits, but to the wrong petroleum policy of the Romanian state and the reluctance of Western European capital to invest, Next to Romania stands Russia as the largest petroleum producer of the future. According to the latest estimates from 1939, the world reserves are not 4 billion tons, but about 10 billion tons. According to these estimates, Russia's oil reserves do not amount to 600 million tons, but to 3 billion tons and thus account for 32% of the world's reserves. The future picture of oil supply has thus shifted considerably.

A safe and absolutely valid assessment of the raw material situation is impossible at all, because new deposits are discovered again and again, but on the other hand also the advancing te chnology develops again and again new methods for the tracing of so far unknown or inaccessible deposits. The

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scientific, technical and industrial development of the last seven years has shown us that the sole consideration of "natural" raw materials, their deposits and their development is too one -sided and shows the supply situation in a completely wrong light. This is evidenced by the increasing production of coal based petroleum, which today already puts Europe in a position to replace the purely statistically calculated shortfall with the "synthetic" product.

This raw material base is contrasted with the huge industrial capacity of continental Europe. In 1937, continental Europe (e xcluding England, but including Russia) had a pig iron output of 50 million tons, or 48% of world production; crude steel production was 60 million tons, or 45% of world production. In contrast, North America (United States of America and Canada) accounted for 38% of world pig iron production (39 mill. t) and 39% of world steel production (53 mill. t). The iron content of the world's iron ore production was 77.3 mill. t in 1936. Continental European production accounted for 49%, North American (USA., Newfou ndland, Cuba) for 33% and North African iron ore for 2.5%. With the North African iron ores, the European region would thus dominate more than half of the world's iron production in terms of iron content.

In copper, continental Europe had a smelting capaci ty of about 450,000 t in 1937, or about 20% of the world's smelting capacity. The copper content of the ores (excluding Cyprus) was 234,000 t, so that slightly more than half of the processing capacity in copper could be covered from the European area.

In zinc, Greater Germany is self -sufficient after the reassignment of the Upper Silesian area, but not the rest of continental Europe. The major zinc smelting countries are in western Europe (Belgium, France, the Netherlands, and Norway), with a smelting outp ut (1937) of 355,000 tons. However, they have no ore base of their own. In addition, there is Italy, the former Yugoslavia, Romania, Spain and Russia with 122 000 t. Continental Europe's smelter output of 754 000 t in 1937 was covered by its own ore base a t 487 000 t, or 65%. The North American continent (USA, Canada, Newfoundland, excluding Mexico) is just about fully self-sufficient in this respect (smelter output of 780 000 t against a mine output of 792 000 t).

In lead, the coverage rate for continental Europe was about 70%, for North America (including Canada and Newfoundland, excluding Mexico) 71%, In steel hardening metals such as chromium, continental Europe accounted for 48% (513,000 tons) of world ore production (1.070 mill, tons) in 1936, but the United States, including Cuba, accounted for only 6.6% (71,400 tons).

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In the world production of tungsten (24.746 mill. kg) in 1936, Asia accounted for 71% (17.470 mill. kg), Europe (excluding England) for 5.8% (1.662 mill. k g), North America (USA.) for 9.6% (2.370 mill. kg), and South America for 10.2% (2.535 mill, kg). The a n t i m o n producing countries in 1936 were China with 51%, South America with 13.4%, Mexico with 21%, continental Europe with 8.5%, North America (USA.), on the other hand, with just under 2% of world production. Cobalt is not extracted at all in Europe or to a quite insufficient extent, North America (Canada) supplied only smaller quantities in 1937 (282,000 kg), Burma 298,000 kg, but by far the larges t share was accounted for by Africa (Belgian Congo, French Morocco and Northern Rhodesia) with a combined total of 2.965 million kg. For cryolite, the monopoly supplier is Greenland, with an average of 20-30 000 t per year. Today, however, alloys and new m aterials, such as pressed materials, and new methods of using already known materials, such as glass, have largely inserted themselves into this gap in the nonferrous metals. It is no longer impossible for today's technology and the state of scientific research to completely eliminate and replace certain features of nature.

In view of the still inadequate documentation in many respects - the figures given only give the picture of one year - no firm indications can be given for an absolutely reliable assessm ent of the European raw material situation. Only approximate outlines are visible, which do not make the foundations of the European metropolitan economy appear significantly less favorable than those of the other metropolitan areas, even on the basis of t he generally comparable individual regions. With a conscious and tight cooperation of the European countries, the self -sufficient supply shares in the individual areas can undoubtedly be substantially increased, especially by increasing the production in Southeastern Europe. Here, above all, the former Yugoslavia should be mentioned as a metal country with a promising future. In the north, Finland comes into consideration, and in the east especially Russia. Within its borders before June 22, 1941, Soviet Ru ssia possessed large deposits of hard steel metals such as nickel, manganese, titanium, tungsten and vanadium. In manganese iron ore alone, it held 73 % of the world's reserves and thus had a virtual monopoly. As early as 1937, it accounted for 58 % of the world's production of these ores. In 1913, about 4% of the annual production of manganese ore remained in Russia; by 1936, this figure had risen to 60%. The copper deposits of the Soviet Union are estimated at over 6 million tons, including Siberia even a t 10 million tons. In Siberia, lead and zinc are present to a greater extent. In total, the stocks are given as 4 mill. t of lead and 9 mill. t of zinc.

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Europe still has great riches i n its soil, which only need to be exploited after a political pacification of the continent and the establishment of a new economic order based on cooperation. In general, the energies inherent in close cooperation based on solidarity are underestimated, a s the last seven years have shown. However, the task of progressive independence for Europe is a production problem and therefore makes greater demands - indeed, it virtually challenges us to work together. Wagemann has calculated that in 1928, of a total world trade turnover of RM 278 billion, Europe alone accounted for RM 145 billion, America for RM 71 billion and the other continents for RM 62 billion. If inter -European sales amounting to 60% are deducted from the European total of RM 145 billion, Europe as a continent still accounts for RM 58 billion. (albeit including England). Europe is undoubtedly not as rich as other parts of the world, but it still has greater development potential, especially in the field of industrial raw materials. For example, the production of light metals is one of Europe's strengths. The existing imbalance between the raw material output of this continent and its industrial capacity has been bridged to a large extent in the last ten years not only by further exploitation of na tural raw material deposits, but also by the creation of completely new materials, and Europe's raw material cover has thus been increased not insignificantly in certain areas.

The Eastern and Northeastern European countries are the main suppliers of flax and hemp. The European southeast is coming more to the fore as a producer of hemp and wool, while its flax and cotton crops are still developing.

Eastern and Northern Europe are the suppliers of pulp, the basis for artificial silk and rayon production. Whi le Central and Western Europe are the production centers for the European textile industry, Northern as well as Southeastern and Eastern Europe are the sales areas for semi -finished and finished textile products. Thus, the European textile industry shows a strong complementary character, which guarantees a permanent employment with a mutual coordination of interests. The question arises to what extent continental Europe can manage without overseas raw materials.

Two decades ago, Europe was still dependent e xclusively on foreign countries for cotton. Cotton was not grown in any country in Europe. Today, Russia is not only a cotton producer, but also a cotton exporter. In 1937/38, Russia's cotton production was already twice that of Brazil and almost equaled t hat of British India. Cotton is also planted in Romania, Bulgaria, Greece, Turkey, southern Italy and southern Spain. The total cotton production of European countries in 1937/38 was 907,000 tons. This was about 11% of the world harvest, which is estimated at 8.3 million tons. This compares with continental European cotton consumption of 1.404 million tons, which represents about a quarter of world consumption of 5.810

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million tons. Accordingly, 64 % of European cotton consumption is covered in purely continental terms. On the basis of the 1937 figures, Europe had already largely closed the gap of around 500,000 t by producing rayon and artificial silk. European production of artificial silk in 1937 was 173,000 tons, and rayon production 180,000 tons, making a total of 353,000 tons. In other words, 70% of the missing raw material gap had already been filled. It should be borne in mind that the production figures for synthetic textile fibers have long since been overtaken, since Germany alone has more than doubled its rayon production since 1937. Even taking into account an increase in consumption since 1937, European raw material production in cotton, rayon and artificial silk is capable of meeting demand.

This does not even take into account the rapid growth of raw cotton cultivation in Bulgaria, Greece, Turkey and Romania. In Bulgaria, the area under cultivation increased from 55,000 hectares in 1938 to over 60,000 hectares in 1939, so that the self -sufficiency rate has n ow risen from 33% (1937) to about 50%. In Greece, under the leadership of the National Cotton Institute, production rose from 3 083 t (1924) to 14 600 t . (1938), thus reaching almost 90% of demand, with a substantial improvement in quality. Turkey, like R ussia, has already become a cotton exporting country. Turkey's cultivated area was 275,000 ha in 1938, but according to detailed scientific studies it can be expanded to 1.6 million ha. The crop yield increased from 51 000 t to 66 000 t from 1936-1938. With a domestic processing rate of 30%, Turkish cotton production thus exceeds consumption to a considerable extent. Now that self sufficiency has been achieved in some of these countries, they will become increasingly important as cotton exporting countries for the continental European textile industry in the next few years. However, if the entire Mediterranean region, i.e. the North African areas (Algeria, Egypt and the British-Egyptian Sudan) and the Near East (Syria -Lebanon and Iraq) with a production of 560,000 t is added, the total amount of cotton available to the European textile industry is 1.467 million t, almost all of which can be used for processing, since the North African and Near Asian countries' own consumption is zero. Including the Mediterran ean production areas, the European consumption of 1.404 million tons would therefore be more than fully covered, only in the natural raw material cotton without including the synthetic textile fiber materials.

Not quite as favorable, however, calculated on the basis of 1936, the figures for which are available in full, are the supply ratios in wool. Continental Europe (excluding England, but including Russia) had a raw wool production of 335,700 tons in 1936, or 19.2% of world production, of 1.747 million t ons.

If one assumes, according to general professional experience, a processing quantity of washed wool in the amount of 45% of the raw wool, this results in

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a quantity of 141,000 t. Compared with an estimated European wool consumption of 430,000 t, there is thus only a coverage rate of 33%. The missing two-thirds can be procured in the main only by an expansion of the ripping wool industry and intensification of the sheep breeding in the agricultural countries to a part. Continental Europe, excluding England, which had the largest sheep population before Spain, but including Turkey, had about 167 million sheep, in which number the USSR, (European and Asian part, borders before June 22, 1941) is included with 50 million. The Balkan countries, including Turkey, accounted for about 50 million head. However, the expansion of sheep breeding in southeastern Europe and the improvement of the quality of wool fiber, which at present does not mee t all manufacturing requirements, can certainly be achieved, since sheep farming in these countries is still practiced primarily for milk and meat production. If North Africa and the Near East are also included in this calculation, the quantity of washed wool calculated using the same method would increase by 24 255 t, so that the total (including the continental European amount of 141 000 t) would be 165 255 t, or just under 39 % (instead of 33 %) of European wool consumption. The continental European shee p population of 167 mill. would be increased by 2.676 mill. in the Near East (Palestine, Syria -Lebanon, Transjordan) and by 24.782 mill. in North Africa (Egypt, British -Egyptian Sudan, Algeria, French Morocco, Tunisia, Libya), i.e. by a total of slightly m ore than 27 mill. head or by 16%. Despite all the measures taken by the European states to promote wool production, this will probably not be enough to satisfy all demands, so that continental Europe will remain dependent on imports of South American and S outh African wool for about one -third of its requirements.

In raw silk was Europe (including the USSR.) i n 1935, Europe (including the USSR) accounted for only 6.5% of world production (3570 t against 54 804 t); in 1936, Europe alone (excluding the USSR) p roduced 3950 t of raw silk. In the meantime, silkworm breeding has made further great progress, not only in the Mediterranean countries, but also in the Balkans and in Germany.

In Flax and hemp, Europe leads the world and is absolutely self -sufficient. Even before the World War, Russia (including the Belarusian areas of the former Poland and the former peripheral states, which are the main production areas) had a virtual monopoly with an 80% share of world flax production. It should be borne in mind that ot her major textile countries, such as Germany, had promoted flax cultivation and achieved a self -sufficiency rate of 60% to 70% in this respect, not to mention the new flax crops of the Balkans. In hemp, European production capacity is over 80% of the world crop. Russia alone supplied about 150,000 tons of hemp fiber in 1937, or 40% of world production. Although Argentina accounts for about half of the world's linseed

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harvest (1.8 million tons), Russia is in second place with 0.8 million tons, or 20% of the world harvest.

The ever-increasing strengthening of Europe's textile raw material base is of vital importance for the continent, as it forms the largest industrial processing center within the world textile economy. Of the 1 49.5 million cotton spindles in the world in 1937, 60%, or 88.6 million, were located in Europe alone.

Excluding England, with 38.8 million spindles or 26% of the world total, continental Europe with 49.9 million still accounted for 33.5% or one third. In the case of cotton looms, the percentage share is even greater: of 3.070 million spindles in 1936, 1.742 million (56.5%) were allotted to Europe as a whole and, excluding England with 0.505 million (16.5%), Continental Europe alone accounted for 1.237 mill ion or 40% of the world total. In line with Europe's outstanding importance as a flaxland, 60% (1.9 million) of the world's flax spindles and, for the same reason, 73% (0.103 million) of the world's linen looms are located in continental Europe. Despite th e scarcity of raw materials in silk, Germany, Italy and France even have about 110,000 silk looms, while the United States of North America, the largest silk -consuming country (natural and artificial silk), has only 95,000.

Europe today, by developing the productive forces dormant in it and mobilizing its generative reserves, is consciously pursuing autarky, as the United States of North America has always done and as England tried to do in the crisis years by creating its Ottawa system. Autarkic thinking, as an integral part of any nationally conscious thinking, had already more or less taken hold of the individual countries. This autarky, which all countries poor in raw materials are driving, is not, however, an ideological fantasy of some "world view", but is nothing more than the rejection of the imperialist methods of exploitation of the world war "victors". The idea of autarky was born during the world war and was necessarily' the result of the decay of the "world economy". Despite the conscious and con sistent pursuit of economic independence, however, it is clear that "there is no such thing as a complete, absolute self-sufficiency of a country that could exist without any economic connection with other economies. The self -sufficiency in the field of fo od, raw material supply or the production of finished industrial goods, which most countries have achieved to a greater or lesser extent, has been first and foremost a political self -sufficiency, an emergency self -sufficiency, which is supposed to gather t ogether all the forces of the country in case of emergency.

The self-sufficiency in itself has been considered an economic absurdity with reference to the higher production costs of synthetic products in comparison with the cheaper natural raw materials on the "world market". If the principle of "cheapest" production, i.e. production at the lowest cost, is to be enforced, then one precondition must first be realized: the "world market" in all

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products must be free and accessible to all under equal conditions. But this world market was dominated by the "victorious* states and the international cartels and corporations under their protection, behind which stood the international finance c apital with its political ambitions. Through this international control, established precisely on the world raw materials market, of a very few states, which, moreover, had joined together to form political life communities with a one -sided ideological ten dency, the purchasing possibilities of the "havenots" were hindered and, through the trade policy methods and currency manipulations of the same countries, the international payment possibilities were also destroyed.

The cost problem in the sense of the ol d liberal world-economic school, which proclaimed the "absolutely" lowest costs in the "world" as the most desirable and the "most economical", does not play today, since one has to employ huge armies of workers, the role which was attributed to it so far - at least not the exclusively internationally oriented cost thinking. People today no longer think in terms of international cost comparisons, as the merchant people of England do, but in terms of national cost elements. but in national cost elements, i.e . in production, employment, labor - and not in petty price differences. Since the states today have to provide for a numerous, constantly growing working population, what matters to them is not the exploitation of a small cost advantage with all its conti ngencies, but above all the security of raw material supply and thus the permanence of employment.

I have already said that not each individual country for itself, isolated, cannot achieve complete self -sufficiency for a variety of reasons, some of them v ery obvious, which cannot be discussed in this context. The imperfection of the productive forces existing in a smaller area, such as a national economy, can, however, be compensated to a greater or lesser extent by the combination of several related and m utually complementary national economies in an organically coherent economic "metropolitan area". This form of economic cooperation offers greater possibilities in resisting the international blockade of world commodity markets by a few; world powers. The United States of North America has always been very consistently self -sufficient in its history.

England, despite its immense wealth in the world's goods, went to work on the formation of a great self -contained economic empire in Ottawa when the rest of the world was chasing the "world economic" ideals still propagated by England and the entire Anglo -Saxon world today. In East Asia, highly industrialized Japan, poor in raw materials and dependent on exports, forms its habitat.

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And Europe? Europe also wants to build up a planned continental economy with Africa as the natural supplementary area, in order to create the basis for its processing industry and the millions of people employed in it by systematically expanding its raw m aterial resources. However, this European economy is only a makeshift economy, because we know very well that Europe is "not" as rich in certain raw materials as other parts of the world, but that its raw materials economy, as already mentioned, is still c apable of development to a large extent, quite apart from the synthetic creation of raw materials, which has already been very successful in Europe.

The European raw material problem, however, is a production problem and not primarily a trade problem - as England and the other possessing countries regard it. The character of emergency self -sufficiency as an expression of a common reflection of the European peoples on the interests of their life security is, however, again not a yardstick for the assessment of further development. This emergency self -sufficiency is not to be regarded as the final objective - as a self-contained economy on a European basis. The European power energies are so great that they still radiate beyond the European metropolitan area, so that Europe still needs overseas. After all, development and the standard of living should not be stabilized on the supply possibilities from the European area. That could mean a reduction in certain cases. On the contrary, the standard of living of all European peoples should be increased, and this is synonymous with trade with overseas countries. The organization of the European large -scale economic area is only a preliminary stage.

The European as well as the international raw material problem is not only a material, purely quantitative matter, but it has long transcended this sphere of quantity, if I may say so, and has become an organizational problem on the broadest basis. It is the core problem of a reorganization of the world economy in general.

LARGE-CAPACITY RELOCATIONS IN EUROPEAN FOREIGN TRADE From Dr. Walter Grävell

The revolutionary political events which we have been experiencing in Europe for about 8 years and which have found their preliminary climax in the warlike conflict between Germany and the Western democracies, i.e. basically only England, can only be appreciated in their full significance and scope against the background of the European history of the last 4 centuries, if not of the last 1000 years. For today we are faced with a development which presents itself as the overcoming of the 19th century, which in turn has been the result of the 18th, 17th and 16th centuries and the earlier centuries.

With the discovery of America at the end of the 15th century the continental political chapter of the history of Europe closes and the real conquest of the world begins. Four centuries were needed to finally reach the state that presented itself to us at the end of the 19th century. World empires had arisen and passed away in the me antime: the Spanish Empire, the Dutch Empire, the French Empire. The world was conquered with religious, commercial and imperial aims, but only the empire of England, which understood the world in its spatial meaning and made the space of this world subser vient to its vital interests, had a lasting effect. Even poor in natural resources and production possibilities, it strove to reach out to the undeveloped areas of Asia and Australia, America and Africa, in order to secure them as sources of food and raw materials. Only in this way could England live, grow and become powerful.

The other European peoples, especially in the 19th century, were under the same or even greater biological pressure; they, too, could no longer feed and maintain themselves in their o wn area; they, too, had to turn to overseas supplies. But they would not be able to secure this supply politically, as England did.

Germany only crossed the borders of Europe in the second half of the 19th century, i.e. at a time when the British Empire ha d long since been firmly established and seemed untouchable. Moreover, the world was already almost completely distributed at that time. Essentially, only in Africa were there still free spaces available, which Germany could directly exploit for its supply needs. This was little enough and was not sufficient to satisfy its vital needs.

England cleverly accommodated this situation. It had long recognized that all of Europe was economically dependent on the world. Here there was a shortage of food, there a sh ortage of raw materials. This vital need had to be

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covered. England allowed this. However, England's dominion over the sources of demand must not be lost or even diminished. Thus, a synthesis had to be found between the supply c laims of Europe and the unconditional, eternal English claim to world power. To this end, the principle of the open door and the principle of freedom of the seas were proclaimed. Both principles could be proclaimed because they did not touch the actual col onial possessions of England, nor did they interfere with the naval supremacy actually exercised by England. For, of course, the principles were to apply only if English naval power guaranteed their maintenance. The justification of international trade was thereby founded on the principle of the international division of labor, and the order in the interstate exchange of goods was subjected to the law of comparative cost. And this economically seemingly reasonable and scientifically seemingly flawless way t o get to the goods of the earth was finally hemmed in morally by granting every country the right to general most favored-nation treatment in solemn treaties.

Truly satanic is this liberal system of foreign trade, the scientific basis of which, by the way, has not been refuted by science until today.

And the whole world has bowed to this economic system dictated by English interests. By the end of the 19th century, England had not only subjugated a large part of the world, thus possessing a world empire wit h sufficient food and raw material capacities in its dominions, colonies and spheres of influence to supply the mother country with everything it needed; England also had, and this is even more decisive than the existence and scope of the British Empire, England had the livelihoods of Europe in its grip. For the English system of world trade had become the valve which intercepted the biological pressure of Europe. I.e. Europe had grown with strongest population increase in its economic need satisfaction mor e and more beyond its spatial borders and had shifted thus the bases of its existence into overseas areas. These, however, or rather their access routes to Europe, were in the hands of England.

The amazing thing about this process was that the peoples of continental Europe and their leaders were not aware, or at least did not want to become aware, of the fatal, fateful dependence into which they had placed themselves economically and politically. They simply did not feel these repercussions. On the contrar y, the state of affairs that had developed under the sign of free trade, the international division of labor, and general most -favored-nation status was taken for freedom by them, and especially by those European western rim states that, like Spain, Portug al, France, and Holland, had been deprived of their world empire by England, even if they still had more or less extensive colonial territories, especially in Africa. These countries were not aware that their entire colonial, i.e. intercontinental, existen ce only lasted

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within the framework of the British world empire. Their economic and political freedom was conditional on the recognition of English world domination; they were, as it were, under the protecti on of the English fleet. The entire world trade of Europe was under the protection of the English navy. The entire foreign trade of Europe had thus subjected itself to British necessities and bowed to British laws.

Continental Europe's trade turnover with overseas and Great Britain amounted to more than 31 billion marks in 1913, or 46% of total continental European foreign trade. These 31 billion marks were the first pawn which England held and which gave her the opportunity not to disturb Europe's mania fo r freedom.

In 1913, Germany had imports from overseas amounting to nearly 5 billion marks, or 46% of her total imports. This 46% tied Germany to the world. 53 Mill. M. or 0.5% of the total import came from the German colonies. But even if they had been mor e, they would not, in essence, have reduced Germany's economic dependence on overseas; for the route to the German colonies was dominated not by Germany but by England.

Every attempt of a European state to get rid of the economic freedom guaranteed by England, i.e. to escape from English world domination, was suppressed by England. The most grandiose example, the World War of 1914/18, significantly ended with the destruction of the German fleet and the robbery of the German colonies. The western periphe ral states remained in possession of their colonies as satellites of England; France, however, was denied to draw the last power -political consequences from its victory, whereby in this context it can be left open whether it would have been able to do so at all in the long run, and Italy, in order not to let it become a danger in the Mediterranean, was cheated of its colonial claims despite given promises.

But even more: Germany was not only pushed back on Europe, but, by being surrounded by a ring of Frenc h vassal states, limited to its own national space.

And this was further reduced in size by cutting off valuable agricultural surplus areas and raw material deposits from the old Reich. On the other hand, the unification of the German lands outside the emp ire with the mother country had, of course, to be omitted. Germany's need for supplies, which was even greater than before the war, was directed to the markets, to the "free" world markets. There it was to be able to buy what it needed, provided it had the necessary foreign currency. foreign currency.

The old game according to the rules of liberalism could now begin anew. In fact, Germany again bought what it needed on the world markets. And if it lacked the foreign exchange to do so, it borrowed it. And th ey were borrowed

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at first. In the years 1925/29, Germany purchased goods from overseas for about RM 31 billion. In 1925/29, Germany purchased goods from overseas for about RM 31 billion and owed almost RM 8 billion in trade bala nce. Apparently, then, world trade experienced a new flowering, its total turnover rising to almost RM. 300 billion a year; the principle of general most -favored-nation treatment experienced a glorious rebirth, and the law of the international division of labor celebrated veritable triumphs in monopolies and monocultures.

The structure of Europe's foreign trade, both country -wise and commoditywise, did not differ significantly after the World War from that before it. In 1928, continental Europe obtained 4 0% of its foreign trade requirements from overseas, compared with 33% in 1913. 49% of Germany's imports came from overseas in 1928, compared with 46% in 1913. More or less the same goods, both foodstuffs and raw materials, were in the foreground in both ye ars, apart from certain changes due to technical progress. Europe's livelihoods were once again shifted out into the world under English leadership, they were once again under the protection of the English fleet. England seemed to be saved, the claim to eternity of its rule justified.

But the economic and financial collapse of the world economy, which began at the end of 1929, revealed in a flash that there was a new trend in the world economy. world must have changed fundamentally compared to 1914. The automatic balance-of-payments system suddenly ceased to function, the credit system failed, and liberalism as an economic system proved incapable of solving the problems of political interest payments and of satisfying the European demand for goods. In consta nt interaction, employment and foreign trade declined.

England was obviously no longer able to cope with the situation; it was unable to master the difficulties of its world economy. Continental Europe began to revolt, it became aware that the liberal econ omic principles were not inviolable laws. They seemed to be surmountable, and even more, they were recognized as an instrument of British power politics, as which they came into stronger and stronger opposition to the national forces of Europe. However, it took the whole gravity of the crisis years 1930 to 1932 to finally sink a world of ideas that had determined Europe's world economic relations for a few centuries.

It was no accident that Germany led the way in the struggle against liberalism and for a reorganization of the world economy. Of all nations, Germany had borne the brunt of the conclusion of the World War, i.e. the most absurd of all peace treaties, and of the consequences of the great world economic crisis.

With its 135 people per square kilome ter, with partly meager soil conditions,

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climatically disadvantaged and provided with only a few raw materials in sufficient mass, Germany could not live. But it wanted to live, indeed, it was willing to make the same demands on life that other nations had long since taken for granted.

What a wonder that Germany drew clear -sighted conclusions from the experiences it had to make in the world war and in the great world economic crisis of the post -war years! Certainly, this attitude was revolutionary, and it was initially perceived as disturbing almost all over the world. The Western democracies, led by England, which very soon recognized the imminent danger, revolted and opened the fight in defense of their poss essions. To this possession belonged also the whole requisite of free trade, But Germany went its way undeterred, though slowly. Step by step it broke away from the bonds of liberalism and built up a new foreign trade on a new basis. It replaced the purely economic principle of the international division of labor with that of the rational division of labor, replaced general most -favored-nation treatment with the principle of reciprocity, and replaced the law of comparative costs with the demand for social j ustice. The rule of the market as an ordering power was negated by recognizing again the essence of the economy as a function of the people. In a word, in place of the liberalist principle of foreign trade, Germany proclaimed a folkish principle of foreign trade as the basis of its foreign trade relations. We will see in a moment what profound consequences this turn has had.

The decisive difference between the two principles of ordering foreign trade, the liberalistic and the völkisch - you can also say bet ween the English and the German principle - lies in the following: while the liberalistic principle knows only the whole world as the spatial field of its activity, the völkisch principle of foreign trade starts from quite specific spatial concepts and res tricts itself to ordering foreign trade in a firmly delimited space, the living space of the nation. There has been a return, as it were, to the concept of space; the fateful connection between people and space has been recognized again, and it has been taken as the starting point for the reorganization of foreign trade, which is thus once again tied to the laws of life and the necessities of life of the people.

The situation for Germany is as follows: Germany cannot do without the supply of food and raw ma terials from abroad.

This circumstance obliges it first and foremost to make maximum use of its own resources. The four -year plans and the production battles serve the task of achieving maximum performance on the country's own soil to supply the people and the economy. The first consequences for foreign trade are based on this: any import that interferes with the desired domestic production must

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be avoided. I say deliberate production; for I would note that the nature and extent of domestic production will be different at different times. The goal of German economic policy is not self -sufficiency on its own soil, but the greatest possible welfare. Only one restriction applies here: the security of the supply of necessities, namely social and defense necessities, must be guaranteed at all times and in all situations. But only within this framework is there an absolute constraint on the orientation of the national economy.

But secondly, the demand for essential goods, which cannot be met at home even at peak performance, must be satisfied abroad in such a way that no dangerous interruption can occur in any kind of crisis. It leads to a division of foreign trade into supply trade and trade in dispensable goods. Supply trade is foreign trade in non-essential goods. This supply trade, if it is to fulfill its task, requires the existence of a supply area, a living space. Here we encounter the idea of space, the spatiality of the völkisch principle of foreign trade. And here the question ar ises as to the supply area of Germany and further as to the supply area of Europe.

The political powerhouse of the new Europe is the Berlin -Rome axis. Its existence requires the economic independence of continental Europe. This means that the peoples of co ntinental Europe must represent an economic unity. unity must be formed. The economy of each nation must be directed toward this unity, and this is the source of the obligations of each national economy. This situation is an absolute compulsion; there is n o choice.

However, the coercion that exists here must not be confused with lack of freedom. In truth, things are quite different. In truth, the recognition of the economic unity of Europe means the economic freedom of the peoples of continental Europe. The supposed freedom of the western peripheral states with colonial possessions was not based on the right to organize their lives freely, but, as I have already noted, on the recognition of the British world monopoly. Only within the framework of British wor ld domination were these and other countries free. Indeed, the present war in particular brings home emphatically to even the most stubborn adherent of a liberalist conception of economics the actual lack of freedom of these countries in the face of the British claim to rule. In reality, they had no right to freely shape their economy; they had to fit into the economic order of the British world empire.

And it was only thanks to England's political art of masking that they did not feel their chains in norma l times. England let the peoples, or at least their ruling classes, earn as long as it did not harm them. And these mistook the international freedom of movement of man and capital for sovereignty, It is perhaps to be regarded as the greatest success of Br itish diplomacy to have pretended to the world that the 19th century was the century of freedom.

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True freedom, however, is not of the kind: And if you are not willing, then I need force; true freedom is inner obligation. Today it is a question of the obligation of the European peoples towards the existence of Europe. Their space is European space, and as such it has no right to adjust to the vital needs of a colonial power which has emancipated itself from Eur ope, for which Europe is only a sum of forces which have to cancel each other out, and which is ready at any time to sacrifice Europe or at least to weaken it decisively if the balance of forces is no longer balanced. In the future, continental Europe must establish itself as an economic unit. This commandment is today, as it were, the categorical imperative for the peoples of Europe. Let us say that Denmark has to take note of this as well as France or Holland; and Germany has to take note of this as well as Romania and Greece; and Italy, Switzerland and Spain have to take note of this as well. All European peoples have to take note of this. This imperative does not stop at the "big ones" and does not apply only to the "small ones," even if the influence of the various forces on the shaping of the European economy varies. It cannot be surprising that the power centers of Europe, i.e. the Berlin -Rome axis, will ultimately determine the basic orientation of the economic community.

So Germany is actually only t he first exponent of a European economy; the German supply area is thus organically embedded in the large European economic area, and therefore cannot be separated out independently. Organic units cannot be broken down into viable parts. German foreign tra de will only be able to fulfill its task within the framework of a continental European economic unit. Germany's existence cannot be separated from the unity of continental Europe.

The result of economic reorganization will be fourfold for Europe: 1. there will be stable and secure economic conditions in each European country; 2. there will be healthy foreign trade among European countries; 3. there will remain a supply trade that reaches beyond the borders of Europe; and 4. there will be room for a flouris hing trade of Europe with the rest of the world, in goods which are either dispensable by their nature or whose consumption can be dispensed with in times of crisis without danger to the existence of the economic community.

First, a few words on the third point, which is of particular interest here.

Europe cannot provide for itself completely from an economic point of view.

It is true that, with well -ordered economies, Europe's total need for subsidies

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will be less than it is at present or was before the war, assuming that conditions remain the same. But it will exist. The discrepancy between people and space will not be eliminated even with the most intensive cultivation and utilization of the land. The need for food subsidies is still the smallest.

However, it is considerable for foodstuffs and raw materials. One cannot extract more treasures from the soil than are hidden in it. Moreover, Europe is bound to its climate; it will never yield coffee and cocoa, tea and spices, tropical fruits, rubber and cotton. Continental Europe therefore needs a supplementary area, at least for the vital needs that cannot be met in the European area. This supplementary area cannot simply be the rest of the world. From the European point of view, wo rld trade as a whole lacks the attributes of security and stability. Here, the Near East and Africa come into the European focus. The Mediterranean Sea takes on a new role. In the future, it will no longer be the dividing line between continents, but the c onnecting link. The economically united and organized Europe will have to find its economic complement in the Near East and Africa, and these areas together will form one of the future large economic areas that are currently being shaped.

Today, we are wit nessing the division of the world into large economic areas.

This is not an arbitrary development thought up by anyone, say a National Socialist. This is the inevitable conclusion drawn from the development of population, the development of technology and the forgiveness of the world.

The ever-increasing number of people with no more spatial possibilities of escape, but a striving for constant increase in prosperity, forces the intensification of the utilization of space. Today, economic development is penetrating into the depths and no longer into the breadth. The useful coexistence is determined by the great nations. The prerequisite for the fulfillment of this task is the existence of firmly established and well -ordered national economies. Therefore, toda y we see the struggle for these and we see how old views of trade and economic policy, which stand in the way of the formation of such national economies, are being thrown overboard and new views are taking their place.

A large economic area does not mean a customs union, it does not mean the political merger of all states into one superstate, it does not mean the domination of one by the other. A large economic area means being dependent on one another, mutual utilization, neighborly support, development coordinated with capabilities and needs; above all, a large economic area means that there is no longer any room for exploitation, be it of an agricultural or raw material state by an industrial state, be it of a colonial state by a cultural state.

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We have thus identified the aspects that will determine Europe's foreign trade in the future. One part of this foreign trade is the trade of the European countries among themselves, another part is the trade going beyond that within the greater economic ar ea of Europe-Africa, a third part is the European overseas trade. The latter is the subject of the lecture you will hear today in 8 days. Overseas trade will therefore be touched upon by me only insofar as I have to deal with generally valid aspects within the framework of my task.

It will not surprise anyone who has followed my remarks if I now say that Europe's foreign trade policy objectives will result in almost revolutionary upheavals and shifts. For Germany, however, the future development will be no more than a continuation of that which began about nine years ago and which, incidentally, was not fundamentally changed by the war. If this had been the case, the development would have been misdirected. The aim was to build up a foreign trade that would be stable in times of crisis and war. On the contrary, as far as Germany is concerned, the war only accelerated the development that had begun. For those countries which have already maintained close foreign trade relations with Germany, such as the southeastern states of Europe, only the correctness of their basic attitude, which they have professed in recent years, will now be proven. And indeed, their foreign trade, which for the most part already in 1938 served almost 60% of the exchange of goods with Germany, has not been shaken by the war; indeed, it has continued in a straight line. In fact, it has experienced a straightforward continuation and, in part, considerable expansion. The changes will be all the more drastic for those countries which have h itherto been only slightly or at any rate not predominantly Europe -oriented in their foreign trade. This applies above all to the northern states and the western peripheral states. In the case of the northern states, for example, Germany's share of foreign trade sales was only 25 %. These states will have to make a fundamental change, which will have a major impact in terms of countries and goods.

It is of particular importance that Western Europe had a highly passive foreign trade balance. It was balanced by the asset item of the capital account, i.e. by the income from overseas capital ownership. To the extent that this income is no longer received in the future, Western Europe will be forced to restrict consumption, which can only be remedied by an increa se in exports, i.e. by more work. The other regions of Europe, i.e. the north and southeast, are in a more favorable position, since regional relocations will be sufficient for them to adapt to the changed conditions. However, this will not always be possi ble without accompanying crises.

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Some of the shifts in European foreign trade, which will take place within the greater economic area, will take place exclusively in the sphere of trade. If, for example, Romania used to supply mineral oil on a large scale to England, in the future it will be sold almost exclusively in continental Europe. Or if Denmark used to send its butter and bacon to England, in the future it will sell these goods in Germany and Belgium. But this very exampl e teaches that the reallocations will not remain confined to the sphere of trade. On the contrary, the structure of European foreign trade will in the future depend to a large extent on the changes that will take place in the production of the individual countries. The economic unity of continental Europe requires the planned orientation of the production of agricultural products and the extraction of mineral resources to the needs of all European countries. In the foreground are the subsidy needs of German y and Italy.

On the other hand, industrial production will also experience a general order according to very specific guidelines. In all this it will be essential that neither the industrialized countries, i.e. above all Germany, need to forego the development of all its agricultural production possibilities, nor the agricultural and raw material countries will be hindered in the reasonable industrialization of their areas. The interdependent areas will review their needs and their riches in mineral resourc es, production capacities and manpower and put them in orderly service to meet their needs. Mineral resources will be newly developed, new cultures will be planted, the labor force will be sensibly employed, in short, the economy of Europe will be develope d and unfolded in all parts on the basis of mutual commitment.

It cannot be the task of this presentation to show in detail which possibilities for European economic development exist in the individual countries, i.e. to prove that e.g. Serbia can increase its ore production and especially its copper production, Romania can grow more soybeans and breed more sheep, Hungary can produce more poppy seeds and more textile fibers, Sweden and Finland can supply more wood, Germany will produce more coal, Denmark mu st convert its agriculture from cattle breeding to grain farming, Bulgaria must cultivate tropical fruits, etc., etc. Each country and each product would have to be examined in detail, and these examinations are probably already being carried out today in authoritative places. I must ask you to allow me to make only a few general remarks on all these questions.

1 The agricultural Southeast has suffered from relative overpopulation for decades. The standard of living of the people of these areas is appallingly low. This situation forces the strongest intensification of agriculture and a certain industrialization. The task of intensifying agriculture fully meets Germany's needs if agriculture turns in particular

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to the expansion of high -yield crops, such as the cultivation of oil plants (soybeans, poppies, sunflowers, etc.), textile plants (hemp, cotton and flax), and livestock and fruit culture. Agriculture will also have to take advantage of Germany's technical and scientific progress for the purpose of increasing soil yields and reducing human input. At the end of this path there will be a yield that will make Europe almost independent of food supplies from overseas.

2 The industrialization of the agricultural and raw material areas must find its limit in the sales possibilities. Here local, continental and world economic possibilities are to be distinguished. Today, no one can deny the right of a country to build industries to satisfy local, i.e. territorial, needs. Thus, every country can be granted textile and shoe factories, furniture workshops, glassworks and other factories for the production of mass consumer goods. It would be foolish, on the other hand, to allow any area to produce, say, rolling mills or heavy current plants. The world demand for these plants is too small for any country to engage in their production. In addition, the technical, financial and commercial requirements for production are so high that they could not be met by all countries, especially the smaller ones, at the same time. Between the two extremes, the local demand and the world economic demand, there is an abundance of intermediate stages which can be suitably filled in adaptation to the abilities of the peoples and the peculiari ties of climate and soil. Here each country will be able to come into its own and thus gain an advantage.

3. the natural economic complement of Europe is Africa and the Near East. Africa is a completely undeveloped continent. With planned management and healthy use of the native labor force, this continent will be able to supply a large part of the European demand for colonial products. But simply by redirecting its exports, Africa can do much to satisfy continental European needs. In 1938, only 12% of to tal African exports went to Germany, while nearly 40% went to England and overseas. France was already involved with 35%. In a larger number of commodities, such as cocoa, vegetable oils and fats, wine, sisal, iron ores, rock phosphates, chrome ores, and g old, Africa was already exporting more before the war than the total subsidy requirements of continental Europe. And in many other commodities, exports amounted to more than 50% of European requirements. And the Near East also offers great opportunities wi thin the framework of a large -scale European economy. In 1938, the Near East supplied only 22% of its exports to Germany; almost as much went to England and about 35% to non-European areas,

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One thing must not be overlooked: The i ntegration of these vast Asian and African areas into the great European common economy requires time, human and capital investment. A little patience is therefore necessary to achieve the great goals set for economic policy here.

4 Large economic areas ar e basically self -sufficient, i.e. they can exist in themselves. Foreign trade among the territories of a metropolitan area can basically no longer be described as world trade; it has been nationalized, as it were. In contrast, trade among the major areas, whereby a major area does not necessarily have to appear as a trading partner but can certainly appear in its individual areas, represents the actual world trade of the future. It differs fundamentally from foreign trade, which I have called supply trade i n the supply area, i.e., in the large economic area. For world trade lacks one thing above all: it does not need to be secured in terms of power politics. It is, as it were, the peacetime phenomenon of foreign trade. As long as overseas trade was at the same time supply trade, it represented a constant danger of war.

It provided security only to those countries that controlled the sea routes. Only England, thanks to its fleet, could consider the whole world as its supply area. Germany practically did the sa me before 1914, but had to suffer the consequences during the war and later. The beautiful principle of freedom of the seas did not exist in reality. Nor could it exist. For it contradicted the need for security of every nation. Only when the struggle for the basic necessities of life has been eliminated from the sphere of world trade and only the exchange of dispensable, albeit desirable, goods is left to it, while the supply of the peoples with all necessary goods is ensured in their supply areas, only th en will it be possible to realize the principle of freedom of the seas.

Overseas trade will therefore have a different face in the future than it has had up to now. Its commodity structure will be different, as will its country structure. But this does not mean that its volume will be smaller than before. On the contrary, true world trade can only develop in an atmosphere of peace. To create this atmosphere of peace is the purpose of the reorganization of the world. Nations at peace, large economic areas at peace, supplied with everything that is necessary for life: that is the goal which the new principle of national foreign trade serves. And this condition is then the basis for the new world trade, the world trade of the future. There are then no longer an y limits to it, just as there are practically no limits to the needs of people and to production in industrial goods.

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5 One of the most prominent advantages of mutual trade is the certainty of sales. Sales w ill not be determined by a market that can be influenced somehow and somewhere and is subject to cyclical fluctuations, but by clearly defined needs. The obligations will be laid down in long -term contracts: on the one hand, obligations to cultivate, mine and supply, on the other hand, obligations to purchase. It is precisely in such contracts that the value of the new foreign trade principle is demonstrated. It gives foreign trade a stability on both sides that guarantees order and prosperity. The farmer c an cultivate his fields without worrying about the sale of his crops, the miner and industrial worker need no longer fear unemployment, the merchant and industrialist is no longer threatened by the dangers of speculation and economic cycles. Economic life is guided along the calm and solid paths of work and diligence, and the just reward is granted to the capable.

It may be that one or the other feels this condition as constricting. I have already said a few things about this issue and would like to add the following here.

From a purely economic point of view, the reciprocal From a purely economic point of view, the reciprocal linking of imports and exports cannot be perceived as a burden, an undesirable restriction of freedom of action, or even as a disadvantage. For the Romanian farmer, for example, it must be much more pleasant to be able to deliver his crops to Germany year after year at good and fixed prices on the basis of reciprocal foreign trade agreements than to have only the prospect, under the sign of a liberalistic economic system, of selling them on the world market, perhaps even at prices that are not known beforehand. The redistribution of foreign trade, i.e., the transfer of world market relations to the inner trading sphere of a large economic area, thus means not only steadiness of development, but it also gives each individual the security of his existence and thus actually establishes his full economic freedom. And this, because one more is added, namely finally.

The system of nation al foreign trade gives everyone the fundamental right to participate in the economic and social advancement of the entire economic area. There is no more room for exploitation of one by the other. This success is brought about by establishing just price relations between the exchanged products. If the farmer is to remain a farmer and the miner a miner, he must not be reduced to a second -class human being, to an object of exploitation. This applies abroad as well as at home. If, therefore, Germany, for examp le, attaches importance to

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being able to obtain certain vital goods steadily and permanently from other parts of the economic area, and if even the production of these parts is to be redirected to German needs, it must offer pri ces that make the work worthwhile, prices that make it seem advantageous to be in exchange with Germany. But not advantageous in the sense of the law of comparative costs, but in the sense of the right to the same standard of living for the same services, precisely the denial of the right to the same standard of living, i.e. the condemnation of a country to become a colony, i.e. to be exploited, that was one of the sinister postulates of the liberalist, i.e. English foreign trade system. Here it is not the world market that determines the price, but labor and the claim to social equality. The great shifts that must take place in the import and export of the European countries, if the economic needs of Europe are to be satisfied, are possible only if the pric e laws applicable in the large economic area allow the prices for the production then required to be determined fairly.

An important prerequisite for interstate interaction in the large economic area on an orderly complementary basis is, of course, the existence of fixed currencies that are in a firm and healthy relationship with each other. They make it possible to maintain fixed prices and, moreover, central clearing, which facilitates disbursements and, above all, allows multilateral settlement to be set up. For, of course, foreign trade cannot be balanced from country to country in a large economic area; on the other hand, the sum of the balances of payments in the large economic area can very well be in equilibrium, indeed it must be. If only bilater al settlement were permitted, this would represent a restriction which would not permit full utilization of existing trade capacities. In such a case, the possible production -related relocations of foreign trade would fail due to difficulties in offsetting ; however, this must no longer be the case in the future.

The six points discussed above also provide the framework within which the actual relocation of European foreign trade will take place. This is a great task. Decades will be necessary for its full s olution. The war, however, accelerates the reorganization extraordinarily. Above all, the war is creating a transport constraint that will give rise to transport facilities in the interest of the transfer that would not otherwise have been created so quickly. Of course, the reorganization of foreign trade is not only a trade process and production planning, but also a transportation problem. New transportation routes must be created, old ones expanded; the means of transportation must be adapted to the new

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trade relations. Railroads and inland waterways face particularly great challenges in this respect. But the immense power emanating from a united, planned, and uniformly managed large -scale economy will solv e these and all other tasks connected with the reorganization of foreign trade. And once the supply of Europe with essential goods has been ensured, the time will also have come to tackle the expansion of other foreign trade. For, of course, an extensive w orld trade can exist alongside the supply trade; only the supply trade must first be in order if world trade is to flourish.

Motorization and road construction problems in the large-scale economy From Prof. Dr. Karl Krüger

While in the liberal-capitalist economy the export pressure, whether of agricultural and mining enterprises, or of industrial towns and countries, forces the improvement of transport routes and means of transport, in the socialist state system the concern of the a uthorities for many decades for the common good, based on far -sighted economic-geographical and socio -political considerations, will make transport planning a reality, in order to facilitate the overall economic development. However, even in the pre -socialist period we can find numerous examples of transport constructions preceding the economy for strategic, administrative -political and even speculative -privateeconomic reasons, but it was rarely a conscious application of the principle to stimulate economi c performance increase through transport facilitation.

Large traffic constructions, for whatever reasons they were carried out, have however at all times and in all parts of the world proved to have special political and economic effects. Just think of the imperial road constructions of the Chinese emperors, the postal roads of the ancient Persian kings or the network of roads of the Roman Empire, which remained co -determining for the development of many regions up to the present time.

The North American example teaches us what a great political binding force traffic routes can have. It was not until the trappers and settlers of the eastern territories, under the leadership of the heroic Boone, advanced as far as the Mississippi-Missouri system, that most fo rmidable waterway system on earth, that further penetration into the Midwest could be facilitated by supply via inland waterways.

The later railroads-advanced along the East Coast as far as the Far West, partly to meet economic needs and partly to meet far -sighted speculation -allowed the consolidation of Anglo -Saxonism in all parts of the Union. The interaction between the revival of traffic on the railroads and the waterways of the Mississippi-Missouri made the Romanist positions in the southern states and further on the Pacific coast, which had been weakened since Napoleon's cession of Louisiana, completely insignificant, since the thrust of the young "Americanism," which was based entirely on the conservatism of Nordic Germanic immigrant spirit, was hardl y inhibited any longer by serious traffic obstacles. From this development one can conclude that without the connecting influences of the great waterways (including the inland waterways

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of the lakes and later the canals the construction of the railroads would have been delayed, and finally the Eastern states would hardly have merged with the Southern states and the West to form a political unity. It would be wrong to want to see in the North American area a "melting pot of races"; if we disregard the economically conditioned sociological tensions especially between East and West, it is nevertheless already unmistakable how "provincialisms" emerge in the language: the different ways of speaking of the New-Yorkers, the Louisiana farmers, the Wyoming settlers and the Californians reflect the idiosyncrasy of nature in the individual regions of America.

Indeed, voices have already been raised in America calling for better ties between East and West, for example, as a precautionary measure to counter the dangers of political disintegration in good time, although a road network of 5 million kilometers, 35 million motor vehicles and numerous airlines, in addition to the railroads, seem to ensure cohesion. If we take a closer look at the road network, however, we have to admit that in the immediate vicinity of the large cities the arterial roads are generously developed for the heaviest rush-hour traffic, but that the interurban roads do not usually deserve this designation in our European terms. Some "ocean to ocean highways" cast considerable doubt on their economic and political cohesiveness. It is of secondary importance that this pressure has been brought to bear most energetically by the representatives of touris m, since North America is the Eldorado of automobile tourists, which is most clearly illustrated by the fact that in the wheat country of Canada, tourism exceeds wheat production in value.

It must not be overlooked, however, that the economic expansionism of the U.S., which was so often described as imperialistic by the British, nevertheless sought to promote continental planning as far away as South America. Despite this, the U.S. sought to promote continental planning as far away as South America. At the Pan-American Conferences, after the railroad plans had been superseded, the project of the "Pan -American Highway" was constantly worked on from Alaska through Canada (which received loans for the extension), the USA, Mexico and the Central American states up to the Panama Canal, furthermore through South America to southern Chile on the one hand and over the Andes to Argentina -Brazil on the other hand. The purpose was to create an economic and political link by means of a road that could be used by motor vehicles - even if it could technically only be designed as a very simple earth road over long stretches. However bad the road may be, it helps to strengthen the feeling of togetherness between the two twin continents.

However, the road is by no means welcom ed by some South American circles, for whom it was a satisfaction, for example, that the Simon Bolivar Road from Venezuela through Colombia to Ecuador and Peru taps decisively into the

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Panamerican Highway, especially since the connection through the unhealthy and terrain-difficult Uraba to Panama was not prepared.

The political importance of motorway links was also recognized early on by England and France.

In the English trade press, it was always pointed out with satisfact ion when a section of the C-to-C, the Cape to Cairo Motor Road was improved. Here, too, however, it is generally only a more or less paved earth road, which on many sections cannot even be called an "all -weather road." Incidentally, the . "Great North Road" in the course of this Cape to Cairo road is the only section of road on which the Mandate authorities have done any appreciable work; on all other roads in the German East only piecemeal work has been supplied, which is far from being in accordance with the duties of the Mandate Government.

(It should be mentioned that the Belgians in the Congo area also engaged in "Cape Cairo planning," and Belgium's performance in colonial road construction proved superior to that of the English). On the whole, however, the Cape-Cairo Road, intended as a bonding agent for the British rim countries of the Indian Ocean, did not even come to fruition in terms of tourism, since the progress of construction was all too slow. Everywhere, the influence of the railroad circles, which, thanks to their capital power, are important in parliament and which, in constant concern for the railroads often planned and built for speculative commercial considerations, hover, as in the mother country, also in the Union of South Africa and in the protectorates and colonies, inhibited the construction projects of the road building authorities, which can only rarely be effectively supported by the motor vehicle owners and their associations.

France has made commendable transport achievements in N orth Africa, especially in modern road construction. The development of regular motor lines across the Sahara was encouraged by military circles, the best known being the connection from Algiers to Gao (Niger knee) and onward to the motor bus routes establ ished eastwest from Dakar to Lake Chad and the Congo, and others branching off from these lines southward to the coast. In the Sahara, however, these are only staked desert trails that are unpaved (Algiers-Dakar, Algiers-Niger, Algiers-Lake Chad) but have some gasoline stations. In French West Africa and French Central Africa, the improved earth road prevails, but now and then even has asphalt surfaces. Even if a large part of these roads and "autopaths" meet economic requirements, the trans Saharan connect ions are for the time being only important as political links between the mother country or North Africa and the West African possessions; this is supported by the air routes, which are more important economically,

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administratively and militarily than bus routes. Moreover, the construction of the Trans-Saharan Railway has now begun.

Metropolitan France has always been in the fortunate position of being able to easily establish transport links between all its territories and departments.

Above all, the connection of the rivers of France to each other by means of canal constructions was relatively easy and was tackled at an early stage.

Inland navigation will always play a very special role as the main carri er of regular and heavy freight traffic, especially in a country with not too long periods of icing. It is therefore no coincidence that in France, in particular, inland waterway transport is the main vehicle for the exchange of goods within the country. It is therefore no coincidence that in France inland navigation has helped to secure the exchange of goods within France and thus the economic and spiritual unity of the French countryside. Even if Charlemagne, who incidentally also ordered a canal connecti on between the Main (Rezat) and Danube. (Altmühl) in 793, had promoted the shipping and land road connections of his empire, the decisive development only started under the great Colbert. Canal construction plans were put into practice and country roads were built, some of which, by the way, were based on the old Roman constructions. The Routes Royales, which were built under Louis XIV and the following kings through the careful planning of the French "engineer geographers", already showed the way to Napole on, who saw in the development of the road networks not only military aids, but also the basis for the cohesion of the united Europe that he envisaged.

It is largely due to the development of inland waterways and land routes in France that inland traffic d eveloped in such a way that the drive to the sea remained low in the French. Despite individual particularistic phenomena, some of them linguistic, the French felt inwardly satiated in an almost self sufficient attachment, although they were often enough i ncited to imperialist expansion again and again by leading individual personalities. It was only later - since 1830 - that colonization across the Mediterranean began, which otherwise would have been so obvious (although individual expansion efforts in America, India, etc. can be called long before that).

But also in France we can recognize (however not so clearly as in England) that the economic way must first be fought for by the interested party; in the planning, however, military and administrative poin ts of view prevail, which are often generously brought to bear. In England, on the other hand, one is stuck in the tradition of straight Roman roads and narrow paths winding around the irregular boundary ridges and hedges of the private estates (which, however, are often excellently fortified). Road breakthroughs occurred only after long battles, a network of freeways remained on paper.

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In contrast to France, Germany has always suffered from the separating geographical obstacle s, especially its low mountain ranges. The rivers flow into the North Sea and the Baltic Sea without offering easy cross connections, which in themselves were only possible by sea. For a long time, land traffic was limited to the primeval river valleys, wh ile only lonely trade routes led to the waterways of the Danube system. Even though Germanic settlers of the same race populated the entire German area, a unifying national consciousness did not develop. Even the great trade and economic organizations of t he "German" Hanseatic League, with their refined and penetrating social and cultural effects, which were felt almost throughout Europe, were not able to overcome, at least economically, the geographically conditioned particularism of the German tribes. Des pite numerous political and intellectual efforts to create a unified Germany, all hope seemed to be in vain. When Friedrich List recognized the unifying means in the railroad and created the concept of a spatial economy underpinned by transport technology, he failed primarily because of the concerns of a tradition -bound Metternich and the timidity of small German princes. But technology, which step by step overcame all geographic obstacles with the railroad and the locomotive, proved to be more effective th an the provincial political spirit in the small states. The creative spirit of countless technically capable minds drove the construction of the railroad forward - cunning was forgotten, but it almost worked in its favor. And the railroad contributed decis ively to the fact that the German landscapes, which were otherwise connected only by meager country roads - though considerably improved since Napoleon - were brought closer together. If it was not possible to eliminate particularism, at least politically a German Empire was formed.

The productive power of the German lands developed to a surprising degree as a result of large -scale industrial processing, especially of iron and coal, so that new railroads were built all the time. Fortunately, the spirit of t he old Prussian tradition of order meant that concern for the common good was always so lively that, unlike in England, the transport route did not always have to be fought for tenaciously; the authorities often accommodated the wishes of industry generous ly, without first having to force the new rail route.

The enthusiasm for railroads was so great in Germany, however, that inland waterways were regarded as obsolete in wide circles. It is only a special merit of individual transport politicians that they n evertheless pushed for the construction of canals - especially the Mittellandkanal. For the regular transportation of heavy and extensive loads - one need only think of coal transports - the inland waterway is often more economical than the railroad, despite several months of icing. How beneficial an extension of the Mittelland Canal to the Oder or even an efficient Rhine -Main-Danube Canal would have

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been during the World War - apart from the fact that in pe acetime the constant water freights would also have revived political ties.

The superiority of the railroad, however, inhibited road construction in Germany for a long time to come. Certainly, before the World War, one could not predict the possible progre ss of motor transport - although far-sighted judgments had also been made. During the World War, the iron -tired traffic destroyed the existing road network, which had been designed for road trains, to such an extent that Germany, impoverished by Versailles , was unable to do more than patch up the roads for about a decade. It is highly creditable what individual construction officials accomplished as emergency work with the smallest of funds. But concerns soon arose as to whether the railroad would not suffer irreparable damage from the constant road improvements and, consequently, from the rapid increase in passenger cars and, above all, trucks.

As in other countries, the battle of "rail versus road" was waged quite vigorously, although in Germany the Reich Ministry of Transport tried to counterbalance the situation.

It was a redeeming act of the Fuehrer when he announced the planning of a network of almost 7000 km of Reich highways, the overall implementation of which was placed in the hands of a road constr uction expert, the General Inspector for German Roads Dr. Todt; the construction was initially the responsibility of a subsidiary of the Deutsche Reichsbahn, which on the one hand made use of the construction experience of the Reichsbahn engineers, and on the other hand induced the leading men of the railroad administration to think ahead in the interest of road traffic and thus to find the objectively most favorable balance between rail and road, especially since the Reichsbahn was even to operate Reichsba hn-owned motor lines on the Reichsautobahn .

The most significant aspect of t he Fuehrer's work, however, is, that the network of Reich highways - that is, the roads which, according to the present state of technology, are safest even for very high speeds, a nd which can accommodate an extraordinarily large number of motor vehicles without overcrowding - will be better suited than the railroads to bring the German tribes and landscapes closer together. At the same time, we must remember that the Fuehrer, by cr eating the People's Car, will make it possible for each individual German, as the owner of his own car, to make journeys to the near and distant districts, thus becoming acquainted with landscapes previously unknown to him and coming into close contact wit h all German tribes.

The Reichsautobahn, whose currently planned network length of over 20,000 km is certainly not yet a final figure, touches all German landscapes; furthermore, it reaches numerous places via short feeder roads that were previously far aw ay from the railroad. The connection to the country road

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network, which is also being expanded, is made by numerous access roads, which seems to guarantee the extensive use of the highways for pleasure, work and truck trips. The advantages of door -to-door traffic and factory -market traffic can be largely exploited.

In this respect, therefore, the unifying effect of the motor car is incomparably greater politically, socially and economically in the Reich than that of the railroad. We can say, then, that while the railroad has succeeded in overcoming the geographical obstacles, although the effect of the low mountain ranges on the routing remains very evident, this is achieved even more effectively by the autobahn - which, in consideration of the beauty of the landscape, is often deliberately routed through difficult terrain. In fact, it is only the autobahn, in conjunction with the rest of the country road network, that creates the prerequisite for the German tribes to feel that they are, in the long run, equal members of the greater German nation, closely and indissolubly united by modern traffic. The low travel and freight rates of the railroads have created far more favorable conditions in this respect than in the age of the st agecoach, but nevertheless the railroad will never be able to accomplish what the motor car - the Volkswagen and the delivery van - will achieve in peacetime.

Nevertheless, the railroad will retain its importance in passenger and freight transport, especia lly in the transport of heavy bulk cargo. It should be mentioned, however, that it is precisely the competitive threats posed by motor traffic that have led to important reorganizations. The acceleration of express and freight trains, thanks to the reinfor cement of the lines and not least to the use of motorized locomotives, has been pursued particularly vigorously in recent years.

The fact of the deepening of relations among the German tribes would in itself make the question of construction costs and the economic viability of highways and imperial roads seem almost irrelevant. But we can approach these problems all the more confidently because in a socialist state system the overall judgment need not be made according to the interests of individuals and in dividual groups, as would have been the case under the parliamentary system, but decisions are made for the benefit of the community for generations.

If we consider the operating costs of a car, which include not only fuel consumption but also rubber tires , lubricants, car wear and tear, etc., for the purpose of assessing the cost of transportation, these costs are in themselves reduced on level highways on which it is possible to drive at a uniform speed.

In individual cases, the costs appear to the car ow ner as economically justified (otherwise he would hardly keep a car), but in the aggregate the costs reach

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values behind which the construction costs of even costly highway routes appear low.

Just to illustrate these figures, let us assume that on only 20,000 km of Reich highways, 1,000 motor cars travel daily at each point - 500 cars daily in each direction is a very low average for peacetime - of which the single engine consumes an average of RM 6 to 18 pe r 100 km. Since the highways are calculated for many generations, we will only make a calculation for a century to illustrate the economic efficiency. If we use extremely low values for fuel consumption alone, the sum will be more than RM 40 billion; if we also include lubricant consumption and a proportion of the wear and tear on the cars, we may arrive at 120 billion, i.e. a multiple of the construction costs. If we could further take into account the values resulting from the revival of the economy through better road and traffic conditions, the counter -calculation of a high interest service (justifiable for traffic constructions per se only in a capitalist state system) would definitely justify the profitability of the most generous road construction. Ho wever, the profitability of the construction of the RAB. is also proven by an exact calculation of the annuity, which is adapted to the present time and is common practice. We can even conclude that any. We can even conclude that any state that advocates a constructive socialism (in contrast to inorganic destructive Marxism) naturally corresponding to its nationality can hardly be generous enough in the planning of economically and geographically reasonable traffic constructions that promote the production and circulation of goods (as well as the socio -politically desirable "tourism").

It should also be emphasized here that the organization of the planning and construction of the German Reichsautobahn, especially the almost scheduled cooperation of men and machines on the construction sites and thus the amazingly rapid progress in construction, which has never been achieved before, as well as the social care for the followers and many other things, are absolutely unique and unprecedented. Germany's construct ion achievements will continue to stimulate the other countries of Europe to follow the German example; indeed, we can follow numerous foreign plans of the same kind.

Germany was well aware of its central position in the heart of Europe and, in its planning of the Reichsautobahn, took into account the possibilities for connections to the west and east, to the north and south.

However, the great example of the Duce's motorways should not be forgotten, nor should the fact that the Alliance Internationale de T ourisme and the Association Internationale des Automobile -Clubs Reconnus attempted to plan a European network of freeways, of which Highway 1 was eagerly promoted for construction by the neighboring states of Belgium, Germany, Austria,

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Hungary, Yugoslavia, Romania (branch to Bucharest -Constanza), Bulgaria and Turkey under the keyword London -Istanbul.

It should be mentioned here that the English press, with regard to the political importance of international traffic constructi ons, propagated this London Istanbul road with its future connections to Cairo -Cape and Haifa-India!

In the dawning age of the large -scale economy, in which the national economies striving for military self -sufficiency seek to unite in accordance with the natural large-scale areas of the earth, continental planning becomes particularly important. Since the world economy collapsed with its principle of division of labor among peoples, the union of national economies for the development of large -scale economies, whose production of goods, sales of goods, monetary system, etc. is coordinated in a planned manner so that a high degree of crisis resistance is achieved (which was constantly prevented by nomadic capital in the world economy of the old order), seems quite natural and justified. The exchange of goods of the large economic areas would then result in a world economy of new order again of high crisis resistance.

The cooperation of the national economies in a large -scale economy would be all the more succe ssful, the more far -sighted and economic-geographically prudent transport planning would be realized, which must be regarded as the prerequisite of every economic intensification, but the transport constructions would also be carried out all the more energ etically, the more the governments would be imbued with the sense of responsibility of a natural socialism.

The progress of these constructive socialisms, especially in Europe, guarantees that Europe, which continues to claim the African continent as its complementary area, will in the future decisively apply the principles of socialist authority colonization, which will be exemplary in the German and Italian possessions and thus prove their superiority over liberalist -capitalist exploitation colonization.

This point of view will logically be expressed precisely in a generous traffic planning, which unquestionably does not need to be constricted by colonial borders, but will assume continental proportions. Incidentally, Germany in particular can note with sa tisfaction that even in the pre -war period its old colonial officials carried out transport planning on a broad scale according to the interests of the common good of the colonies concerned.

The importance that the motor vehicle has gained even in undevelo ped areas will bring road construction to the forefront in Africa as well, as already evidenced by Italian authoritarian colonization in Libya and East Africa / ^ .

Undoubtedly, modern transcontinental roads will soon

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will also cross the black continent, be it from the Mediterranean southward or from the Indies to the Atlantic, only that their technical state of development will surpass the previous "models" already mentioned.

In addition to road planning, the development of the Binneri waterways as carriers of intensified large -scale economy will deserve special attention. We mentioned that in Germany progress in the development of inland waterways has been slow. However, in National Socialist Germany, a ch ange occurred here as well, which also did not remain without repercussions on the neighboring countries. Regulation and canalization work has been vigorously undertaken, in line also with numerous new canal constructions. The previous small capacities, wh ich very often only allowed the traffic of 200 -ton barges, are gradually being increased, even if it is not always possible to meet the ship size of 1350 tons as on the Rhine and the large canals. The cooperation of the European peoples will benefit above all from the improvements in traffic that will be achieved by the creation of a large efficient inland waterway system that will lead from the French Atlantic and Mediterranean coasts across the Rhine on the one hand to the Mittellandkanal across the Weser , Elbe, Oder eastward and will create connections with the eastern waterways that are being eagerly developed, and on the other hand will lead from both the Rhine Main and Lake Constance to the Danube system, which in turn will obtain connections with the Elbe, Oder and Vistula and thus also with the eastern European network. The difficulties of the Danube expansion will be overcome.

Now, it should be borne in mind that the introduction of special types of vessels with weaker bow and stern shafts can promot e the motorization of inland shipping, which will considerably increase the performance of the vessels. Also, the development of seaworthy inland vessels is by no means complete, which in many cases can make transhipment at coastal locations superfluous.

In view of the expected increase in motorized rail, road and inland waterway traffic, which will continue to be accompanied by a logical increase in maritime traffic, it is legitimate to ask whether Europe will be able to provide the necessary quantities o f fuel and lubricants year after year. The answer may well be in the affirmative. The increase in oil yields from the oil fields of Central and Eastern Europe is to be expected; there are no limits to the extraction of fuels from coal in view of the rich G erman deposits of lignite and hard coal; furthermore, numerous oil shale deposits await exploitation; furthermore, the extraction of hydrocarbons from plants, especially in the African complementary region, is not difficult to accomplish; in Africa, which - for the time being - is still considered to be poor in petroleum.

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Africa, which - for the time being - still has to be considered poor in petroleum, the wood gas generator will play an even more important role than in Europ e.

The cooperation of the European national economies, in the European -African continental planning, will not let fear a shortage of the fuels and lubricants, particularly since the "continental world economy "1) will permit the additional purchase of petr oleum products from other economic continents.

Nevertheless, it must be taken into account that the continental development work underway in East Asia under Japanese leadership, as well as the beginnings of large -scale economic intensification in South Ame rica and India, will increase the demand for fuels throughout the world. We can expect particularly lively motorization in the eastern region and its Siberian complementary area. But the more intensive the overall economy of the world's metropolitan areas will become, the more gratifying will be the repercussions on the mechanization of the individual metropolitan economies.

Everywhere it is recognized that transport planning goes hand in hand with economic expansion, if not ahead of it. The stronger the mo torization, the more intensive the exchange of goods - but the "extent" of motorization is not yet limited anywhere.

1) Th i s t er m wa s ap t ly c oin ed b y Dr. E . S tar itz ; c f. t h e au th o r 's E con o mi c Con t in en ta li s m in "Ru n d sch . D . T ech n ik ", 3. 7. 19 3 9

THE TRANSPORT CARRIERS OF GREATER GERMANY FACE NEW TASKS IN THE EUROPEAN LARGE-SCALE ECONOMY From Dr. Walter Schmidt

Chapter 1 Introduction

It is the fate of our generation to be placed in the midst of an unheard -of turning point in history - and in the life of nations, and under the thunder of the guns, which has now filled the world and all our hearts for more than a year and a day, we are almost in danger of forgetting that the world events of our time also set us German people and all the other pe oples of Europe tasks of immense importance beyond the warlike conflicts."

The world-historical events of the last four years - the annexation of Austria and the annexation of the Sudetengau to the German Reich, the emergence of an independent Slovak state , the establishment of the Protectorate of Bohemia and Moravia, the return of the Memelland, and then, as a result of brilliant German feats of arms, the fall of Poland with the reintegration of old German settlement lands into the German Reich, the reinco rporation of Lorraine and Luxembourg, Alsace, the districts of Eupen and Malmedy, and the liberation of Lower Styria and southern Carinthia from the Serbian yoke, - all of these fundamentally reshaped the face of the map of Europe. Included in the Greater German sphere of power is also the Generalgouvernement . whose name since the middle of 1940 no longer bears the addition: "for the occupied Polish territories". Although it is not a direct member of the Reich, it is for all times under German leadership a nd administration and has become a part of the German living space.

The arbitration decision of the Axis Powers on the cession of territory from Romania to Hungary, the transfer of further Romanian territories to Bulgaria, the disintegration of Yugoslavia and Greece are also of political and economic significance for the life of our continent and thus also of our German people.

However, the economic and political consequences of the unheard -of event, of which we are all witnesses and co -creators, of the col lapse of the Soviet Union under the blows of the German sword, are still completely unforeseeable. The hour of the birth of the Greater German Reich has struck.

But fate has decided that the German people will have to fight for a natural

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and in the dynamics of world events unstoppable development again as so often in its history with blood and iron.

Major political events inevitably assign new tasks of immense significance to the economy. If the means of transport have to keep t he blood circulation of the economy going, then the transport companies of Greater Germany, especially the German Reichsbahn, must have been confronted with tasks of enormous proportions as a result of this reshaping of the map of Europe. Their solution is undoubtedly one of the most important prerequisites for the economic security of the German living space and thus for the existence of the Greater German Reich.

But here also lies one of the starting points for that of the economy in the European area, wh ich we are striving for from the basis of our National Socialist economic conception. The German people did not draw the sword to force any more or less significant border adjustments. In this war, it is fighting above all for the creation of the political foundations for the planned unification of the national economies of Europe into a continental economic community in which the peoples of Central and Eastern Europe, dependent on each other for the same necessities of life and now freed from the economic tutelage of a world trade policy decisively shaped by British interests, will be able to enjoy the benefits of a common market economy. This objective, however, has also created a new economic community in which the peoples of Central and Eastern Europe, d ependent on each other for the same necessities of life and now freed from the economic tutelage of a world trade policy decisively shaped by British interests, complement each other with all the forces of their soil and their people and come to each other 's aid in order to give themselves new opportunities for development through increased cooperation. This objective, however, has also given birth to a new European transport structure. Out of the same geo -political destiny, the peoples of Central and Easte rn Europe are developing a new transport circuit, which is called upon to lead Europe out of the confusion of the hitherto liberalistic transport economy.

And so we pick out the new Central European idea of transport from the wealth of driving forces and objectives of this world event and let our eyes wander over the variety of ever new transport tasks which the flutter of world history has set our major transport carriers in recent years, especially the railroads, but also inland and maritime shipping.

Since airplane and motor vehicle find the emphasis of their activity away from the interstate and the bulk traffic we will be allowed to eliminate them at this discussion. But after two other pages, the limitation of the topic should be made clear. It is als o not the purpose of this review to describe the magnitude

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of the organizational achievements that have inevitably arisen again and again in the course of historical events, especially for the Reichsbahn. The re peated deployment of our mighty German Wehrmacht, the diversity of the newly annexed rail networks, the fact that their entire layout was geared to purposes that were now obsolete, the destruction of the railroads in the theaters of war in the East, North and West, etc., the evacuation and repatriation trains for our comrades in West Germany, the resettlement of millions of ethnic Germans from the East and Southeast of Europe, the war -related transport tasks for coal and oil alone, the Wehrmacht and workers ' holiday traffic have placed demands on the German railroads that have probably never been placed on a railroad administration in the hundred -year history of the railroad system. However, there is not enough space here to discuss them in detail.

The purely domestic German wartime transport tasks of the Deutsche Reichsbahn will also remain basically undiscussed here. Instead, we will focus only on the enormous new tasks that have fallen to the major German carriers, as often as new traffic flows have sought new routes with the expansion of Germany's political border.

Before we now consider the development of these new transport tasks, following the historical sequence of events, it is useful to take a look at the general transport situation of Greater German y, which was only made clearer by the necessities of war. general transport situation of Greater Germany.

Thanks to its location in the heart of Europe, Germany has a vast hinterland extending almost to the far East, and its transport links with Germany ar e quite predominantly overland. The almost complete elimination of overseas shipping due to the war. The almost complete elimination of overseas shipping caused by the war has therefore considerably expanded the tasks and economic possibilities of intracon tinental land transportation. Railroads and inland waterways are faced with previously unknown new tasks.

This change in traffic flows may initially be a direct consequence of the war situation, but the planned increase in the exchange of goods between Germany and the countries of southeastern and eastern Europe is nevertheless part of a generous economic and transportation plan that was consciously initiated before the outbreak of the war and calculated for the long term. The exchange of large flows of goo ds between Germany and these countries is not merely a makeshift measure with a lifespan limited to the war, but by its very nature a continuous phenomenon, which can therefore constantly stimulate the existing transport routes in the long term, and will a lso justify the development of new transport routes. The planned development of the Danube and its planned connection to the German power grid. The planned expansion of the Danube and its planned connection to the German power grid

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through canals to the Rhine, the Elbe and the Oder indicate the great direction in which these plans have been moving for years.

It is clear that the foreign policy developments of the years 1938/39, which greatly elevated Germany's position in the Danube region, must have given these efforts the strongest possible impetus. However, the Danube's capacity is limited by natural forces - rapids, high and low water, ice - and will always remain limited. In December 1939, the Paris newspaper "L'Intransige ant" described the unreliability of the Danube as a decisive factor for the war prospects of our enemies and hailed the Danube ice as a "new ally of France" whose arrival was more important than a battle won. The French general staff will probably not have estimated the value of this ally quite so highly. He will also have remembered that during the World War the German field railroad chief, in cooperation with the K. K. Zentraltransportleitung, for example, succeeded in supplying the Central Powers with 1% million tons of food and fodder via the Danube alone within a few months after the bad harvest of 1915. After all, Danube traffic is subject to obstructions due to ice, high water or low water. In addition, the connection of the Danube to the rest of the German power grid has not yet been completed at any point, nor will it be possible to do so within the next few years. Thus, the main burden of this development will undoubtedly fall, at least for years to come, on the German railroads, in whose network a large part of the new traffic flows in both directions will have to flow together, regardless of whether they move beyond our borders by rail or on the Danube.

That German energy - as it was a quarter of a century ago during the World War - will succeed again this time in increasing the efficiency of Danube navigation from month to month is all the less doubtful since Germany's position as a Danube riparian state and its influence on the Danube shipping companies are much stronger today than they were durin g the World War. As far as the railroads are concerned, it goes without saying that the smooth handling of these enormous new tasks will require a comprehensive renewal and expansion of the rolling stock and, at countless points in the network more or less visible to the public - an extension of the railroads and the facilities in the operational hot spots of the network, especially since the shortage of men and iron has forced the Reichsbahn to exercise excessive restraint in this respect for years. Howe ver, the decisive prerequisites and means for solving these new transportation tasks will be found less in a far reaching expansion program for the railroads of Germany and the European metropolitan area than in the planned use of the existing apparatus, e specially in a purposeful handling of the railroad tariff policy. The reorganization of the map of Europe has completely changed the basis for railroad tariff policy,

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which is faced with the task of facilitating the increased exchange of goods in the European economic area by making transports cheaper and simplifying the tariff system, and of distributing it among the various available modes of transport in accordance with the law of expediency. After all, not on ly the sales radius and sometimes even the marketability of a product depends on the amount of rail freight, but also decisively on the shippers' inclination to include inland and sea shipping in the transport service where there is a choice of several routes.

With each expansion of the borders of Greater Germany, however, a highly developed, diversely structured economic region has been torn out of all its economic interconnections, which have grown for at least decades, and inserted into the great German economic body; The political decision to take power would inevitably have led to serious economic upheavals, as we were able to experience firsthand in East and West Upper Silesia after the World War, if the Reich government had not endeavored to prevent o r at least dampen such upheavals by means of a well -planned economic policy.

Unfortunately, the two most obvious means to this end, the customs tariff and currency equalization, were only ever available for a limited period of time, in order to prevent, at least during a short transitional period, the sellout or downward competition of the newly acquired economic area. Their long -term application would not have been compatible with the endeavor to integrate the new parts of the Reich into the Greater German Reich as quickly as possible. In many cases, territorial protection agreements within certain economic sectors also proved impossible or inappropriate. Thus, in order to balance the competitive situation between the old German economy and the economy of the new territories, the railroad tariff policy had a variety of important tasks to perform, just as, even in peacetime, the railroad tariff policy is always one of the most indispensable and effective instruments of a planned governmental economic control in an economy oriented toward public economic interests.

However, the use of railroad tariff measures to bring the newly acquired territories into economic alignment with the Old Reich took place under completely different economic conditions. First of all , the conversion rate of the Reichsmark to the previous territorial currency (Austrian schilling, Czech koruna, lit, zloty, etc.), which was set by the Reich within the framework of its general economic policy objectives, played a significant role. In addi tion, the Reichsbahn repeatedly encountered a tariff system in the newly incorporated parts of the country that was fundamentally different from its own, and a tariff level, i.e., an average freight rate that was either higher than in the old Reich, as in Austria, or lower on average, as in Czechoslovakia, the Memel region and Poland. This initially resulted in the need for numerous rail tariff measures,

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limited to a certain transitional period, for both passenger and freight tra ffic.

They were all aimed at helping the economy of the annexed territory to adjust to changed "wage and price conditions, to new procurement and sales areas, and at the same time to accelerate its integration into the old Reich to the extent politically a nd economically desirable in each case. For all the new territories, however, the sharply declining scale of the Reichsbahn tariff over the long distances had a beneficial effect in terms of tariffs, as a result of their border location, which greatly faci litated the process of economic integration.

Furthermore, these areas were basically included in the scope of the general exemption tariffs existing in the old Reich and, in accordance with the needs of their economy, were soon also provided with their own exemption tariffs for the purchase of certain raw materials and the sale of certain products. On the other hand, the disappearance of certain competitive channels resulting from political events has also brought about a major upheaval in interstate competitive relations and rendered superfluous many tariff reductions granted by the Reichsbahn in its own interest or for the benefit of German seaports. But just like the economy itself, railroad tariff policy, which serves it in a planned manner, is in a cons tant state of development, and for this reason new tasks are constantly emerging on the horizon of political events.

Thus, a quite varied picture of transport policy tasks is revealed to us if we let the development of the Greater German Reich in the last 4 years pass by our mind's eye from the perspective of its major transport carriers.

Chapter 2 The annexation of Austria

L'Anschluss c'est la guerre, had been proclaimed to the world for 20 years by the , Versailles enemy alliance states. If, nevertheles s, none of them made any attempt to stop the development when, in March 1938, with the annexation of Austria to the Greater German Reich, this dream of the best of the German nation was realized in one fell swoop, the world at that time probably owed it decisively to Mussolini's clear approving attitude.

In this hour, the Berlin -Rome axis passed its first acid test, and the transport expert will remember with particular pleasure in this connection that Italy, with its consent, also subordinated its own rath er serious transport policy interests to a larger world political idea.

Trieste, the seaport of the Austro -Hungarian Danube Monarchy, which collapsed in 1918, was deprived of the state connection with its natural

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hinterland by the peace treaties of Trianon and St. Germain, and fought a hard battle for its existence within the Italian state. However, it counted the Austrian provinces among its most important, long -established catchment areas.

As far as exports fro m the Ostmark via the port of Trieste are concerned, there has indeed been a quite considerable decline after the annexation, which, by the way, is in no way due to an exodus via other export routes or even to a decline in production, but which, according to the transport statistics, is explained solely by increased domestic sales. Its main focus is on the export of wood, but also on the Triestine export of magnesite, paper, cellulose and iron goods from the Austrian provinces, which used to be very importa nt in terms of volume. On the other hand, imports via Trieste to the former Austrian traffic districts have developed quite favorably even after the annexation.

The decline in exports, however, as well as the enormous increase in imports via Trieste, clear ly shows the economic blessing that Austria has experienced from the annexation to the Reich. Undoubtedly, in the long run, the port of Trieste will also benefit from this economic development of the Austrian area and, in the course of this development, it will be able to easily cope with the decrease in traffic that will result from the structurally conditioned detour of important traffic flows to the Greater German domestic market.

Immediately after the reorganization of state law, German -Italian government and railroad negotiations began with the aim of balancing all these interests by means of appropriate railroad tariff measures, and such an exchange of opinions is also constantly envisaged for the future. It is taking place within the framework of the so-called "Zweckverbandes", to which all Central European railroad administrations that are involved in an appropriate distribution of traffic between the German and Adriatic seaports as initial, final or through railroads joined together soon afte r the World War. We will have to deal with this institution in more detail later.

The example of the completely changed sales conditions . of Austrian timber production also shows - one for many - the tremendous new tasks that have fallen to the Deutsche R eichsbahn as a result of the Anschluss. This applies to almost all branches of economic life. In this context, let us only recall the development of the iron ore deposits in Eastern Moravia for the large German iron and steel production and the resulting e xchange of ores, coke and iron and steel products, which owes its birth to the effective favoring by the exceptional tariff 24 B 31 of the German Reichsbahn.

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Even outsiders can easily appreciate the difficulty of this task. Bef ore the annexation, the exchange of goods between the Ostmark and the old Reich was only weakly developed in many sectors of the economy.

In Kufstein and Salzburg, in Lindau -Reutin and in Passau, high customs barriers had made the exchange of goods between the two countries difficult until then, and the railroad facilities on both sides of the now fallen border as well as the transshipment facilities of the upper Danube ports were initially quite inadequate for the new traffic flows.

Of course, the annexati on of Austria to the Greater German Reich made the supply of coal to the former federal states much easier; Austria had been largely dependent on coal imports from German, political and Czech mines and thus had been exposed to a rather uncomfortable burden on its foreign exchange budget. Now, Polish supplies could be largely curtailed and transferred to the other major suppliers on the Ruhr and Saar and in the two, Silesian coalfields. But this also meant that the Reichsbahn, and to a certain extent the Danube as well, had to handle considerable additional transports, especially since the transport route for Silesian coal was now determined only according to purely all -German interests. At that time, however, this meant in particular that the Czech railroads were excluded from these transit transports, which were geographically assigned to them. The additional 855 km via the Reichsbahn lines in Saxony and Bavaria was a rather inconvenient additional burden for the Reichsbahn, especially in view of its enormou s transport tasks for the Westwall and the Uhrerbauten, and, by the way, also a very bad business deal, because it could not, of course, be more expensive than the much shorter route through Czechoslovakia, but it helped the German economy to save consider able foreign currency at the expense of the Czechoslovak state finances.

The dissolution of Czechoslovakia then reassigned the coal from all Silesian coalfields to the natural shortest route via Lundenburg. Since freight was now calculated according to the cheap German long-distance freight rates, eliminating the Czech tariff, Polish, Sudeten and Old Kingdom coal suddenly became much cheaper in Austria than ever before, Ruhr coal, for example, by RM 1.17 per ton. Although this was very pleasant for the coal -consuming Austrian economy as a whole, the Austrian coalfields were suddenly no longer able to sell their production on the Austrian market, since their ex -works prices would have had to fall by as much as the other coalfields were able to reduce their prices as a result of freight savings. We have here a quite obvious example of 'the fact, hardly appreciated in public, that a freight reduction is by no means always and for all concerned a blessing! Here, too, help could only come from the Reichsbahn. It g ranted the coal mined in the East German

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mines a particularly cheap local tariff for a radius of 350 km in its very own sales area, which more or less compensated for the freight advantage of the other coalfield s. Years ago, the Saxon coal industry was the first German coal mining region to receive the same concession, and Zwickau and Lugau -Oelsnitz coal would have long since disappeared from the market without the even more favorable local tariff granted by the Reichsbahn.

The question of coal supp ly to our Ostmark also contains i ncidentally, in another respect it is also a transport problem which only the expansion of the German borders in the East has allowed to mature. Up to now, as the Upper Silesian mining industry has now stated, the Ostmark has obtained only 300,000 tons from western Upper Silesia, while 800,000 tons have come from Polish and 800,000 tons from Ruhr or Saar mines. It is understandable that from the point of view of its sales interests, the S ilesian coal industry would like to see the Ruhr and Saar supplies transferred as far as possible to Silesian mines, which are 6 -700 km closer to the main consumption center in Vienna.

The Deutsche Reichsbahn will hardly be able to intervene in this compet ition between the coalfields by means of tariff measures, but will have to leave the regulation to the Reich Coal Commissioner, especially since West German coal to Vienna is naturally a much sought -after valley freight on the Danube and for certain purpos es, e.g. as metallurgical coke, cannot be fully replaced by Silesian coal in terms of type.

The redrawing of the map of Europe, however, has given rise to major new tasks, especially for Danube shipping, in the servicing of Central European traffic, and this has opened up unimagined possibilities for Vienna as a port for Danube transshipment. First of all, we may mention here an economic planning for the long term, in which the railroad tariff policy will probably also have to be involved to a large extent.

For the scheduled exchange of goods between Greater Germany and Southeastern Europe in both directions, Vienna is the transshipment and refining center pre -conditioned by nature. Before the incorporation of the Ostmark into the Greater German Empire, Germ any obtained most of its raw materials from the southeastern states by sea because of the cheaper freight.

Today, and also for the future, the importance of the Danube and the direct rail route has increased enormously. For this reason, Viennese business c ircles are now pointing out the role that Hamburg has played in German imports and exports not only as a port of transshipment, but above all as a trading and stacking center and as the seat of enormous processing industries for raw materials imported by s ea, and they see Vienna itself as being called to a similar position in trade with the southeastern states in the future - "Vienna, the Hamburg of the southeast", "Vienna, the leading trading city of the center

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of Europe! If it is possible to set up suitable processing plants in Vienna for the original agricultural products imported from the southeast, e.g. If suitable processing plants can be set up in Vienna for the original agricultural products imported from the southeast, e. g., mills and pressing plants for oilseeds, plants for the bleaching of nuts, the cleaning and bagging of legumes, slaughterhouses, bacon and meat canning factories, and then the imported goods from the Danube basin can be forwarded from here as semi -finished or finished products to all parts of the Greater German Reich, then it is hoped that such a development will lead to a reduction in volume and a reduction in freight costs, both for the direct rail route and for transportation via the Danube. This trad e route could then also be considered for imports from Russia and offer the same advantages. If these plans come to fruition, the Deutsche Reichsbahn, and next to it the Danube shipping company, will probably be approached with the wish to promote the crea tion of processing industries in the Vienna Basin by means of an appropriate acceptance tariff policy.

In order to conclude the consideration of the development of transport policy in the Ostmark for the time being, a short obituary should also be dedicate d to the Austro-German railroad war, which has now finally been laid to rest with the integration of the Austrian Federal Railways into the network of the German Reichsbahn. From the point of view of its own financial interests, the Deutsche Reichsbahn cou ld not have cared in the past whether it handed over its transports at the border to the neighboring Austrian Federal Railways or to the Danube. The same applied in the opposite direction, of course; Passau and Regensburg were, so to speak, the Black Sea p orts of Germany, and Bayerischer Lloyd on the Danube was the long arm of Deutsche Reichsbahn and our German seaports to the southeast. Thus, the Reichsbahn largely included the Danube in the traffic of Central and Southeastern Europe with Germany and overseas by means of freight -advantageous access and dispatch tariffs for Regen sburg and Passau. The Austrian Federal Railways, however, saw this as a measure that deprived them of considerable transports in traffic with Austria itself and, above all, with countries beyond; although this was certainly not the purpose, it was in any ca se one of the effects of our Danube tariff policy. But Austria had a quite considerable trump card in its hands: the Austrian Federal Railways were able to effectively divert east -west transports, especially to and from Switzerland, France and Belgium, fro m the shorter routes leading over the Reichsbahn lines, and thus to stimulate their federal railroad finances, by granting considerable advantages to the long Arlberg route, which was advancing far to the west. Today, the Danube and the Arlberg are German transport routes, and their role in the competition between the two neighboring railroads belongs to a past that is near and yet almost

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forgotten in the consciousness of our people. The past was not yet known to a Greater Germany.

Chapter 3 The Disintegration of Czecho -Slovakia

Even before the work of building up transport policy in the Ostmark, or at least the operational and transport measures of the Deutsche Reichsbahn for the integration of the East-Moravian railroad network, had reached even a provisional conclusion, German soldier's boots marched in from north and south, from east and west across the borders of the Benesch state, which had been broken from within by the curse of its Versailles purpose, and liberated the Sudetengau and South Moravia from twenty years of foreign rule.

This development, however, also confronted the carriers of Greater Germany with a host of new tasks.

In the Bohemian -Moravian area, the main line of the railroad net work was originally in the north -south direction. All major railroad lines led to Vienna as the capital of the Austro -Hungarian Danube Monarchy. The Czech state, on the other hand, favored the east -west direction for foreign policy reasons. It was important for it to have the closest possible ties with the Gill Entente, i.e. with Romania and southern Slavia, and then with the Soviet Union and France.

He thus favored the development of railroads in southern Bohemia and Moravia and the great east -west connect ion through Slovakia. The railroads in the Sudetengau, on the other hand, were not of interest to him, although it was precisely there that the most highly developed industry and commercial economy of his entire national territory was located. Although the German Reich became by far his most important foreign trade partner due to geopolitical constraints, and remained so despite all political obstacles, the railroad network of the Sudeten German peripheral areas was geared solely to the political needs of t he Benesch state.

The new border that the Munich agreements drew through the Bohemian Moravian area now cut through an economic area that had hitherto been held together by tariff walls, whose parts falling to Germany were now suddenly cut off from their previous supply and sales areas and had to adapt to the completely different conditions of the old empire with their raw materials and their finished products.

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But also for many industries of the old Reich, the annexation of Austria and now again the annexation of the Sudetenland brought about a far -reaching restructuring of their raw material supplies or their competitive relations on domestic and foreign markets. In order to prevent or facilitate this shift, the opposing interest groups naturally appealed first and foremost to the railroad tariff.

If German kaolin and German clay had previously enjoyed special exceptional tariffs in order to be able to hold their own on the domestic market against higher-quality kaolins and clays from Bohemia, to take just two examples, these tariff policy advantages basically lost their meaning after the Bohemian kaolin and clay mines had largely fallen to Germany. On the other hand On the other hand, the old German raw materials now cried ou t all the louder for rail tariff protection, as they saw themselves even more endangered by Bohemian competition now that customs duties and foreign exchange restrictions had been abolished Nevertheless, after weighing the pros and cons and in agreement wi th the responsible economic group, these tariffs were now abolished.

The annexation of the Sudetenland and also of the Elbe gave rise to completely new tasks and possibilities as a means of transport in the greater German area.

Formerly an internationalize d river, whose shipping, even when it sailed under the German flag, was strongly tied to foreign capital, the Elbe now became a purely German river from its source to its mouth. In terms of water management and transport policy, especially after the establ ishment of the Protectorate of Bohemia and Moravia, the river was placed under full German influence and could now be made available for the newly flourishing traffic between the Sudetengau and the Old Kingdom. This change did not leave the tariff policy of the Deutsche Reichsbahn unscathed. Until now, the Reichsbahn had refused, with good reasons, to pay the Hamburg The annexation of the Sudetenland and also of the Elbe gave rise to completely new tasks and possibilities as a means of transport in the grea ter German area.

Formerly an internationalized river, whose shipping, even when it sailed under the German flag, was strongly tied to foreign capital, the Elbe now became a purely German river from its source to its mouth. In terms of water management and transport policy, especially after the establishment of the Protectorate of Bohemia and Moravia, the river was placed under full German influence and could now be made available for the newly flourishing traffic between the Sudetengau and the Old Kingdom. This change did not leave the tariff policy of the Deutsche Reichsbahn unscathed. Until now, the Reichsbahn had, with good reason, refused to hand over Hamburg seaport traffic, which it had always maintained with cheap export and import tariffs on the pure ly

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railroad route - especially in the interest of the strongly export -oriented Saxon industry - to a greater extent to the Elbe shipping industry by means of reduced feeder freight and, be it for inland German o r overseas traffic, the Elbe handling tariffs from the time of the Prussian-Saxon the time of the Prussian -Saxon Railroad War. Now, however, the Reichsbahn did not ignore the necessity of abandoning this principle for the Elbe transshipment points in the S udetengau. Certain branches of industry, particularly dependent on the waterway, received reduced -price inbound or outbound cargoes to and from Elbe ports for their raw material supplies or the sale of their products in the Old Kingdom and overseas, e.g. f or kaolin and clay, iron pipes, glass and porcelain goods, etc. In addition, the Elbe River can expect a great increase in traffic from an understanding cooperation between the Reichsbahn and inland shipping. Even if the interested parties in the valley traffic still believe that there are considerable opportunities for the sale of Bohemian lignite in northern Germany, they should take into account the price pressure of the East Elbe lignite, the Silesian coalfields and the Ruhr coal, which also competes fa vorably in terms of freight via the Mittelland Canal, for the time after the return of normal conditions. In addition, however, the generous local utilization of coal in the Sudetengau itself, which is in the process of being expanded, will also lead to a very extensive additional utilization of the production capacity of Bohemian lignite.

The rail freight discounts granted to the Elbe transshipment points soon prompted the Oderschifffahrt to demand the same benefits for transshipments to and from the Oder. They justified their demand by claiming that this shift in the freight situation had damaged their interests in the Sudetengau and the Protectorate. Here again we see an example of how much consideration railroad tariff policy must take into account the m anifold interdependencies of economic life.

From the point of view of transport policy, one of the most obvious consequences of the dissolution of Czecho -Slovakia was a strong shift in the competitive situation of the three large Central European port grou ps German, Adriatic and Polish ports - in the area of the former Czecho -Slovak state. Until then, Czechoslovakia had been in the enviable position of being able to play off these three port groups, each of which naturally sought the largest possible shar e of the quite significant overseas imports and exports of this highly developed economic area, against each other. Czech malt and Czech sugar to the Scandinavian countries were coveted cargoes for Szczecin and its feeder river, the Oder, as well as for Gd ansk and Gdynia. In Pilsen, the Trieste based and Hamburg-based cargo buyers tried to force each other out of

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business at the Skoda Works and the Urquell Brewery. The ores of the Wittkowitz heavy industry were a long -established possession of the port of Szczecin and had always been much sought -after mountain freight for the Oder, but Gdansk and Gdynia also offered them favorable transport and expense rates, based on the dumping freight of the Polish coal mainline.

However, the cotton exchanges and forwarding companies in Bremen and Gdynia were scrambling for cotton shipments from America to the important Czech-Slovak textile industry.

The battle over freight was essentially fought on the backs of the Deutsche Reichsbahn. The opin ion of the Czechoslovak state railroads was ultimately decided by the calculating pencil. While the already mentioned "Zweckverbands" agreements existed for the traffic participation of the Adriatic ports, the Poles had always rejected any amicable agreeme nt on the traffic claims of their ports. Thus, the Reichsbahn had the particular task of making the German seaports more attractive in competition with the Polish seaports by offering cheap transit cargoes by rail or special handling tariffs in favor of the Oderschiffahrt. Since the Poles had no regard for economic efficiency in promoting their national port of Gdynia, this was not always an easy task. Thus, it was only possible to obtain Czech export products for Scandinavia by rail, if necessary by using the Oder, the port of Szczecin or, the German ferry service Saßnitz -Trelleborg against the Gdynia competition by means of extensive freight reductions of the Reichsbahn.

Now, with the breakup of Czecho -Slovakia, the situation changed fundamentally in favor of Germany. In particular, the Czech state railroad could hardly exert any influence on the transport route through its tariff policy. In the Sudetengau, it was completely eliminated, but in the rest of its territory it had only such short routes that it no longer had sufficient tariff power to favor the route to and from the Polish ports through substantial freight discounts. The increase in traffic for the Reichsbahn and the German seaports, as well as for shipping on the Elbe and Oder rivers, was all th e more significant because international traffic subsequently sought to avoid Gdynia and Gdansk more and more since the spring of 1939 due to the threat of war.

The port of Szczecin in particular was able to book substantial traffic gains for itself. In the traffic with the former Czechoslovakian territory and third countries, the port was now able to handle a lot of traffic, which until then the Czech railroad policy would have directed to the Polish ports or the Elbe for political or financial reasons.

By the way, the Poles did not give up their positions of power in the Protectorate and Slovakia without a fight. Although the German guns put their foot down in Poland also concluded this dispute, the means of pressure that

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the Poles used against Slovakia, for example, to make it impossible for it to hand over Slovak traffic to the German ports, are not without interest for our considerations. Poland first threatened the Slovak state railroads with the planned detour of its transit traffic through Slovakia, especially its large coal deliveries to Hungary and Yugoslavia, a measure which, given the geographical location and the low level of industrialization of the young state, would have had a very serious impact on the economic viability of its railroads and thus on its entire state finances. Then, however, the Poles announced that in case of transfer of Slovak traffic from Polish railroads, waterways and seaports to German ones, they would simply stop all coal deliv eries to Slovakia, and since coal was not available from Germany and the Protectorate at that time, this threat alone would have been enough to make the Slovaks compliant with the Polish wishes, had not the wheel of time passed over it very soon.

Naturally, however, the Reichsbahn was not yet in a position of As a company with a public service orientation, it had to take the established freight situation into account in order not to put the affected industry, most of which had also become German, at an una cceptable disadvantage in its production costs. Nevertheless, the German Reichsbahn will probably have to consider raising the freight level in the southeastern region, which has been run down

by Polish competition, to a degree that is still acceptable for the affected industry and for the German seaports, now that competition from non -German rail routes has ceased. The necessity of such a consideration may, after the return of normal conditions, possibly also result from the necessary consideration for the vital interests of Danube shipping.

However, the breakup of Czechoslovakia also made the German railroads partners and interested parties in a traffic management that the Czech state railroads had until then pursued contrary to the interests of the Reichs bahn, namely the interconnection of the Danube and Elbe in terms of railroad tariffs.

Since 1933, there has been a continuous railroad -navigation freight tariff ("Edu") for the broken Elbe -railroad-Danube traffic. The tariff facilitated this route by means of cheap direct freight rates, i.e. also including Elbe freight and Elbe transhipment costs, between the former Czecho -Slovakian Danube ports of Bratislava and Komarom on the one hand and the shipping ports of Hamburg, Magdeburg and Dresden on the other. Magdeburg and Dresden on the other hand with transhipment from or to the Elbe barge in the former Czecho-Slovak Elbe transhipment points. It thus benefited the port of Hamburg and, next to the Czech one, to a certain extent also the German Elbe shipping, but took these transports away from the Reichsbahn and at the same time also from the German Danube ports. After the political upheaval of October 1938, the Prague Ministry of Transport removed from the tariff the port of Komarom,

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which had once again become Hungarian, as well as the Sudeten German Elbe transhipment points, thus making its rail freight discounts available only for traffic between Bratislava and the Elbe ports of Melnik and Holleschowitz, which were located in the protectorate. The Reichsbahn, on the other hand, now intervened in the traffic with special freight rates in favor of the Sudeten German Elbe transhipment points and thus remedied the damage that Laube and Rosawitz had suffered in the course of their seces sion from the Czechoslovakian state union.

The Elbe shipping industry was mainly interested in grain exported from Southern European countries passing through Germany via Hamburg. Under the previous tariff situation, these shipments, unless they had gone d irectly by rail to Stettin, had gone on the Danube to Regensburg and from there by rail to Hamburg. Now, however, the railroad tariff provided for their partial transfer to the Elbe, and since Regensburg and its export routes had already been overloaded since the annexation of Austria, this loss of traffic was quite bearable for the old Imperial German Danube ports. However, not only German Elbe ports and Elbe shipping companies, but also the railroads of the Protectorate and Slovakia as well as the Slovaki an Danube port of Bratislava were involved in a traffic they had not seen before. But their involvement was only a consequence of the close political and economic relations of the Reich with the Protectorate of Bohemia and Moravia and Slovakia. The Reichsb ahn, however, had the advantage of a considerable shortening of its wagon runs and the inclusion of the Slovak freight wagon stock in the Bratislava run.

In the course of further developments, the Reichsbahn negotiated with the shipping companies on the El be and Danube, with the protectorate railroads and the Slovakian state railroads to include the port of Vienna in the Elbe Danube tariff and to provide it with reduced freight rates to and from the Upper Elbe. In this way, however, it now also involved Vie nna in the service of the Elbe River area and Hamburg's local and overseas traffic on the Elbe route.

The double-broken Elbe-Danube traffic thus favored by the Reichsbahn shortens the Hamburg -Black Sea route from 9,000 to 3,000 kilometers and, moreover, is not subject to direct enemy influence during the war. It thus anticipates the advantages of the Elbe -Danube Canal, which is planned for the distant future - freight concessions and relief for the Reichsbahn. But after the return of normal conditions, it w ill of course not be able to exclude the sea route via Gibraltar from the service of traffic with the Black Sea any more than the completed canal will.

In view of the close economic ties between the Protectorate and the Old Kingdom, the German freight law, i.e. the German railroad traffic regulations, was extended to the Protectorate territory as of January 1, 1940, to the extent

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that traffic to and from the Protectorate and through the Protectorate territory can now be handled on the basis of German bills of lading, in accordance with the German liability regulations, etc. The German freight rates and tariffs also apply to the calculation of freight, in view of the ongoing integration of the Protectorate's econom y into German economic life as a whole. However, in view of the steadily progressing integration of the Protectorate's economy into the German economy as a whole since the turn of the year 1940/41, German freight rates and tariff distances now also apply in principle to freight calculations.

In this context, it is not without interest that the average distances over which the Bohemian-Moravian Railways (BMB) transport their goods are only slightly lower than those resulting from the German Reichsbahn, altho ugh the Protectorate does not yet occupy the tenth part of the territory of the Old Reich. This can be explained by the fact that the Protectorate, thanks to its location in the middle of the Greater German area and thus in the center of Europe, has to cop e with a considerable and, since its incorporation into the Reich, constantly increasing volume of through traffic, and also by the strong alternating traffic of the four special economic centers of Bohemia and Moravia, Prague, Brno, Moravian Ostrava and P ilsen, three of which are quite eccentrically located in the area. Since the so -called agricultural industries are particularly well represented in the commercial economy of the Protectorate, the railroads have to cope with enormous peaks of traffic during certain periods, especially in the fall, which necessitate large reserves of rolling stock.

Thus, although the BMB's facilities and rolling stock may be sufficient for the Protectorate's own needs at the moment, they will soon be faced with the necessity of extensive investments in view of the new tasks that are constantly accruing to them. This is especially true of the development of the shortest routes from Vienna to Berlin and Silesia, which run through the Protectorate.

The tariff policy of the Bohemi an-Moravian Railways (BMB) will have to take into account the integration of the Czech economy into the German economy, as the fateful ties created by the political development also impose corresponding obligations on the Reichsbahn. It will be the task of the German tariff authority in the Protectorate to exert a guiding and promoting influence here.

The close economic ties between the Protectorate and the rest of the Reich naturally present both the Reichsbahn and the Bohemian -Moravian Railways (BMB) with a variety of individual tasks in the field of tariff policy. In view of the limited space availab le here, at least one of them may be singled out,

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which at the same time vividly illustrates the possible applications of the railroad tariff.

The agriculture of the Protectorate uses on average only 5 kg of potash per hectare, while in countries with intensive agriculture, such as Germany, Holland or Belgium, farmers use 20 -30 kg of potash per hectare. In order to increase the yield of cereals, beets and potatoes in the Bohemian -Moravian area to the necessary level, the potash c onsumption of the local agriculture should be doubled from 1940, and later quintupled. To this end, German potash prices were reduced by 30% free of charge in the Protectorate, to which the Reichsbahn also contributed by means of an exceptional tariff with a 30% freight discount and the Bohemian -Moravian Railways by partially assuming losses in freight distribution. The heavy additional traffic load that the Reichsbahn is likely to incur as a result of such a single measure can be seen from the simple fact that in the spring of 1940 it had to transport 18,000 tons, i.e. over 20 whole potash freight trains more than in the previous year, to the Protectorate region for this purpose, The establishment of the Protectorate of Bohemia and Moravia in March 1939 not only paved the way for a tremendous increase in rail traffic in and through the Bohemian-Moravian region, but it also marked out a generous future development for inland waterways and motor vehicles in this country.

Recognizing this, the Protectorate gove rnment has already been actively involved in the construction of Reich highways and the planning of the Danube-Oder Canal.

In the course of the separation of German -speaking territories from Czechoslovakia, Poland had also been able to enforce certain terr itorial annexations, among which the annexation of the Oderberg railroad junction into Polish territory was politically extremely inconvenient for Germany.

Poland became not only a riparian country of the Oder -Danube Canal, but also a transit country for l arge parts of the German traffic with the Ostmark, Hungary, Romania, etc.. This, however, gave the Polish ports, for example, a convenient opportunity for commercial espionage against the Szczecin and Hamburg port traffic with these countries, and the tran sport expert is therefore particularly grateful to the soldier that, together with the Polish state itself, this spook also disintegrated into nothing within a year.

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Chapter 4 The return of the Memel region

While in the case of the annexation of Austria and the incorporation of the Sudetengau, transportation problems formed only a part - albeit an important one - of the wealth of economic hopes and desires with which the newly won territories made their entry into the Greater German Reich, the day -to-day national economic promotions that arose in the case of the return of the Memelland were almost exclusively transportation issues. After being freed from the price pressure of Lithuanian agricultural products a nd after the removal of the customs barriers on the Tilsit Memel Bridge, the agricultural sector of the Memelland easily found a connection to the German market. On the other hand, all the prerequisites for a revival of the sawmill industry, which primaril y determined the industrial face of the Memelland, were in the area of transportation. The small Lithuanian state had not been able to offer the huge sawmills around the Memel harbor basin, which German entrepreneurial spirit had created there before the W orld War, either the timber basis of the Russian forests or the large and receptive sales market of Germany, While the tsarist empire with the forests around Augusto vo and Vilnius had been the main catchment area for the logs of the Memel sawmills and the Memel river had been an efficient and cheap feeder for them, As a result of the political tension between the two states because of Lithuania's claims to the Vilnius region, as is well known, all direct rail traffic between them was made impossible until 1 938 by tearing down the rail line on both sides of the green border, and all cross -border rafting traffic on the Memel River was forcibly prevented. In addition, Poland wanted to process its logs in its own country and export them via its own ports. Thus, it was no wonder that the Memel sawmill industry, and with it the Memel harbor traffic, suffered a severe setback when the Memel region was reincorporated.

After their return to the Reich, the Memel sawmills have been able to bury their sales worries for a ll time, because, no longer hindered by customs barriers, railroads, coastal and ocean shipping open up the entire breadth of the lumber-hungry German market to them. But also their need for raw materials has already changed fundamentally in the meantime d ue to the collapse of Poland. As in the time before the First World War, high -quality logs from the old catchment areas flow into their gates from the forests around Augustovo, in the Suwalki region and around Vilnius on newly constructed rail lines and on the Memel River, which has been freed from its fetters.

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The seaport of Memel is also well on the way to regaining its former importance for transport. This development is already compensating for the loss of the not inconsidera ble Lithuanian food exports to England due to the war. However, its revival is not expected after the end of the war. Then the port of Königsberg got used to the idea of having to give up part of its previous traffic to Memel. Memel experienced further tra ffic growth in 1939 from the German-Soviet economic agreement. These agreements have now become obsolete and future forecasts are undoubtedly premature. Nevertheless, transports from the Russian area can now reach Memel without touching a third transit cou ntry, as in the past, and thus causing the consignor a foreign exchange expense for transit freight. From this fact Memel may also derive the hope to be more involved in the Russian timber export in the future, especially as long as the ports at the White Sea as well as Riga and Leningrad are frozen. At the same time, however, our sawmills and seaports in East Prussia, and with them the railroads, will no longer be able to count on as large a Russian timber export in the future as they did before the World War, in view of the decades of greatly exaggerated logging in the western Russian and Baltic regions.

A certain overlapping of interests between the seaports of Memel and Königsberg may not always be avoided in this context, but it will never become a vital issue for either port, especially since the historically conditioned division - grain and pulses for Königsberg, timber for Memel - will inevitably arise again for future development, particularly in the Russian business. In addition, however, Memel' s eccentric geographical position in the Greater German area means that it is unlikely to become a serious competitor to the other German Baltic ports and thus pose far fewer problems for German transport policy than the port of Gdansk, which returned to t he German Reich after the breakup of Poland.

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Chapter 5 The collapse of Poland

None of the world -historical changes of the last two years has had such a drastic and diverse effect on transport policy as the incorporation of previously Polish territories into the Reich and the establishment of the General Government of Poland, which has brought Germany into direct contact with Russia, the "Union of Soviet Socialist Republics", for almost a thousand kilometers. The powerful victory of the German weapons has triggered such an abundance of new tasks for the carriers of Greater Germany that we will only be able to touch on them in very broad strokes in this broader framework.

The most obvious aspect of the new map of Europe will be the elimination of the so-called Polish corridor created by the Versailles peace treaty. This politically unbearable rupture - of the territory of a great power was, of course, also an impossibility in the long run from a traffic poin t of view. But while this state of affairs severely affected motor vehicle and inland waterway traffic, for the Reichsbahn it meant less of a traffic burden than an operational and financial one. The Paris State Treaty of 1921 had given the Poles the task of running the German East Prussian trains through the corridor area with Polish machines and Polish personnel and had obligated Germany to allocate freight and fare shares to the Polish state railroads for this purpose according to Polish tariffs. For the Poles, this was an operationally conceivably simple, but also extremely profitable business, with which, for example, in the normal year 1936, they earned no less than 36 million RM. freight revenues in foreign currency. The German passenger or carrier, o n the other hand, was not affected by these Polish claims. He paid the Reichsbahn for the entire route according to the calculated German tariff and left it to the Reichsbahn to pay the Polish railroads. In freight transport, he enjoyed the advantage of th e vertical scale, i.e., the de -emphasis discount already mentioned at the beginning, which the German tariff provides for, while the Reichsbahn, as a result, was usually left with only quite moderate rates after the Polish freight share had been eliminated . Thus, while the victory of the German arms reinstated the Reichsbahn in its old operational and transport tasks, it did not change much for the rail users in monetary terms. The German foreign exchange economy, however, was relieved of a considerable ong oing burden, and German transport life was freed from the pressure of various inconveniences that had arisen from the transfer of traffic to the sea route, which had largely been carried out in order to save foreign exchange, and from the temporary blockin g of corridor traffic by the Poles.

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For the traffic between Silesia and East Prussia, too, the elimination of the Polish corridor resulted in certain reductions in the charges and also in freight concessions, insofar as these had not already been anticipated in the interest of the East German economy, which had been severely affected by the Versailles border demarcation, by means of exceptional tariffs of the Deutsche Reichsbahn.

On the other hand, the erasure of the unnatural bor der, with which the arbitrariness of the Versailles enemy alliance states had given away almost 2/3 of the large Upper Silesian territory to Poland after the World War and the Polish uprisings, had a much more drastic effect on the economy and traffic. The elimination of the border between the two Upper Silesias abruptly expanded the catchment area of the Odra River and the port of Szczecin, from which the Polish -French coal railroad to Gdynia had withdrawn the important traffic of Eastern Upper Silesia and the Karvin Basin. The railroad tariff picture, on the other hand, did not undergo any significant changes here either, since the German Reichsbahn had already been making planned efforts since the Geneva Agreement on Upper Silesia concluded between German y and Poland in 1922 to compensate for the effects of the border demarcation as far as possible, at least in the transport area, by means of tariff measures in the interest of the West Upper Silesian economy in particular. But in terms of volume, the traff ic of the Old Kingdom with East Upper Silesia now experienced an enormous increase, of course, also on the railroad.

In the variety of prospects and new tasks that the breakup of Poland opened up for the carriers of Greater Germany, questions of seaport po licy were again very much in the foreground. The ports of the former Polish customs territory, Gdansk and the national seaport of Gdynia, created by the Polish state and supported by all means, had until then had no share in Germany's seaborne imports and exports, but on third markets they had appeared as fierce competitors of our German seaports. We have already encountered them in this role several times in our observations. In this context, it would be interesting to report on the desperate struggle for existence that Gdansk has had to fight for two decades against its rival Gdynia, and in the course of which the old Hanseatic city has declined from a rich trading port to a port of shipment for bulk goods that is becoming more and more impoverished every year. The hard efforts made by the German seaports and, in alliance with them, the Deutsche Reichsbahn, to give the German ports a share in the transport service of the Polish territory, e.g., to provide the Bremen Cotton Exchange and the port of Bremen wi th raw material supplies, would undoubtedly also attract lively interest. Bremen port the raw material supply of the Lodz textile industry. But the limitation of the space available here forces us to look only at the present and the future.

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It goes without saying that Polish wrongs will be righted in the division of traffic between Gdansk and Gotenhafen. It is expected that Gotenhafen will be developed into an imperial war port, but a large harbor basin with moder n cranes, tippers, etc., will be maintained for coal handling from the coal main line, especially in shipment to Scandinavia, and in the opposite direction for ore traffic to Greater Upper Silesia. Thus, the tasks and the interests of the two ports should be clearly set off against each other without further transport policy measures. The establishment of a joint port company should also put an end to the former unfruitful competition - the purely political background of which has now become irrelevant. The tariff policy of the Reichsbahn will, of course, endeavor first and foremost to return high -value traffic to the seaport of Gdansk, which is undoubtedly still in need of special protection at present, and to use Gotenhafen essentially only as a relief for bulk cargo. Only further developments will show whether the modern facilities created by the Poles in Gotenhafen for handling and processing high -value general cargo and cargo traffic, e.g. cold stores, oil mills, cotton warehouses, etc., will remain comp letely unused in the long term. In addition to Gdansk, Szczecin, Hamburg, Lübeck and, especially for the important cotton traffic, Bremen, have already more or less emphatically filed hereditary claims to the Gdynia traffic and have also called on the Deut sche Reichsbahn to support them by setting their seaport tariffs accordingly.

Now Gdansk and Gotenhafen are gradually being included in the German and interstate seaport exemption tariffs for the import and export of Germany and third countries, and are thus being placed on an equal footing with the other German ports. This advantag e, however, is at the same time connected with a certain disadvantage in that, of course, the special freight privileges granted

by Poland to enable its ports to attract traffic from German and Adriatic seaports at any price, will have to be eliminated.

In the long run, the transport policy of the Reich will have to be that Szczecin - the large forwarding port, preferably for bulk cargo - will operate primarily as a waterway transshipment port, while the export coal rolling by rail on the former Polish-French coal route to the coast will be the main transshipment cargo in outgoing traffic for Danzig and Gotenhafen. The creation of the newly established Upper Silesian Coal Syndicate, covering all coalfields, will perhaps help to divide up the shipment of coa l across the Baltic Sea in such a way that certain eastern Upper Silesian areas will only handle coal via Gdansk and Gotenhafen, and certain western Upper Silesian areas will only handle it via Szczecin.

However, the elimination of the Polish state as a tr ansit country and the future stronger economic integration of Germany with the Russian area also opened

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up the prospect for the port of Gdansk to become the gateway on the Baltic Sea for the transcontinental canal connection from the Black Sea via Dnieper Bug-Weichsel, which would reconnect the Vistula, so neglected by the Poles, to the great German power grid. Before the outbreak of war, its expansion on both sides of the German -Soviet border of interests had already been vigorously undertaken. Of course, the importance of this waterway for transport policy should not be overestimated. It operates under climatic conditions where icing must be expected for 5 months of the year, and therefore barge space shortages must be expect ed for several weeks before and after the cold period. After that, however, it will probably only be able to serve the traffic of its neighboring areas and hardly to a large extent the traffic coming from the Black Sea or ending there.

The elimination of P olish seaport competition and the integration of the Gdansk-Gotenhafen port community into the circle of German seaports now makes it necessary to redistribute traffic among them and, for this reason, to reorganize the seaport tariffs of the Deutsche Reich sbahn. Since the German seaport tariff policy is subject to the above -mentioned special-purpose association agreements, which apply only to overseas traffic and do not affect transit to and from the Baltic countries, the necessary reallocation of traffic among the German seaports in terms of railroad tariffs will perhaps have to be based on special regulations for Baltic and overseas traffic. The influence of the railroad tariff on the traffic management is carried out in the form of fixing certain margins in the freight rates for the various seaports, whereby the ports which, like Szczecin, are geographically favorably situated to the southeastern states (which are mainly under consideration here) are designated, On the other hand, other ports consider any artificially established margins necessary for a fair balance between the traffic demands of the various ports and to prevent an undoubtedly undesirable fragmentation of overseas traffic. If Hamburg is taken as the basic port for overseas traffic, Szczecin must be the necessary starting point for Baltic traffic. It is therefore particularly important to regulate the margin ratio between these two ports.

If this margin is set too low, the resulting proportionate increase in freight costs for the Baltic ports will put them at a disadvantage or perhaps even eliminate them from overseas traffic. This consequence is naturally opposed in particular by Gdansk, which understandably shows little inclination to hand over the inheritance of its old rival Gdynia to Hamb urg and Bremen.

It will be less difficult to regulate the margin ratio between the Baltic ports.

If, of course, the freight rates were based solely on the difference in distance, Lübeck and Gdansk would have to take a back seat to Szczecin in Baltic traffi c as well. However, the fact that the attraction of a seaport depends not only on the amount of its inward and outward freight but also on its so -called

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facilities, i.e. its technical capacity and the traffic po ssibilities it is able to offer, cannot be completely disregarded when calculating freight rates.

As in the case of the dissolution of Czechoslovakia, the Danube transshipment port of Vienna was able to benefit from the political events in the transport sector during the disintegration of Poland. The Polish railroads, in cooperation with the Czech railroads, had not only diverted the trade of the Polish territory itself with the Danube region through dumping tariffs to and from Bratislava, but also a part o f the transit traffic of the Southeast European countries to and from the Baltic countries from the Danube ports of Regensburg and Vienna to Bratislava and from the German Baltic ports to the Polish ports. Now, however, the Reichsbahn created a new Danube transshipment tariff for direct rail traffic to and from German Baltic Sea ports for this traffic of the states bordering Germany in the southeast and initially only included freight rates for Vienna in it, in order to regain for this place the preferentia l position it deserved as a transshipment point for the southeast. Thus, Vienna suddenly assumed a completely new role as an intermediary for these traffic flows as well.

For geographical reasons, the Slovak port of Bratislava was left with the coal traffic of the Teschen and Karvin coalfields to the south and southeast, which had now also fallen to Germany, and it also received an additional 200,000 tons of coal from these coalfields for Yugoslavia, which had previously been transported via Gdansk/Gdynia t o the Adriatic ports of Susak and Split, Fiume and Trieste. In view of the close economic relations between the Reich and Slovakia, the port of Bratislava has also been allocated a special catchment area in the Old Kingdom and the Protectorate by means of the corresponding freight assessment in the new German -Slovak Danube transshipment tariff, and then the -German-Bohemian-Moravian-Slovak seaport tariff also favors Bratislava in imports and exports via the German Baltic ports. The future will show whether Pressburg will have to be provided with special freight rates for foreign policy reasons or to relieve Vienna.

After the elimination of the Polish competitive route via Gdynia, the Oder, like the Elbe in 1939, was connected to the Danube river system by an OderDanube transhipment tariff of the "Deutsche Reichsbahn" ("Odu"), which connects both rivers and also includes the Oder freight. The tariff -- forerunner of the planned Danube -Oder Canal -- cheapens traffic arriving on the Danube from the eastern coun tries in transhipment via Vienna or Bratislava and the Odra transhipment points of Cosel and Breslau by means of freight discounts granted by Deutsche Reichsbahn. Corresponding measures have been taken for the opposite direction. The port of Szczecin is ca lling for this help from the Reichsbahn all the louder because it believes that it has already lost extensive

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grain and flour transports for Scandinavia, which used to go from Hungary and Romania by rail via Szczecin, to Hamburg as a result of the new Elbe -Danube tariff granted by the Reichsbahn.

This example, by the way, again shows how carefully rail tariff reductions must be weighed so that they do not interfere with the balance of economic forces and interests.

In its broad outline, the Danube tariff policy of the Reichsbahn indicates the intention, through an appropriate structuring of the rail freight tariffs, to make the Danube traffic destined for the North Sea ports The intention is to route Danube traffic to and from ov erseas ports via Regensburg and Passau or the port of Linz, which is currently being developed to a high level of efficiency, while traffic with Scandinavia and the Baltic States is preferably routed via the Danube transhipment point in Vienna - and possibly also Bratislava - and the German Baltic Sea ports. This idea also meets with the approval of Danube shipping. However, its full realization is naturally not yet possible during the war.

All these tariff concessions pave the way for a future transport ec onomy that aims to unite the catchment areas of the major German river systems into a vast unified economic area. At the same time, they serve the purpose of making the German inland waterways usable as far as possible to relieve the Reichsbahn. Their futu re fate cannot yet be predicted in the long term. It will depend on further developments.

The historical act of reintegrating the old German settlement areas in the East into the Reich will also assign a wealth of new tasks to the transport carriers of Greater Germany. In order to meet these challenges, not only the waterways but also the rail network of this promising region will require extensive expansion. This is already in full swing, supported by the energy of the Third Reich. But there are also treme ndous opportunities for the railroad to promote its policy toward the East through a planned improvement of the business climate on this soil, which has been hallowed by the national struggle of centuries. For years to come, one of the most important and a ttractive tasks of Deutsche Reichsbahn's transport policy will be to do justice to these opportunities by wisely weighing up the economic and political needs of the state.

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Chapter 6 The Boundary Shifts in the West and South of the Empire

If we then also want to take a brief look at the effects of the warlike events beyond our western borders on the major German carriers, we may first note that the repatriation of the districts of Eu pen, Malmedy and Moresnet, which has already been completed under constitutional law, has essentially confronted the major German carriers with tasks of local significance only.

Alsace and Lorraine, on the other hand, are very conveniently located at the intersection of major north -south and east-west traffic flows. The reannexation of these areas to the Reich will therefore give a strong boost both to rail traffic, especially their very dense rail network, and to the Rhine transhipment port of Strasbourg, especially since both can now be exploited much better than before for the economy of the neighboring Rhenish area.

The economic exchange of these provinces with "the Reich", which had not been abolished by the Versailles Dictate, but had been greatly redu ced, will of course also experience a great upswing. The bulk goods that will be transported by rail are the Lorraine minette to the blast furnaces on the Saar and Ruhr and certain metallurgical products, and in the opposite direction considerable quantiti es of metallurgical coke, transports that will undoubtedly revive the old dispute over the canalization of the Moselle with the expected ever closer integration of the Lorraine iron district with that of Rhenish Westphalia. The question of an extension of the other canal system on the left bank of the Rhine with the aim of involving inland navigation more strongly in the development of economic relations between the Old Kingdom and these regions as well as between Greater Germany, France and the Mediterrane an region in the distant future will also have to be revisited under different conditions.

Alsatian agriculture, which lacked sales opportunities during the French period, will find a receptive and profitable market in Germany and will easily be included in the preferred fast service, which connects the vegetable and fruit growing areas of Baden with Berlin and other main markets by means of fast freight trains with a speed of 65 km per hour. Above all, however, the Alsatian potash mining industry will pose considerable transport challenges for the Reichsbahn and soon also for Rhine shipping, especially since the high quality Alsatian potash with 22% purity will probably also come into question for overseas export in view of the German potash wealth.

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It seems premature today to speak about the effects of the border shifts and the formation of new states on transport policy, which have occurred or may yet occur in the course of the suicidal policy of the former Yugoslavian government, especially if the development of things here is not yet complete.

The territorial expansions that Greater Germany has experienced through the liberation of Lower Styria and parts of Carniola, however, draw the attention of the transport expert to the in teresting fact that the Reich and the German Reichsbahn now have a much greater share in the natural catchment area of the port of Trieste and in the access routes to it than before. Whether this fact will have any consequences for German seaport policy, a nd if so, what they will be, cannot, of course, be foreseen for the time being.

Following the expansion of Germany's borders and in line with the concept of a large economic area, the transport policy of the German Reich and its major carriers is finally f acing some very drastic changes in the economically very important area of coal freight by rail and waterway. After all, the extensive consolidation of continental coal production in German hands in the interest of economically sound sales regulations in t he European region will inevitably result in completely new tasks for the coal tariff policy of the transport carriers of Greater Germany. However, it is not yet time to outline them in detail.

An outlook of far-reaching importance is opened by the indicat ion that in a future European economy the competitive relationship of the Rhine estuary ports (so-called western ports, Rotterdam and Amsterdam) to the German North Sea ports will have to be viewed with different eyes than before. Here, too, the political facts created by the sword will confront German transport policy, especially the seaport tariff policy of the Reichsbahn, which has always been called upon in this struggle as the ally of the German seaports, with new perceptions and tasks.

Perhaps, howeve r, it is precisely these examples that will make it clear to the world that German metropolitan policy does not mean economic enslavement of our neighboring peoples, but new, greater prosperity for a happier Europe.

Chapter 7 Concluding remarks

Already our discussion of the new tasks which the destruction of Poland has set for the carriers of Greater Germany has led us right into the middle of the effects of this war on transport policy. But at a time when the iron mouth of

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the cannon is deciding Germany's fate for centuries to come, all our thoughts are far too full of this warlike conflict to conclude our discussion without at least a brief look at this area.

The interstate freight traffic by rail, wh ich has probably been increased the most by the war, is the coal traffic to Italy. It averages 1 million tons a month and, as the daily press reports, is moved in 65 freight trains a day. In the past, most German coal went to Italy by sea or as far as Base l on the Rhine waterway.

The fact that this traffic must be secured under all circumstances for political and military reasons needs no further emphasis. The important Italia export of the Upper Silesian coalfields - 2/5 of the total quantities - is handled via Tarvis or Rosenbach, while Brenner, Gotthard and Lötschberg are basically kept free for Ruhr and Saar coal. Of the approximately 2,000 wagons required daily for this purpose, part is provided by the Italian state railroads themselves. In view of the great operational and wagon service difficulties of this task, foreign experts initially considered its complete solution impossible.

The fact that it nevertheless succeeded will remain a glorious chapter in the history of German railroads for all time.

Of great importance, especially after the occupation of Denmark and Norway

by German forces, is the German export of coal to Scandinavia. This, too, is predominantly by rail and the subsequent ferry connections, and if Germany takes over only about two thi rds of the former English and Dutch coal exports to Scandinavia in addition to the present German and Polish export quantities, it will reach the volume of German coal exports to Italy. Here, it will be the task of a reasonable transport planning to bring as large a part as possible of these transports to the Oder and then to the sea shipping in Szczecin, for which, however, a lowering of the Oder for eighth will hardly be avoidable.

The coal will, of course, have to accept the disadvantage of having to be transshipped twice (from the wagon to the barge and from the barge to the ocean-going vessel). As already reported, Gdansk -Gotenhafen is to be included in this traffic on a large scale for the time being, utilizing the coal mainline.

This is an additional task for the present and the future of the German North Sea ports, which will inevitably be particularly affected by the war. Of course, other European countries, which used to obtain English coal or at best Ruhr coal by sea, are now dependent on the suppl y of German coal by rail.

The oil traffic from Romania also places the highest demands on the major German carriers; considerations of national defense prohibit more detailed information about it here. But it goes without saying that the needs of warfare have greatly increased the importance, volume and urgency of this traffic. The current closure of the eastern Mediterranean by the British has meant that,

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since Italy's entry into the war, the country's enormous oil supplies from Romania, which used to run from Constanza by sea, have been completely transferred to the railways. Today, oil traffic has become an enormous operational and organizational task for all railroad administrations involved.

At the same time, however, there h as been a considerable increase in oil traffic on the Danube since special transport measures taken by the Deutsche Reichsbahn have succeeded in supplying the Danube with additional tanker capacity from the Elbe and Rhine.

It is probably too early to talk about all the major transport problems that the exchange of goods with Russia will pose for Europe's carriers after the war, and it would go beyond the scope of this article. Once the German sword has completely crushed the world danger of Bolshevism and t hus cleared the way for the construction of the great European living space of our race, tasks of immense proportions will open up for all carriers of Greater Germany.

The outbreak of war with the Soviet Union has interrupted a new upswing in traffic that was initiated by the German -Soviet economic agreements of the fall of 1939. Although this upswing lacked a sound and therefore lasting political basis, it nevertheless revealed the enormous possibilities for the exchange of goods with this region, and it h ad already prompted the Soviet state shipping lines - Sovtorgflot and Morflot - to establish regular services to and from Szczecin. We have already touched upon the role that the large transcontinental canal connection between the Black Sea and the Baltic Sea via Dnieper-Bug-Weichsel will be called upon to play in connection with the future tasks and possibilities of the port of Gdansk. The foreseeable increase in traffic, especially for mass transports in the east -west direction, has, however, already stim ulated the railroad literature to generous plans for a four-track long-distance express railroad between Germany and the Ukraine.

The elimination of a transit country that devours foreign currency, such as Poland, will be enough to stimulate rail traffic c onsiderably. However, the fact that rail traffic can, under special circumstances, even reach across entire continents is demonstrated by the developments of recent years: Until the outbreak of the Russian war, Germany obtained enormous quantities of cotto n from Turkestan and soy products from Manchukuo by rail. In this context, it is not uninteresting that the Japanese press has repeatedly raised the idea of a two- or even four-track extension of the railroad from Manchukuo through Siberia to Moscow and Be rlin for discussion, because this rail line as the main artery of a continental bloc might one day be of similar importance as the Suez Canal for the British Empire, The lessons of the war have demonstrated to all of us what the pre -war development had alr eady shown to the sighted: Europe needs a strong inner -

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European transport network if its parts are really to benefit each other economically.

Despite the losses it suffered during the war, maritime shipping will not only regain its former strength, but will also benefit from an increase in intra European commercial traffic. In the future, however, completely new opportunities will open up for the German flag and the entire seaport industry in terms of maritime tr affic extending into other regions. The London Shipping Exchange, which closed its doors in October 1940, will have to cede a large part of its tasks after the war to a new working center for the management and distribution of overseas transport tasks from a German seaport. Above all, however, the exchange of goods with the new colonial territories alone will give German shipping such an abundance of new tasks that it can and will have to give up other transports that have hitherto been important to it in t erms of earnings.

Today, however, European transport policy can only be made in view of the great fateful events that have been taking place in Europe since Germany's reawakening and that have cast a spell over almost all peoples and regions of the world. With all the military strength of the German people, German transport policy is also in the forefront of this struggle and, once the weapons have been laid down, it will also be called upon in the first place to clear the way for a new cooperation of the p eoples in a richer, happier Europe.