The Europische Wirtschaftsgemeinschaft - Berlin 1942

(The European Economic Community - Berlin 1942)

By: The Reichs Economic Minister and President of the Reichsbank, Funk; Professor Jecht, Berlin; Professor Woermann, alle; !r" Reithin#er, Berlin; Ministerial !irector !r" Bennin#, Berlin; Ambassador !r" $lodius, Berlin, and Professor !r" unke, Economic $ommittee %d&isor, Berlin With an introduction by: Economic $ommittee %d&isor, Professor !r" einrich unke President of the 'ociety of Berlin (ndustry and $ommerce Issued by: The ociety of Berlin (ndustry and $ommerce and the Berlin 'chool of Economics It may shock most to learn that Nazi ideology was, and still is, behind the EU. The document that follows is the English translation of the original German one as referenced under the World atalogue ! " number #$%%&'&$ and a(ailable in the )ublic domain (ia (arious libraries, archi(es and websites. It is a document of great historical significance and essential to understanding the mindset behind the Euro)ean Union and where the idea originated. It is the original blue)rint for *the Euro)ean Economic ommunity+ which would later become, as we know, the Euro)ean Union. reated as a series of seminars by the Third ,eich+s Economic -inister and (arious ad(isors to .dolf /itler so that in the e(ent the Nazis should fall to the allies and lose the war, they could com)lete their )lans co(ertly by sub(ersion, treason and sedition from *within each go(ernment+. In it you will find the )ro)osal of a one united Euro)e with one currency, one trans)ort system0and more im)ortantly, the United 1ingdom was to be 2de-industrialised2, and used for a limited amount of agriculture and tourism. The )lan was to usur) each nation+s so(ereignty, including 3ritain, and create a Euro)e wide dictatorshi)4 and for us, stri))ing out anything that )ut the 2Great5 into 2Great 3ritain5. Ironically 6 -ar7ism, ommunism, 8ocialism, 9ascism, and or)oratism ha(e all turned out to be distracting labels for the same ideology and in reading this document, one will find it chilling that most of the changes that the Nazi+s had )lanned for the United 1ingdom ha(e already been im)lemented. 8lowly, but surely, and by co(ert means, the followers of this ideology, these cons)irators, backed by huge financiers, namely the international banking families, ha(e succeeded in infiltrating Westminster through the )olitical system and )arts of the Intelligenstia o(er the last :% )lus years. They ha(e ushered in the .cts and Treaties en(isaged in this document ; !AT" 194#$ The Treaty o% &aris 19'1$ (ean )onnet 19'2$ The Treaty o% *ome 19'#$ European Communities Act 19#2$ European )onetary ystem 19#9$ in+le European Act 19,#$ The )aastrict Treaty 1991$ Euro Currency 2--2$ The .isbon Treaty 2--9/

This manifesto is the foundation that these traitors within our )olitical establishment ha(e been building on since the end of the second world war. It was a means to an end. .n ugly end. We may had remo(ed /itler from )ower, but the forces behind him )ressed on and what was not achie(ed by arms, has sadly now been established through money, treason and sub(ersion.

o(er )age of the !riginal German <ocument of 8eminars

ontents )age of the !riginal German <ocument of 8eminars

Europaische WirtschaftsGemeinschaft
3EING in Translation=

EUropean Economic Community

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,eichsWirtschaft-inister u. ?resident der <eutschen ,eichs3ank 9unk4 ?rofessor <r. @echt, 3erlin4 ?rofessor <r. Woermann, /alle4 <r. ,eithinger, 3erlin4 -inisterial<irektor <r. 3enning, 3erlin4 Gesandter <r. lodius, 3erlin, und GauWirtschafts3erater ?rofessor <r. /unke, 3erlin
-it einer Ein9uhrung (on=

GauWirtschafts3erater ?rofessor <r. /einrich /unke ?resident des >ereins 3erliner 1aufleute und Industrieller
/erausGeGeben (on dem

>erein 3erliner 1aufleute und der /och8chule Und Industrieller 3erlin ?ublished

Wirtschafts ;

BE !"# 1942
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The European Economic Community -r. 9unk, the ,eich+s Economic -inister and ?resident of the German ,eichsbank ?rofessor <r. @echt, 3erlin ?rofessor <r. Woermann, /alle <r. ,eithinger, 3erlin, -inisterial <irector <r. 3eisiegel, 3erlin 8ecretary of 8tate 1Enigs, 3erlin <irector <r. 3enning, 3erlin .mbassador <r. lodius, 3erlin and Economics ommittee .d(isor ?rofessor <r. /unke, 3erlin With an introduction $y Economics ommittee .d(isor, ?rofessor <r. /einrich /unke, ?resident of the 8ociety of 3erlin Industry and ommerce "ssued $y The 8ociety of 3erlin Industry and ommerce and the 3erlin 8chool of Economics ?ublished 3E,"IN $AB& 8econd ,e(ised Edition F3erlin $AB#G /aude and 8)enersche ?ublishing /ouse -a7 ?aschke

Preface to the First and 'econd Edition )his te*t contains the lectures +resented under the title ,)he Euro+ean Economic $ommunity- by the 'ociety of Berlin (ndustry and $ommerce at the start of ./01 in con2unction 3ith the Economic %d&isor to the Berlin $ommittee of the 4'!%P and )he $hamber of )rade and (ndustry" )he order of lectures 3as as follo3s:
Walter 9unk, ,eichs Economic -inister and ?resident of the ,eichsbank= %The Economic &ace of the #e' Europe( <r. /orst @echt, ?rofessor at The 3erlin 8chool of Economics= %)e*elopments to'ards the European Economic Community( <r. Emil Woermann, ?rofessor at /alle Uni(ersity= %European +griculture( <r. .nton ,eithinger, <irector of the Economics <e)artment of I.G. 9arbenindustrie ..G., 3erlin= %The European "ndustrial Economy( <r. ?hili)) 3eisiegel, -inisterial <irector of the ,eich+s "abour -inistry= %The )eployment of !a$our in Europe( Gusta( 1oenigs, 8ecretary of 8tate, 3erlin= %,uestions +$out European Transport( <r. 3ernhard 3enning, <irector of the ,eich+s redit om)any, 3erlin= %,uestions +$out Europe-s Currency( <r. arl lodius, .mbassador of the 9oreign !ffice= %European Trade and Economic +greements-?rofessor <r. /einrich /unke, Economic ommittee .d(isor of the N8<.?, ?resident of Germany+s Economic ?ublicity .gency and the 3erlin 8ociety of Industry and ommerce= %The Basic ,uestion. Europe - /eographical Concept or 0olitical &act1(

The lectures met with considerable interest and (ery strong agreement. !n account of this, we feel we should make them a(ailable to a wider circle of )eo)le. 3erlin, 8e)tember $AB& The 8ociety of 3erlin+s Trade and Industry 6 The ?resident= ?rofessor <r. /einrich /unke, .d(isor to the Economics ommittee The 3erlin 8chool of Economics 6 The ,ector= <r. Edwin 9els, ?rofessor of Geogra)hy

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Introduction The <iscussion 8o 9ar and its ,esults Economic ?ractice ?roblems ,elated to Economic ommunity of ontinental Euro)e The Economic 9ace of the New Euro)e ,eal and 9alse Economic 9reedom o6o)eration in ontinental Euro)e Euro)e+s ,esources and om)letion <irecting of the Economy by the 8tate and Work between the 8tates of the ommunity The -o(ement of ?ayments between the 8tates and Euro)ean urrency Issues 8ecuring the .rea and Economy of Euro)e The Will for o6o)eration in the Economic ommunity <e(elo)ments towards the Euro)ean Economic ommunity The Euro)ean Economic ommunity and its Enlargement The ?roblem of the Euro)ean Economic .rea in "ate .ntiJuity and the -iddle .ges ,ecent hanges to the ?roblem of the .rea of Euro)e The 9ormation of the Nations and Inde)endent Economies !(erseas E7)ansion and its onseJuences for Euro)e The ,elease of England from the ontinent and the 9ormation of the 29ree Global Economy5 Euro)e+s Economic New !rder= The ?resent Task olla)se of the ?re(ious World Economy -eans and !bKecti(es of the Euro)ean Economic ommunity !utlook Euro)ean .griculture The <e(elo)ment of .gricultural Enter)rises and the 8tructure of Euro)e+s 9ood Economy The 9ormation of the <i(ision of "abour in World .griculture ?roduction Increase in Germany and Italy The 8u))ly 8ituation under the Influence of Economic ,estrictions and hange ?olitical onseJuences for ?roduction ?ossibilities of Increasing Euro)e+s 9ood ?roduction The Euro)ean Industrial Economy The <e(elo)ment of Industry in the $Ath entury 8tages of Technical and Economic <e(elo)ment 8ocio6?olitical Effects The "oss of Euro)e+s /egemony in the World War The Transition to 8tate <irection and ?lanning New Euro)e and its 8hared 9eatures ,egional <ifferences in Euro)e

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The -aKor ?owers at War 6 . om)arison of their a)abilities P%MP 5E) 678 3eisiegel The <e)loyment of "abour in Euro)e ?o)ulation <ensity, Number and 8tructure of the Em)loyed ?eo)le 6 The Wealth of Euro)e Worker E7change on the 3asis of Inter68tate .greements .da)tation of the !rganisation for "abour <e)loyment Em)loyer .ction and !rder 8witching Luestions about Euro)ean Trans)ort 2Technical Unity5 in the ,ailway 8ystem The -agna arta of Euro)e+s Internal ,i(erboat Traffic -otorways+ ontribution to the Euro)ean Trans)ort ommunity ommunity Work in 8hi))ing @oint Work in .ir Traffic Luestions about Euro)e+s urrency urrency+s Two 8ides The Internal Economic 8ituation of Euro)e+s urrencies -anaging 9oreign E7change and 3ilateral 8ettlements <e(elo)ment of -ulti6"ateral 8ettlements The ?roblem of the learing 3alances .dKustment of Euro)e+s E7change ,ates 9uture 9ormation of the Euro)ean urrency 8ystem Euro)e+s 9uture urrency ,elationshi) to the urrencies of !ther -aKor Nations What about GoldM The Euro)ean urrency 3loc Euro)ean Trade and Economic Treaties The ?eriod of the !ld Trade ?olicy German Economic and Trade ?olicy since $A## hanges to Trade ?olicy aused by the War The ,e(ersal of the "aw of 8u))ly and <emand The Luestion of "abour <e)loyment in Euro)e The ?roblem of Traffic Effects of the English 3lockade on Euro)e ?rinci)les of Euro)ean o6o)eration The Euro)ean ,egional ?rinci)le Euro)e+s Economic Inde)endence Euro)e and the Global Economy Internal ?reconditions of a Euro)ean Economic ommunity Ways to .chie(e Euro)ean o6o)eration

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The 3asic Luestion= Euro)e ; Geogra)hical once)t or ?olitical 9actM New "earning and Thought 8tarting ?oint for Euro)ean Task Three Eras The haracter of the Global Economy ?olitical Weakness of ontinental Euro)e due to the Idea of English World 8u)eriority 3ritain+s <ominant Theory about the -odern National Economy The 9oundation of the Euro)ean Economic ommunity ategories within the Euro)ean Economic ommunity Three ?rinci)les . New Era Taking a "ook 3ack to the ?ast and to the 9uture

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0amphlet 231 "ntroduction - $y 0rofessor )r4 5einrich 5un6e7 Economic Committee +d*iser to the #8)+07 0resident of /ermany-s Economic 0u$licity +gency .round the end of $A#A, most of Euro)e was either consciously or unconsciously under the influence of the economic conce)t of England. !(er recent years, howe(er, it has been swe)t out of Euro)ean countries, )olitically, militarily and economically. ?olitically the three6)ower )act has gi(en honour once again to the ancient figures of life, )eo)le and room. It has also established a natural order and a neighbourly way of co6e7isting as the ideal of the new order. The foundation of English economics, which is the basis of the balance of )owers, has been militarily destroyed. .nd economically, a change has come about following the )olitical and military de(elo)ment, the sha)e of which is easy to describe, but whose final significance is (ery difficult to e(aluate. I can only re)eat, that the changing order that is ha))ening now has to be ranked as one of the greatest economic re(olutions in history. It signifies a re(ersion of the economy of Euro)e to a time before the English conce)t of building an o(erseas Euro)e, i.e. an awareness of one+s own country. The )iscussion so far and its esults <iscussions about Juestions relating to Euro)e started as the )ower of the N8.<? grew. .t the ongress of Euro)e in ,ome from $Bth to &%th No(ember $A#&, .lfred ,osenberg de(elo)ed, for the first time in front of an international forum, thoughts and ideas that ha(e mo(ed us since. No one, who fights for a new economic order in Euro)e, can ignore these )erce)tions and conclusions. The economic and )olitical wheel was set in motion, when the N8<.? declared the militarisation of the German economy. It is to the credit of the Kournal *Germany+s Economy+ that it first seized these Juestions in $A#&, ke)t on bringing them u) and stuck doggedly to those original )erce)tions. The idea of German economic self6 sufficiency in the new )olitical sense and the German economic militarisation are synonymous with this Kournal. 3esides this, <aitz, the ambassador, has earned the s)ecial credit of being the first to ha(e related German economic history to the )resent time. ?art II of his selected s)eeches and essays, which a))eared in $A#' under the title *Germany and the Euro)ean Economy+, summarizes his conce)ts formed between $A#& and $A#'. The Italian, arlo 8carfoglio, deli(ered with his book *England and the ontinental -ainland+, a decisi(e historical contribution to the consciousness of the Euro)ean continent. -eanwhile German and Italian economic )olicy drew the )olitical conseJuences from the historical lessons that were learnt during the blockade and learnt again during the sanctions. The s)eech made in -unich in $A#A by the leader of the ,eich+s farmers, ,. Walther <arre, at the :th Great "ecture at the ommission of Economic ?olicy of the N8<.?, takes a s)ecial )lace in the discussion at that time. Its theme was 2The market order of the National68ocialist agricultural )olicy 6 setting the )ace for a new foreign trade order.5

While our leader maintained the ho)e of reaching a )eaceful agreement with England, the route for Euro)ean economic unity remained )roblematic. The end of $A#A was a decisi(e )oint and it was natural that the years $AB%6$AB$ heralded the new economic and )olitical order. The writer, in )articular, de(elo)ed and e7tended in s)eech and writing the intellectual fund of the new economic )olicy, which has been translated into most languages, so that today e(erywhere the great constructi(e te7ts are known. These conte7ts re(ol(e around the following issues= $. &. #. B. Theory about the ,eich and the Euro)ean economy. The historic, cultural, and economic significance of the German economic order. The foundations of the future economic relationshi)s between the states. The nature of the Euro)ean economic community.

!n &Hth @une $AB% the ,eich+s Economic -inister, 9unk, )ublicised in his official ca)acity his thoughts, which underlined the de(elo)ment so far and thus ga(e them state sanction. In !ctober, the Kournal *German Economy+ summarised for the first time the )rinci)les of Euro)ean co6o)eration, the fundamental )rinci)les of German foreign trade, Germany+s e7)ort economy and ways and means of )romoting e7)ort. It did so in a )o)ular re(iew 2.bout . New Euro)e5, )ro(iding an o(er(iew of the im)ortant )roblem of Euro)ean economic fusion. .round the end of $AB% the 3erlin historian 9ritz ,orig finally outlined in his book 2/anseatic Essence5 the historical foundations of the greatest economic and )olitical achie(ement by the Germans. I am clear in my mind that total clarity is to be found in the )rinci)le Juestions= The necessity is recognised for a )olitical order for the economic co6o)eration of the )eo)le. The nature of the new order which is= awareness of tradition, using u) one+s own economic resources, long term economic agreements and fair relations, is affirmed. The economic inter6de)endence is underlined by fate. The economic unity of Euro)e is thus e(ident. Economic Practice E(en )ractical economic life has increasingly allowed entry to new thoughts. I am able to see the decisi(e ste)s in the start and realisation of the following )oints= $. &. In the increasing )ayment traffic through 3erlin. In the e7change of e7)eriences in (arious areas of economic life. Thereto belong also the statements of ministers and business )eo)le, the calls made by s)ecial ad(isers and the collecti(e tackling of im)ortant tasks relating to the

economy. E(en the s)ecialist is sur)rised, once he has taken the trouble to )ut together all the connections. Today they are already legion. #. In the signing of long term economic agreements between the ,eich and the other Euro)ean states, which the )ublic is aware of. There can be no doubt that such agreements are those of the future.

!f course, that cannot )re(ent unclear )oints and new )roblems from arising, which become e(ident at the time when the situation is re(iewed. Problems Related to the Economic $ommunity of $ontinental Euro+e These unclear )oints )rimarily relate to the conce)t of economic direction, the e7tent of solidarity and neighbourly attitude, the de(elo)ment of one+s own )owers, the care to maintain the standard of li(ing and the Juestion of raw material )urchase from foreign countries. It is natural that one or another issue will take )riority of interest, de)ending on the set of conditions that )re(ail. It should be attem)ted at this )oint to gi(e a re)ly, albeit a summary one. There can be no doubt that the conce)t of direction of the economy, or rather its leadershi), is as no(el as it is re(olutionary. Its classification is all the more im)ortant, as the fate and conseJuence of Euro)ean co6o)eration de)end )rinci)ally on a new consistent form of economic understanding. The .nglo6 8a7on (iew of economics is dead= conseJuently, e(en the so6called *classical+ national economy is no longer classical, but it has sur(i(ed. 8o what it comes down to is that a new understanding arises to do with ideology and terminology, which re)resents a sound basis for agreement and co6o)eration. ,elating to this, one must )oint out the following in detail= $. Economic direction is not a momentary emergency solution, instead it forms the core of new theory and )ractice. 9irst of all, it takes the )lace of indi(idual egotism and the automatic autonomy of the .nglo68a7on )rece)t. Economic direction is not identical to the tendencies of a centrally )lanned economy. It does not seek to cancel the indi(idual or to administer through the state o)erators. Economic direction really means the following= the new instruction of the creati(e and constructi(e )ower of the indi(idual in relation to the whole system4 the creation of a consistent economic (iew and an attitude towards the economy4 the selection of im)ortant tasks through )olitical leadershi) and the state+s final decision on all Juestions about economic )ower. 3eyond this, the economy is free and res)onsible to itself.

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The degree of solidarity of the indi(idual economies and their neighbourly attitude is characterised by three guidelines=

9irstly, it is limited in regard to its own economic de(elo)ment by the recognition that the utilisation of indi(idual resources re)resents not only a reJuirement of the new economic )rece)t, but is the (ery foundation for economic acti(ity. The Euro)ean economic community has no interest in lea(ing any abilities or )ossibilities unutilised. 8econdly, it contains the obligation that, because of Euro)e+s freedom, consideration is gi(en firstly to continental Euro)e regarding any matter related to economic acti(ity. Not only should the shared fate of the Euro)ean )eo)le be em)hasized, but the fact should also be stressed that the su))lementation of the Euro)ean economies beyond their borders is )ossible and sought after. Thirdly, it must be maintained that, abo(e all else, the s)irit of the indi(idual economies may not be allowed to go against the s)irit of neighbourly co6o)eration. The Juestion of de(elo)ing one+s own )owers refers to the )roblem of monocultures, of industrialisation of the agrarian south6east and the awakening of new needs. .n answer can easily be gi(en to the first Juestion. -onocultures are the result of the same economic )rece)t that made the world market )rice the determining factor in the economy. .ccording to that )rece)t, )eo)le and land are the (estiges of some by6gone age. Euro)e is well on the way to destroying these monocultures with initiati(es ranging from land im)ro(ements and growing new cro)s to disco(ering new local resources. .ll these ha(e the same aim, which is to de(elo) the economy and broaden its basis. Germany and the whole of Euro)e can only greet these efforts with gratitude. The industrialisation of the south6east )oses a )articular )roblem regarding these Juestions. .s I am unable to handle this )roblem 6 like all other )roblems 6 here in a com)rehensi(e and e7hausti(e manner, because the industrialisation of economies is theoretically a difficult )roblem, I can only say as follows= $. @ust as it is in the nature of things that each country will stri(e to utilise its a(ailable resources for its own )roduction, so will there will be a knock6on effect for other economic )artners. If, as is the case in the 8outh6east Euro)ean countries, there is hea(y o(er6)o)ulation in the countryside, then there are only three )ossibilities to sol(e it= itinerant workers, a )ermanent emigration and an *intensi(isation+ of the local economy, a term correctly created by <r. Ilgner for the )roblem of industrialisation. Itinerant workers can only form a )art solution. 3esides, it only a))lies to agricultural and construction workers and gone on for ages. ?ermanent emigration from Euro)e is Kust as false as im)ossible. There Kust remains the

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intensi(isation of the economies of south6east Euro)e as the way to self6 hel). #. The economies should make it )ossible for an inde)endent life according to the modern economic (iew. The intensi(isation of their economies therefore is right for the time. B. The old features of industrialisation, which e(ol(ed from the )rice colla)ses in countries with agriculture and raw materials, ha(e to now belong to the )ast. Euro)e is a communal li(ing area. !nly through a Koint de(elo)ment of economies 6 and not through inde)endence from one another 6 can )rotection against crises be achie(ed. H. The tasks that ha(e to be sol(ed in Euro)e are so big that the )owers needed to do so ha(e to be released by an intensi(isation of the indi(idual economies. This can be easily done by em)loying the workers that ha(e been liberated in new branches of the economy. Without affecting the difficult Juestions of )urchasing )ower, it can be regarded as )ro(en that the Koint work to build u) Germany+s and the south6eastern states+ in the area of industrialisation lies in the direction of the intensification of interest of the whole continent. !ne im)ortant and until now com)letely o(erlooked task in this regard e7ists and that is the awakening of new needs in the south6eastern countries. It is because, in those countries, wealth has grown and will gradually continue to grow, as a result of the reliable )urchase of agricultural )roducts and a(ailable raw materials at adeJuate )rice le(els. .ccording to the )rinci)le in economics that gi(ing eJuals taking, )eo)les+ li(ing habits there will ha(e to change, otherwise one day the )rocess will come to a halt. Germany+s ability to absorb the )roducts from the south6east is )ractically infinite, whereas creating a demand for German goods there is not only a matter for economic intensi(ation but also one of modifying the )eo)le so they consume more. This task is of such im)ortance that it has to be considered from the (ery outset, so that the south6eastern Euro)ean economies are ele(ated after the war. EJually im)ortant as the industrialisation of south6east Euro)e is the Juestion of the standard of li(ing in the north. Their economic de(elo)ment and high standard of li(ing, which under)in their li(es though all economic conditions, should not be mistaken. This standard of li(ing has grown considerably during the $A th century and around the time of the world war due to free trade, so that (arious circles (iew world economic e(ents with )articular concern. 9rom a German (iew)oint, only the following )oints can be made= 9irstly, a higher standard of li(ing is also the aim of the German go(ernment. The German )eo)le not only understand this well, but also through its fight wants to

ensure Euro)ean ci(ilisation and culture. This fight will benefit the whole of Euro)e, and with it the north. 8econdly, des)ite being connected successfully to England and its economic system Fone should not ignore the countless economic troughs that feature thereG, the economies of the north whose fate and greatness are (ery closely linked to Germany. Thirdly, the northern states+ difficulties are going through a tem)orary )hase of adKustment. In the long term, this will bring about a lasting ad(ancement, rather than destruction, for their economies+ foundations. -aintaining a high standard of li(ing is not an insoluble )roblem. To finish, I now come to the )roblem of )urchasing raw materials from o(erseas markets. . leading south6east Euro)ean economist once wrote about this )rinci)al Juestion= 2Unlike the war, we were in the following situation= in order to im)ort raw materials from o(erseas countries, we bought goods from west Euro)ean countries with foreign e7change. In the area of continental Euro)e there is no gold. E(erything had to )ass through the system of clearing 6 goods sold against goods. We ha(e no )roduct that can be sold to North or 8outh .merica. That means that the leading nations are obliged to acJuire and distribute to us the raw materials that we need. The leading nations of Euro)e can su))ly, with its ca)acity, enough )roducts to o(erseas countries with which to acJuire raw materials. The one Juestion is whether e7change will e(er ha))en0 E(en before the new order is introduced, and without e(en Koining in with the .7is )owers, we stand in solidarity outside Euro)e with its traffic of goods05 We can only agree with this (iew, lea(ing the matter o)en, as the ,eich+s Economic -inister 9unk described, how large the direct sources of hel) will be and whether raw material acJuisition from o(erseas will take )lace through the system of clearing or free flow of currency. With the introduction of the multi6lateral clearing system, on a )ractical le(el there is no change from the )re6war time. .s this learned )erson said, 2.ll the benefits of the method of )aying are regained from the system of free currency.5 Nor can it be realised 6 contrary to him 6 that this system of clearing through 3erlin should function without those countries outside the Euro)ean system. 3ut the decisi(e factor is the way in which the continent is bound to Germany and Italy by one fate. 8ince $AB%, therefore, we are faced with an un)aralleled economic and )olitical re(olution. The )roblems created for us are large but can be sol(ed. Their solution will gi(e Euro)e the )eace it yearns for and will bring a great era of Koint de(elo)ment. It is worth fighting and working for this. The following discourses should contribute to hel)ing us to broaden and dee)en our understanding of the tasks and nature of the Euro)ean economic community.

)he Economic Face of the 4e3 Euro+e

by Walther Funk, Reichs Economic Minister and President of the <erman Reichsbank Today the )eo)les of Euro)e are at a turning )oint in their fate. Without any hint of e7aggeration, one can say that the )roblems, which are )ressing in this war for a solution, ha(e secular significance. What sense could the blood s)ill ha(e, which the allies of Euro)e Koined together with the combined forces of the great German ,eich are )re)ared to make, if not that of creating once and for all a sound foundation for a really social life order. The call and warning is issued to the )olitician, the scientist, the economist from the front line fighters to )re)are the great task of attaining )eace for the future e(en in the midst of war. Real and False Economic Freedom To sum u) the theme in one sentence I would say that the economic face of the new Euro)e will ha(e two identifiable traits, which are already being formed in the fire of war. They are work for the community and economic freedom 6 of course, not the sort of economic freedom that is embodied in ca)italism and leads to the strange )act between )lutocracy and 3olshe(ism. The )eo)les of Euro)e ha(e heard the big )romise of freedom in the liberal6ca)italist economy. Today it is sinking in wretchedness, blood and ruins. What did not the liberalist idea of freedom )romiseM .ccording to that theory of economics, life de(elo)s most fully if all the indi(iduals are allowed to )ursue their own self6interest without restriction. The state can hand o(er the harmonious de(elo)ment of the economy to the forces of com)etition, which each indi(idual should e7)loit for his own self6interest. ,egarding international trade, one e7)ects that gi(en full freedom, com)etition would ensure that each country )roduces those goods best according to its natural )roduction conditions. .ccording to the theory, each nation buys on the world market where they are chea)est and sells its own )roducts with relati(ely high margins thanks to its natural conditions allowing the lowest costs. onsumers can in theory get a su))ly of goods at the lowest cost, businessmen can use their skills freely and workers can find work where(er they find the highest wage. The situation that was sought after 6 social harmony 6 seemed to be most achie(able this way. 8o much for theoryN 3ut what ha))ened in )racticeM Euro)e+s )o)ulation grew in the $A th century Fi.e. in the s)ringtime of liberalismG from $'%m to BH%m ca)ita4 and )eo)le on a(erage could clothe and feed themsel(es better and )ro(ide themsel(es with more goods than before. .ll the same, "iberalism can claim to ha(e dri(en forward technical )rogress a long way due to its )rinci)le of unrestricted )rofit seeking. .lso it can be rightly maintained that the liberal ca)italist economic way for decades )ro(ed to be ca)able of e7isting right u) to World War I des)ite the increasing numbers of

defects. 9ree trade was not, in fact, carried out without restrictions, but the duty agreements on the basis of ma7imum fa(our barely affected trade. 9lows of gold and ca)ital were ne(er restricted4 nor was the mo(ement of labour subKect to any notable restriction. The international gold standard, which England mani)ulated almost unnoticed, enabled an easy mo(ement of money. The (alue of gold followed interest rates and goods followed the world )rice. .s long as the )artici)ants were )re)ared to obser(e the com)licated rules of the game, economic harmony really seemed to e7ist. If we recall the economic conditions that e7isted )re6World War I, all this su))osed harmony did was to gi(e enough elbow6room to those )owers ranged against one another. 9reedom to e7)and, it seems, was the only thing then that )re(ented earlier confrontation between the )owers. The (ast e7)anse of land o(erseas constantly offered new areas of disco(ery. Euro)e+s infinite source of labour was a(ailable not only as the workforce for it but also as the buyer of e(erything )roduced there. onstantly im)ro(ing technology offered a constant flow of )ossibilities for de(elo)ment, hitherto unknown. <es)ite the a))arent eJual o))ortunities there, the indi(idual )eo)le were not able to gain eJual ad(antage from the system, Kust as the indi(idual classes of society were unable to. The English moral )hiloso)hy of /obbes and /ume, which was tinged with a shot of @ewish s)irit from <a(id ,iccardo, has )ro(ed to be an e7traordinarily safe and im)erce)tibly effecti(e means for Kustifying and safeguarding the 3ritish world su)eriority. In the system+s early hey6day, the English had the most ad(anced industry. They entered the race with the biggest )rice ad(antage. .dded to that, they had the biggest commercial and na(al fleet in the world, which enabled them to get started in world trade in such a big way. Thus their economic and )olitical )ower grew. Each concentration of trade o)ened the way for new )rofit. England became the )aymaster of the world, as well as the banker, the manufacturer, the trader, trans)orter and, last but not least, the )oliceman of the world. @ust look at the states of continental Euro)eN Together they could only deri(e small ad(antages from this economic system. E(en the large nations were forced to suffer from the real and e7tended com)etiti(e ad(antage of England. The small nations Kust e7isted to increase England+s wealth and had to be content with a few crumbs from England+s table. 3efore World War I, the south6east Euro)ean states were so )eri)heral for world trade, although they were no worse )laced than many o(erseas e7)orting nations. /owe(er, they could not come into their own. Thus agricultural technology and trans)ort routes were not ad(anced by the de(elo)ments ha))ening in elsewhere in the world economy. Technical backwardness occurred there while the newly )roducti(e nations grew, forcing down the standard of li(ing. There were no buyers, who could constantly buy more and more goods at stable )rices and which was su))osed to lead to in(estment in new machinery and eJui)ment that im)ro(es life. .fter World War I the ca)italist world )owers consciously left these states in their economic backwardness, so they remained )olitically de)endent. It was our deliberate and com)assionate trade )olicy that recently brought about a fundamental change and,

in fact, their trade )olicy has also changed fa(ourably o(er recent years. These states were the first testing ground for our economic and )olitical )rinci)les. We can rightly say that the use of these methods was of great mutual benefit for both sides and became a sound basis of co6e7istence. The debt account of the 3ritish ca)italist era was considerably larger. 8igns of serious economic damage, caused by the effects of the laissez6faire system and free trade )rinci)le, became a))arent among all those connected with it, both the fa(oured ones and the ste)6children of the liberal economic order. 8ym)toms of malaise were the same e(erywhere. .griculture in the industrial nations was inca)able of asserting itself confronted with the interests of industry, trade, bank and stock e7change. The freedom to feed disa))eared, the )osition of farmers became wretched, the )o)ulation fled from the countryside to the city and abroad. The (ery to) class layer of bankers, industrialists and s)eculators could amass huge wealth and, with it, create a dangerous )ower base beyond the state, because money bought e(erything, es)ecially )ublic o)inion. !n the other side, the rank of the industrial )roletariat swelled constantly and was dri(en by increasing dissatisfaction with )seudo6socialist -ar7ism and ommunism. The )re(ailing line at the time 2get rich regardless of the means5 was )robably the reason why all these sym)toms failed to gain sufficient attention and clouded o(er the sight of the facts. ertainly, liberalism was a system for *freedom+. /e, who could no longer find work or food in his local area, had the *freedom+ to emigrate. .nd if the economy of a nation was de)ressed, this nation had the *freedom+ to run u) debts with England. 3ut this ty)e of freedom was of too )oor moral foundation to ha(e been of any real substance. The ty)e of gift made by the English economic )hiloso)hers to mankind with their out)ut of ideas about freedom only became ob(ious as the economic area around indi(iduals and nations became smaller, and as the last reser(es of colonial raw materials were distributed and the fight for sales markets intensified. The liberalist system, that had wea(ed its way into big time ca)italism, then lost its necessary fle7ibility due to cartelisation, )ooling, mono)oly formation and the rising fi7ed costs for industry. onflicting interests started to collide at full s)eed with one another, because they were dri(en by egotism and no longer sought ways to a(oid )roblems. /ow many wars ha(e been waged due to this attitude, this greed, which has wrecked the li(es of so manyM 9or e7am)le, there were the 8)anish6 uban wars that started in $':' and su))orted by the uban s)eculators and North .merican sugar syndicate4 the war between hile and ?eru was all about the salt)etre fields. To finance this war, hile took loans that were guaranteed by Euro)ean bankers, who insured themsel(es with the gains to be made from working these fields4 England+s 3oer War was su))osedly a colonial war, but it was all too cons)icuous how much interest was shown by the gold mine syndicate of -r. ecil ,hodes and those of the "ondon stock e7change in the war+s outbreak and continuation. No wonder e(eryone called it the war between the stock e7change

and the 3oer. The ,usso6@a)anese war $A%B6$A%H was caused by the interests of ,ussian ca)ital in -anchuria and 1orea. 9inally the 9irst World War was the )eak of the ca)italist economic system but also the start of its demise. 8ince World War I Euro)e+s )eo)le ha(e been through a generation of e7tremely hard lessons, which we all know now, and they sooner or later realised, that the freedom ideal of the )ast era was false and )erishable. War, inflation, tough economic crises, hunger and unem)loyment ha(e hammered it into )eo)le that economic sense lies in the fulfilment of a social task 6 not in self6interest and selfish )rofiteering. No wonder then that those )eo)le of central Euro)e, who suffered most under the whi) of an unsocial system, were first to set u) a different freedom ideal of higher morality. We can now see the new ideal of real economic freedom in the safeguarding of food and raw material reser(es, the liberation of the economy from international finance interests and de)endence on economic cycles, as well as in the subKugation of the indi(idual to the )rimacy of the economy. $o=o+eration in $ontinental Euro+e The authoritarian go(ernments of Germany and Italy ga(e their )eo)le the task first of all to in(est their efforts in (oluntary co6o)eration under the state directi(e of the national welfare. Thus they )rotected their economy from e7)loitation by international finance )owers. The fight for the nation+s food and raw material freedom is now a thing of the )ast. The last world war already taught the )eo)le that it is unwise to lea(e their fate to e7cessi(e international di(ision of labour. .t the time, the industrial nations were )loughing the last sJuare metre of unculti(ated land. The mainly agricultural6based countries made haste to become self6sufficient in industrial goods by forcing through industrialisation. In both cases, the result was not satisfactory. In )articular, those industries of small Euro)ean nations )rolonged their un)leasant, and for the maKority, costly e7istence in the )ost6war )eriod by standing behind )rotecti(e duties. They de(oured subsidies, unnecessarily reinforced the international battle between com)etitors, raised the cost of li(ing of their )eo)le and ended u) in the mess of the world economic crisis ; sim)ly because natural reser(es were drying u) e(erywhere. Euro)ean )eo)le could ha(e recognised long ago that they share a common fate with only one logical conseJuence, which is Euro)ean co6o)eration. ?olitically, though, the time then was not yet ready for that. The (ictorious nations of World War I deliberately )laced so much dynamite in Euro)e with the ?aris .greements that it was not )ossible to consider a constructi(e, idealistic )lan. The only )ioneering work )ossible was, for e7am)le, the deliberate )romotion of economic relationshi)s in Germany and the south6east.

9irst the 9ascist and then the National 8ocialist re(olution created the foundation for a new )olitical era and social order in Euro)e. 3enito -ussolini and .dolf /itler, between them, ga(e Euro)e the chance to become truly Euro)ean. Now the time is finally coming when the )eo)le of Euro)e can continue their )ath towards co6o)eration, as they rightly stri(e for economic security. .fter World War II there will be no more tension and grounds for conflict in Euro)e, which might Kustify useless isolation. The economic system will be without the germ in it, such as the .nglo6.merican system, which has caused dramatic disagreements between )eo)le. No Euro)ean nation can attain alone for itself that highest le(el of economic freedom that meets all of society+s demands, as it constantly relies on the )roduction strengths of its nearest and furthest Euro)ean neighbours. The blockading around Euro)e organised by our foe today shows clearly Kust how much indi(idual states are bound together for better or for worse. In a large economic area, a community sharing the same fate holds the nations together. This area, though, is ca)able of feeding, clothing and )ro(iding them with all the necessary goods in sufficient Juantities, moreso when the area also includes the east Euro)ean areas that surround it. Until now these areas were beyond the reach of the historic creati(e forces of our continent. The Euro)ean economic area of the future will be untouched by blockades, so no one will easily dare to attack it. ,ecently I declared that there will no longer be any sense in economic wars. The idea of an enlarged area has been subKect to a degree of discrimination, although it was barely discussed in a serious way. E(en the )oliticians belonging to the English )lutocratic system suddenly ado)ted the idea. They wrote their ideas about large economic areas, which were not and really ne(er should ha(e been classed as ideas. ?ower and )olitical aims sim)ly lay at the root of it all. Nonetheless the idea of an enlarged li(ing area )ro(ed to be ca)able of standing the test of time. I can see nothing that might seriously stand in its way, as the creation of large economic areas follows a natural law of de(elo)ment. I ha(e absolutely no intention of contributing to the economic teaching about the stages of economic de(elo)ment, but I Kust want to draw attention o(er towards an economic and historical )rocess, which shows a strong resemblance to how things are de(elo)ing today. .bout $%% years ago a German economic entity started to be formed out of many regional economies. .s unification of the country was still way out of the Juestion, economic treaties started to de(elo), finally reaching its )eak in $'B# with the German *Ooll(erein+ F ustoms UnionG and bringing with it huge economic ad(ances. What did the situation look like beforeM .nyone )assing through Germany tra(elled on )oor roads and had to )ay countless duties and tolls on his way through dozens of states. Each of these states had its own so(ereignty, financial system and currency attem)ting to form something like its own inde)endent economy. Those

in charge then sim)ly could not understand that their great neighbours, England and 9rance, had ad(anced because they had created an economic area for themsel(es, which corres)onded to the le(el of technology and trans)ort reached at the time. 9riedrich "ist, the great )ro)onent of Germany+s economic union, criticised the situation at that time saying, 2The chances for German industry to rise u) would immense if each factory owner could choose from an )ool of #% million )eo)leN -ining, agriculture and cattle rearing could really take off if each branch of )roduction could take its natural courseN5 !ne of the decisi(e forces, which the small nation ideal finally had to bow to, was the re(olutionising effect on the economy and trans)ort of technical )rogress, es)ecially the steam engine. If we say Euro)e now, instead of Germany, then we come naturally to a similar, if not identical, conclusion 6 from a )urely economic )ers)ecti(e. !nce again it is the economic and technical )rogress, which )ushes ine7orably to the formation of large continental economic areas. Today technology offers )ossibilities, which cannot be fully utilized by indi(idual national economies. Nations+ borders ha(e been brought closer together by the increased s)eed of trains, the e7tension of the road network and waterways, the transcontinental energy su))ly, which offers so much )otential and, abo(e all, the aero)lane. !utside Euro)e, huge economic areas are already, or are in the )rocess of being formed, from a combination of these factors. 9or its own good, Euro)e has to be dragged out of its romanticized backwardness. The difficulties, of course, of a Euro)ean economic union are larger than those that had to be o(ercome by the German ustoms Union. The means will be difficult and more com)licated, and it certainly will not be achie(ed Kust through a customs union. Nonetheless, there will be a Euro)ean economy entity because its time has come. Euro+es Resources and $om+letion If one recalls the natural resource of our continent, it becomes ob(ious that Euro)e is actually an economic area ca)able of meeting most reJuirements. I am not going to go into details here, but Kust touch on some basic )oints. 9irst of all, e7cluding the erstwhile so(iet6,ussian areas, our continent )roduces sufficient Juantities of the essential industrial materials i.e. coal, iron and aluminium. "ooking at the agriculture resources a(ailable, there is also )lenty of food a(ailable. -any )eo)le may think it sounds im)robable that in $A#A around B:.B million tons of wheat and &B.'m tons of rye grew on Euro)ean soil. These figures again e7clude the )roduction of the 8o(iet Union, but we know for sure that $%m tons of cereal were )roduced there. This figure could be much more if the means of )roduction there were brought in line with the new technology. Where(er Euro)ean soil has been treated all to badly by Nature, the imagination of its )eo)le has managed to seek and find new solutions. I recall those areas in which Germany has e7celled, such as rayon, oil )roduction from coal and synthetic rubber. What we lack will be secured through this war in the east of Euro)e. E(en today, we ha(e a large and (aluable )art of 8o(iet ,ussia in our )ossession and we are directing all our energy into o)ening u) this area so rich in raw materials. "ater we will ha(e the task of

creating the )olitical sha)e of the eastern area, but firstly the )eo)le will ha(e to be ado)ted into the Euro)ean economic system. They too stand to )rofit from the good deeds done by Euro)ean ci(ilisation. The maKor tasks we need to sol(e are truly Euro)ean tasks. E(en today Euro)e looks eastwards and the huge arsenal of so(iet wea)ons gi(es an idea of Kust how much natural reser(es that area can yield. If the rich soil there can be rendered usable with the modern tools of Euro)e+s food agriculture technology, then Euro)e will definitely not be touched by blockades. In addition, the tro)ical colonies of .frica will offer us all those lu7uries that are unnecessary for sur(i(al, but which make life )leasant and ought not to be withheld from a )eo)le with a high standard of li(ing. .nd finally, we will ha(e global trade, which will hel) to ensure that misunderstandings no longer arise. 3ut it will look different to trade system, which degenerated into utter confusion and sim)ly enabled a few )owers to gain a )osition of world su)eriority. The economic )roblems in east Euro)e will ob(iously not Kust suddenly be sol(ed by us securing these areas and raw material reser(es. /owe(er, we ha(e )ut together statistics showing a reasonable amount of economic ca)acity, which has yet to be )ut into )ractice. We ha(e to mobilize e(ery a(ailable raw material and energy in the economy of Euro)e 6 this is the task of the new economic order facing us now. Naturally, a new order that is )erfect cannot be created straightaway, but o(er the years it will be )ossible to match su))ly and demand in the entire Euro)ean area to a remarkable degree. Then, according to the )lan, it will be )ossible to )ut the finishing touches to e(erything and we will get on with the task of o)ening u) hitherto neglected areas of )roduction. 9or e7am)le, I am thinking about how we successfully achie(ed much higher yields and we will continue to do so by a more intensi(e use of the countryside. Those areas of Euro)e that are still backward ha(e to be encouraged to bring about an intensi(e economic system. The industrialisation of these areas will undoubtedly continue, but with the difference that each nation will create its own industry, which best suits its own natural )roduction conditions, as well as meeting the needs of the Euro)ean market. .lready detailed negotiations of the (arious Euro)ean nations ha(e taken )lace along these lines. We will one day tackle the )roblem of the rationalisation of the Euro)ean economy and I belie(e that, after consolidation, we will achie(e )roduction increases that are unimaginable today.

!irectin# of the Economy by the 'tate and Work bet3een the 'tates of the $ommunity The mo(ement of goods between the nations will not yet be regarded as home trade as it is still too )remature to consider a total remo(al of duty and currency barriers. .s a large trading area, though, it will enKoy all the )ri(ileges of a market under state direction. The ,omanian farmer, the Norwegian timber dealer, the <utch gardener and the <anish fowl breeder will no longer worry whether they will sell their )roducts or if they will get an adeJuate )rice that is commensurate with their efforts. They will know that inter6state agreements will determine and secure )roduction and sales, and that s)eculators and crises are a thing of the )ast. 8)inning com)anies in the ?rotectorate, 9rench chemical workers and 3elgian miners will no longer li(e in fear of low wages and unem)loyment. They will be reassured that the Euro)ean economic area contains a wealth of technical and natural )ossibilities, as yet unta))ed and, furthermore, that the demand for goods in this enlarged area will ne(er dry u). The word 2unem)loyment5 will cease to e7ist in the Euro)ean economic dictionary. 3usiness circles today offer )ositi(e e7am)les of work between the nations. Think how Germans and Italians work together and about those agreements between German, Italian and 9rench car industrialists. Think of the German69rench institutions in the chemical industry, the (arious community enter)rises between Germany and /ungary, and ,omania, 9inland, /olland or Norway. @ust think of the truly Euro)ean agreements in the field of cellulose )roducts, artificial silk, rayon and )a)erN !r the orders )laced by German industry in 9rance, 3elgium, /olland, or the commodity markets and the technical fairs. .ll of these forms are e7)ressions of )ri(ate initiati(e, which I wish to stress. /ere the entre)reneurial s)irit finds )lenty of o))ortunity to show itself. I stress this )articularly, as the )osition of the entre)reneur in the directed economy is a Juestion that is freJuently mentioned but not addressed in a )ro)er and accurate way. "et us not be mistaken that this system of economic co6o)eration de)ends to a large e7tent on state directi(es and to a greater e7tent than entre)reneurs in many Euro)ean states ha(e been used to until now. The e7am)les cited here and Germany+s internal economic )ractice clearly show that the state can and will lea(e the entre)reneur to )ro(e himself in the directed economy. If the direction of the economy by the state and inter6nation agreements create a form of economic mo(ement that is like a motorway eJui))ed with all sorts of safety features, such as control of raw materials, of )roduction, sales, de)loyment of labour and an e(er more refined )ayment and clearance system, the result would be that on these roads only the barrows of a ner(ous bureaucracy and e7cessi(e collecti(ism would dri(e around. ,emaining with this analogy, the mo(ement of goods has to remain a matter for )ri(ate entre)reneurs, )ro(ided communal issues do not reJuire state inter(ention. It is left to his initiati(e, his s)irit of disco(ery, to

achie(e the highest )erformance for his economic (ehicle, which is only )ossible if initiati(e is left to him. /is Kob is to be careful that the flow of traffic does not get out of control, while ours is ensure that the dri(ing licences of those undisci)lined road users+ are remo(ed, who Keo)ardise the flow of goods due to a lack of conscience or to ignorance. Indeed entre)reneurial initiati(e has no boundaries and although this century+s com)licated economy does need state direction, it cannot do without the dri(ing force of entre)reneurial acti(ity. It is absolutely understandable from a human )ers)ecti(e that the initiati(e of an entre)reneur is awoken and stimulated by social conscience and sense of community, as well as by the desire for adeJuate )rofit for his efforts. ?ro(ided he in accordance with the state+s economic order and res)ects the general rules of traffic, he should be a))ro)riately rewarded. The rele(ance to the German economy )ro(ides a clear e7am)le to other )eo)le, whereby the )rinci)le of achie(ement has become reality through a great number of laws. 9or e7am)le, there was the state )ricing )olicy for )ublic tenders. This successfully o(ercame the model of )ricing based on )rime cost which inhibits )erformance, managing to em)hasise e(en more )owerfully than before the )rinci)le of achie(ement. This was done by rewarding )ri(ate initiati(e and gi(ing recognition by )resenting awards. The leaders of the state economy may not ha(e been able to )erfect this regulated form of com)etition, but on a )ractical le(el they came (ery close. The obKecti(e remains to allow a )articular achie(ement to be rewarded with an a))ro)riate increase in )rofit and to sto) cost wasting from taking its )lace. Where com)etition is concerned, I will do whate(er I can to su))ress and fight against all such signs. This is the only way that the )eak of economic de(elo)ment can be reached, which we stri(e for by combining the forces of state and entre)reneur. 9or this alone, will offer a secure foundation for social and )olitical )eace. )he Mo&ement of Payments bet3een the 'tates and Euro+ean $urrency (ssues This is another )roblem, one whose difficulties are mostly o(erestimated, but which is Kust as clear and easily sol(ed as the one dealt with abo(e. We ha(e e7tensi(e )ractical e7)eriences in this field so that we are able to imagine the (iability of a )articular route chosen. In the Euro)ean mo(ement of )ayments a settlement reJuirement regulated between the states has been im)osed in the form of multi6lateral clearings on the )rimiti(e bilateral )ayment method. The strict bilateral settlement, which came about as an emergency measure with the colla)se of the gold standard, brought about an e(en more dangerous tendency of reducing commercial trade. .lready today, this serious defect has been o(ercome by the

technology of multi6lateral )ayment (ia a central clearing )oint. This mo(ement of )ayments still stands some way from its ideal form, but it will be )ossible to gradually demolish the regulations relating to the mo(ement of goods and ca)ital, which still e7ist and were created )artly by the war. .s soon as the e7change of goods and labour between the nations comes into )lay under different conditions, its success will be greater )ro(ided it is under the framework of constructi(e and long6term trade agreements. -oreo(er, the mo(ement of )ayments will be subKect to such a minimum of state control that any uncontrollable, international mo(ement of ca)ital does not effect the )lanned direction. @udging by the )resent conditions, the clearance system has a maKor weakness. If a country+s im)orts e7ceed its e7)orts, then clearing )eaks start to de(elo), which can cause )roblems also for clearance under certain conditions. .n oft6cited e7am)le is the clearing debt of Germany. 9irstly, the debt figure Juoted is mostly higher than it actually is and this accounting mistake comes about because it is not sufficiently considered that )ayment dates for two6way deli(eries go awry. The decisi(e )oint is this, that Germany has managed to create the (ictorious army with the finest soldiers and wea)ons in the world from its own working classes with which it will kee) guard o(er Euro)e. .t negotiations about clearing )eaks I ha(e constantly stressed that it is totally wrong to treat Germany as if it is an unreliable debtor. <ue to the war our im)ort reJuirement has grown and will continue to do so, and our )roduction of consumer goods for e7)ort has to be adKusted. Those are sim)ly the conseJuences of war, but it will be different in )eaceN !ur system, in itself, is in no way affected by these things and they do not )ro(e that our system is wrong or that it does function. !f course, long term )lanning in the free Euro)ean economy will make clearing )eaks and trade balance )eaks ine(itable. 3ut those nations with a strong economic ca)acity will be called u)on to bridge these )eaks until they are offset, )ossibly through in(estment amortisation. Germany is ready to hel) in this way. It will be able to do so, because it will ha(e grown and de(elo)ed to such an e7tent that it can absorb all the Euro)ean goods and its e7)orts will be boosted enormously ha(ing secured raw materials and )roduction facilities that ha(e been freed from the war effort. If the threat of Euro)ean wars can be banned once and for all by our final (ictory now, Germany will easily reach and e7ceed its $A$# e7)ort figure of $% billion -arks. .nd in foreign trade Germany will be able to offer secure su))ort to the nations of Euro)e and dis)el their worries concerning their currencies+ e7ternal (alue. !nce again business on credit terms will start again and banks will find normality in e7)ort trade. "est something fundamental is forgotten here, I ha(e to em)hasise the fact that currency stability always de)ends on a currency+s internal (alue. The war ine(itably causes an imbalance whereby the )roduction of

consumer goods gets slows right down or e(en sometimes sto)s. 3ut elsewhere, total )roduction grows due to the huge war reJuirement, which causes money su))ly to grow. -y theory is that if there is )lenty of work, )lenty of money will be generated. !ther factors, though, are at )lay here. learly a larger nation, such as Germany has become now, needs a much larger amount of money to meet its )ayments. Through the war )ro)erty assets and therefore ca)ital will be con(erted into gold. E(en gold acJuires )urchasing )ower now, which remains unco(ered during the war. .ll nations are faced with this )roblem today 6 not Kust those waging war. 3y the effecti(e means of a directed economy, )articularly by regulating )rices, we ha(e managed to maintain a stable currency and we will continue to do. This is the right way and one co)ied by other nations during the war with (arying degrees of success. 8omehow )rice control tends to be )roblematic, but we in Germany had a fa(ourable starting )oint. <ue to National 8ocialism+s education work we ha(e a disci)lined )o)ulation, an economy aware of its res)onsibilities and a ca)able, informed and incorru)tible ci(il ser(ice, unlike other countries, whose success will reflect the e7tent to which these conditions are met. The )rinci)le, howe(er, remains the same. In the long run, there is only one alternati(e= either kee) )rices steady or face inflation. The )olicy on )rice control is not the only means of maintaining national stability. It also needs a fair wages )olicy. . strict and ascetic )ublic and )ri(ate s)ending )olicy is also essential, but, abo(e all, a reasonable control of )roduction and sales, as well as money, credit and consum)tion. We manage all these factors so thoroughly that no shocks ha(e ha))ened. Nor will they because we realised early on what was reJuired controlled e(erything with all the nation+s means, in order to create order at the right time. 9inancing the war of course relies hea(ily on ta7ation, which is the only way we could at last remo(e )urchasing sur)luses. !n the other hand, we ha(e always taken care to a(oid o(erta7ing for social reasons and to )reser(e )eo)le+s moti(ation. The Economic -inistry has been e7tremely careful about this )recise )oint. -oney e7cesses should not be allowed to loiter around markets, but should be used u) as credits and made a(ailable for financing the war. The huge sa(ings increase has shown the German )eo)le+s firm belief in these methods. With these means that we ha(e de(elo)ed, we ha(e reached a rather more tricky area and I recall here the *Iron 8a(ing+ and *9actory In(estment redit+ schemes. @ust holding )rices firm, though, on its own is not the solution, rather it is half of it, because the e7cess of )urchasing )ower caused by the war will ha(e to be met later by consumer goods. !therwise the )ressure on )rices would be such that de(aluation would soon follow the end of the war.

In Germany we ha(e no such fear. That is because if we can )roduce immense Juantities of goods for war use, then we are eJually ca)able of )roducing consumer goods in order to catch u) on what was missed during the war. This )roblem can be sol(ed not only for Germany, but for all nations. 3asically all that is needed is adeJuate labour and raw materials. .fter the war, workers will be automatically freed and raw materials will ha(e been secured by the war 6 those to be found in east Euro)e and the colonies. Increasing im)orts and chea) labour will be a firm basis for the currencies. !ne should always consider this connection between currency stability and additional raw material acJuisition and a(ailability of labour. The )erson who realises it will ha(e no fear of a threat to our money. 9urthermore, there will be e(en more of an unburdening. In these newly acJuired areas, mines will be set in motion, large industrial )lants o)erated, areas of land will be a(ailable in certain areas for settlement, trade will find maKor de(elo)ment o))ortunities and much more. The right thing will be basically to lea(e most of these tasks to )ri(ate initiati(e. .ll Euro)ean nations ha(e easily enough ca)ital for this today. There is no doubt about Euro)e+s will to in(est. Good yields will be there to be enKoyed. The significance in currency and )olitical terms is that these aforementioned e7cesses can be di(erted into sa(ings accounts, whose gains will ha(e started to become a))arent e(ent during the war. .fter it, they will hel) to bring a reco(ery to Euro)e+s economies and their currencies. Economic reco(ery here will be the foundations for the restoration of international currencies. . sensible control of e7)ort would also work on this )rinci)le. It will be no easy task to create a balance between the currencies of Euro)e, which ha(e suffered due to the war, and then to do so in relation to those outside Euro)e. The only way is to establish order in the economies and thus for the internal (alues of their currencies. Then e7ternal (alues can strengthen by bringing about co6 o)eration in economic )olicy. No solution is to be found in gold automatism. We, in Germany, will certainly not try the so6called gold currency, which lost all significance after the last World War. In fact, it could subKect our economy to uncontrollable international influences and become misused as a way of grou)s intent on su))ressing )olitical )ower. !ther Euro)ean nations will not close their eyes to this fact and benefit from it. !f course, we recognise that gold as a commodity can hel) to offset )eaks in international trade and I often re)eat that gold in itself is neither good nor bad, it Kust de)ends on how it is used. Nor are we against healthy trade with o(erseas nations. E(en if in our own colonies we had all the im)ortant raw material a(ailable to us, we could still calculate some ad(antage to be gained from buying elsewhere more chea)ly or through lower trans)ort costs. The one thing we will certainly a(oid is the old style

of the world economy. We know only too well how this model is de)endent on an o)en or (eiled .nglo6.merican world domination and that it is synonymous with inconsiderate e7)loitation of the German )eo)le and )olitical im)otence. 3y creating a Euro)ean economic bloc, we want to )rotect oursel(es from this system. 'ecurin# the %rea and Economy of Euro+e Two )re6conditions need to be e7amined here that ha(e more to do than Kust with economics. They relate more to the )olitical and ethical arena in which a fruitful and lasting Euro)ean economic community can be established. The first one is securing the area and economy of Euro)e, which is where we find oursel(es today. "ast year, though, we made a good ste) forward= for the first time in history, the )eo)les of Euro)e Fwith few e7ce)tionsG showed e7em)lary solidarity by resisting the biggest threat to their life and culture. -ost economies of Euro)e had to be controlled in a highly uniform manner and furthermore their sons fought shoulder to shoulder for the same cause. This is clearly a )olitical success and a ty)e that our enemies cannot beat or e(en match. I wish to em)hasise this e7)licitly because recently the English and more so the .mericans are turning out grotesJue )ro)aganda about their alleged su)eriority. Therefore I want to tackle things critically again with you. The "eader said in one of his latest s)eeches= When you read in the )a)er about the huge )lans of other nations and you hear of the billions being talked about, Kust remember these words= $. &. #. We too ha(e a whole content that we can )ut into ser(ice. We talk about workers, not about ca)ital, and we will em)loy e(ery one of them. @ust because we do not talk about it, does not mean that we stand still.

What the "eader was saying with regard to enemy )ro)aganda has already ha))ened to an e7tent, which must astonish the )erson who has long had the .merican disease of being swe)t along by record figures. We know that the .mericans are su))osed to ha(e the biggest, the best, the widest, the longest, the fastest etc. ?resident ,oose(elt has o(er )romised on all these. -oreo(er, he had strong reasons for doing so, since he had to offer his )eo)le something while he announced a huge ta7 increase at the same time. .t last, he also had to offer some consolation for the )ainful losses wrought on the U8. by the sudden @a)anese strikes at ?earl /arbour. Then he Juoted figures about e(erything the U8. could )roduce in the future. 3asically, these figures are

ridiculous to a s)ecialist, let alone to any com)etent obser(er. /e reckoned it was barely )ossible for the )ublic to get access to )recise information about the )roduction ca)abilities in the U8.. .lso the thought that it would be e(en more difficult to draw com)arisons with our )roduction )ower because a (eil is drawn o(er the )roduction of e(ery war material. -r. ,oose(elt belie(ed it to be easier to decei(e a nation whose (ery religion contains the belief in the su)eriority of their own ability to )roduce and whose belief was they should s)read this myth around the world. E(en -r. hurchill li(es and breathes this myth. 9or Euro)ean )eo)le who are able to think, there are ha))ily some bright factors with which to Kudge those )ersuasi(e figures, which ?resident ,oose(elt indulges in. )he Will for $o=o+eration in the Economic $ommunity The second of the two )reconditions I mentioned for a lasting economic unity was an ethical one. The will to achie(e Euro)ean co6o)eration, as is )resently being seen in the war conditions, has to be the leading thought of economic )hiloso)hy, e(en in )eacetime. This reJuires a constant effort to gras) the big obKecti(es and tasks and ada)t to them, and a willingness to subKugate )ersonal interests when necessary to those of the Euro)ean community. That is the ultimate goal that we demand of the Euro)ean nations and that we stri(e for. There will be (ictims here and there but the end result will benefit all the )eo)les of Euro)e. Unlike England, our concern is not to make our trading )artners as weak as we can 6 Juite the o))osite. Not only to we )ay the costs for their agricultural de(elo)ment in the form of higher )rices, but we also )romote eJually a reasonable degree of industrialisation, e(en if it a))ears we are creating new com)etitors. That is only how it seems. Dou see, we know that an industry creates a need for in(estment that is tem)orary, but which gi(es rise to new needs, im)ro(es the o(erall standard of li(ing and therefore benefits our economy. This kind of economic )hiloso)hy reJuires a social conscience and the )eo)le of Euro)e can and must demand an awareness of social res)onsibility from their leaders so that they bring about a new economic order. The new Euro)ean economy+s first task will be to fulfil their social duties. This war is not Kust about a new economic order, it is the scene of a social re(olution. 9rom the noblest blood s)ilt, a better social order for life in Euro)e will and must grow.

0amphlet 232

!e&elo+ments to3ards the Euro+ean Economic $ommunity

$y )r4 5orst 9echt7 0rofessor at the Berlin 8chool of Economics )he Euro+ean Economic $ommunity and its Enlar#ement Euro)e is about to gain economic unity and inde)endence as a result of fighting this war. -y task is to demonstrate the historic de(elo)ment which has led to the )resent )osition o(er the )ast thousand years or so, which we )robably all agree is the turning )oint in Euro)e+s fate. It could actually a))ear as if the magnitude and singularity of the decision being faced make such deliberations unnecessary. 3ut to a))reciate the s)ecial situation today one has to understand the )ast and this a))lies to the Euro)ean economic community. Its conce)t is e7)ressed in the creation of an enlarged economic community. E(en with a retros)ecti(e look at things, we need to demonstrate whether and how such an enlarged economic community has e7isted before in Euro)ean history. I consciously use a word here, which is freely used in modern literature and bears a truly undefined character, in order to draw on notions familiar to us. 9irstly, though, I want to describe where I find the identity of such an enlarged economic area. -anaging any economy reJuires the a(ailability of room to form a basis. The nature and characteristics of that area, its abundance of agricultural and mineral )roducts and its trans)ort situation are as influential as the effects of economic acti(ity on the formation of economic life. We can talk about economic landsca)es in regard to the close relationshi) between economy and room, in the sense of a uniform creation of an economic life in a defined geogra)hical area. The term *enlarged economic area+ we understand to mean the combination of economic )rocesses o(er a wide area of the world, which go to create this ad(anced form of economic unity. In figurati(e terms then, the formation of economic entities in an area, which differ significantly from other economic ones. Two things are necessary for the creation of such a uniform economic area. 9irstly, a certain degree of economic integration within a gi(en area. ?ut another way, the way in which it has go(erned its economic life for hundreds and thousands of years has to be o(erthrown and has to be left behind. 8econdly, a certain unity of )olitical order, in )articular, has to bring together all economic features of this area. This does not mean in e(ery case the subKection to the uniform, single will of the state. 8uch communal order is Juite )ossible in the form of (oluntary co6o)eration between inde)endent nations while recognising the )olitical leadershi) of one )eo)le and state whether Euro)e has e(er created, is creating or will e(er create an economic area, is only now becoming a hotly debated issue.

)he Problem of the Euro+ean Economic %rea in 5ate %nti>uity and the Middle %#es "et us start our consideration at the )oint where, for the first time in Euro)ean history, a truly significant economic area, in the way we understand one, was seen. This was in the time of "ate .ntiJuity in the -editerranean area. The ,oman Em)ire of the first centuries of our chronology re)resents an enlarged economic area which s)anned far and wide and generated a significant amount of economic traffic, stretching from the .tlantic !cean to the 3lack 8ea, from North .frica to the north of the 3ritish Isles. The (arious )arts were held together by a high degree of free trade and )olitical unity of the ,oman state. This area was self6sufficient in all of the im)ortant basic commodities and stood only loosely connected to the other areas known then, )articularly the ancient ci(ilizations of India and hina, central .frica, Northern and Eastern Euro)e. The intensity and e7tent of economic acti(ity in the ,oman Em)ire of the first few centuries remained constant and of such a nature that one can already mention the term Euro)ean economic area. Not Euro)e, rather the region of the -editerranean basin which includes im)ortant areas of the north6east and North .frica, was brought together into the framework of the ,oman Em)ire. E(en from the Bth century .<, long before the colla)se of the western ,oman Em)ire, this -editerranean economic form had started to decay, as autonomy became granted to the (arious regions and a natural economic way of li(ing was re(erted to more and more. The historical nature of the so6called -iddle .ges is seen as different as the areas of central and Western Euro)e lose their characters as )eri)heral zones and start to assume influence o(er Euro)ean de(elo)ment )olitically, economically and culturally. This is the first time one can talk of a *Euro)ean+ economic history. ?olitically, the basis for the formation of a uniform economic area u) to the /igh -iddle .ges was not fa(ourable at all. The arolingian Em)ire ga(e )owerful e7)ression to the idea of unity in large areas of Euro)e, as it was then, and e(en the entire hristian !ccident. The German Em)ire, though, restricted to an immediate region o(er the centre of Euro)e FGermany and ItalyG, assumed )olitical leadershi) of the !ccident e(en in its hey6day. 3ut in these centuries of uniform )olitical Euro)ean order, the )reconditions for a closer economic consideration were not yet met. .s recent research has re(ealed, im)ortant (estiges of a barter and trans)ort economy ha(e been )reser(ed, )articularly in the western and southern regions of Euro)e. /owe(er, they lacked the strength to alter significantly the mainly )arochial and inconsistent character of economic life. It is not )ossible to talk of an intensi(e economic integration of large areas of Euro)e then until after the crusade mo(ement had started and the s)read of urban settlements and economic entities. .t the same time, )olitical unity in Euro)e

started to fall a)art. The whole Euro)ean order that had e7isted crumbled with the s)lit of Germany and Italy after the later 8taufer )eriod and the recent internal disintegration of the em)ire. The following centuries see the arri(al firstly from the West, in this )olitical (acuum, of new and inde)endent bodies of the de(elo)ing nation system of Euro)e, which to the )resent day ha(e formed the biggest obstacle to a Euro)ean economic community. In these centuries of gradual decay of the old )olitical order and of the first, though faltering, beginning of the new nation system we see in the north and south of Euro)e, the golden age of two trade and trans)ort systems o(er a wide area which in no way re)resent a )an6Euro)ean economic order. Det they ser(e our interest today as attem)ts at an economic area formation in )articular areas of Euro)e. The Italian cities, first of all, drew rich benefits from the intensification of trade with the east as a result of the rusades. These cities became the su))orters of the im)ortant global trade in )roducts such as s)ices, silk, etc. from the Near and 9ar East. >enice rose to become the richest city in Euro)e at that time. The area around the eastern -editerranean hitherto ruled by .rabs and the 3yzantine became )art of the Italian cities+ trade and economic area in the late -iddle .ges. These cities incor)orated the areas both commercially and to an e7tent )olitically into their area of rule with the hel) of a dis)arate system of trade colonies. Under German leadershi) in the area north of the .l)s, a similarly intensi(e trade and trans)ort network de(elo)ed. !n the one hand, it was already engaged in intensi(e trade with northern Italy due to the trade with the East, but its real acti(ity and lasting historical achie(ement reaches in to the east of Euro)e. The areas furthest to the east were connected to the Euro)ean economic culture for the first time. It was then that )eo)le settled again in areas of east Germany and, which became incor)orated into the system of trade go(erned by the cities. The German businessman then reached further beyond his borders into ?oland and ,ussia. It is necessary, in this regard, to recall the s)ecial achie(ements of the /anseatic cities. This alliance of northern German cities shows most im)ressi(ely what the German entre)reneurial s)irit is ca)able of achie(ing where large areas are brought together into an economic entity. The boundaries of the /anseatic area were marked by No(ogorod in the east, 3ergen in the north, 3rugge and "ondon in the west and its centre in the 3altic area was in "Pbeck. Its economic function was to bring together those countries in east Euro)e bearing sur)luses of raw materials and cereals and the commercial areas of 9landers, 9rance and western Germany. It will be difficult to a))reciate the achie(ements of the /anseatic "eague if one only considers its raison d+Qtre in the commercial field as a trading mono)oly. ,ather the /anseatic businessman encouraged and organised )roduction in those countries with which he traded. -oreo(er, he was the su))lier and disseminator of German culture 6 a coloniser in the best sense of the word. .ll that through the )eaceful means of trading. No foreign li(es were lost, as ha))ened when the colonial )olicy

of the western Euro)eans, es)ecially Great 3ritain, entailed both )olitical and military subKugation. Recent $han#es to the Problem of the %rea of Euro+e The dawning of the modern age, bringing with it a multitude of far reaching changes, led the economic life of Euro)e gradually but ine7orably down new a(enues. In relation to our )roblems, one can s)eak of almost a re(olution taking )lace at that time in the way areas for li(ing were regarded. This was most clearly e7)ressed by the e7tension of the natural scientific world following the great (oyages of disco(ery. EJually im)ortant are the effects of the changed idea about li(ing area both in terms of nation and economy. There were three maKor changes= $. &. #. The formation of the Euro)ean nations into a geogra)hically defined area both in a )olitical and economic sense. The de(elo)ment of a trans)ort system from a Euro)ean one into an inter6 continental one. The growth of the 3ritish Isles into a )redominantly sea )ower and the related, so6called free, world economy.

)he Formation of the 4ations and (nde+endent Economies Now to the formation of the world of the Euro)ean nationsN /ere we are talking about the internal and e7ternal so(ereign )ower structure, which had determined Euro)ean history to the )resent today. The )rocess of change has decisi(e im)ortance for the continuation of economic de(elo)ment. The traditional system of a )an6nation and su)ra6nation economic organisation, as embodied by the /anseatic "eague, can no longer be reconciled with the will for inde)endence of the new nations. The clash with go(ernmental )ower led to the loss of the most im)ortant foreign trade )ri(ileges, as was the case with the /anseatic "eague. This )rocess was seen most clearly in the su))ression of German businessmen in "ondon. In $HA' we finally see the closure of the 8tal ourt, one of the most im)ortant /anseatic bases in "ondon. The sha)ing of economic life 6 the other side to this de(elo)ment 6 now comes from the state. @ust as it )ut the army and ci(il ser(ice into ser(ice in order to achie(e its )olitical ends, so it did also with the economy. Economic life in Euro)e breaks down into a row of adKacent, but inde)endent economic bodies, Kust as ha))ened in the )olitical arena. This )osition should not be understood as com)lete autarchy for this *mercantile+ state framework. Trade between nations now starts to intensify and a hostile attitude in the economic field becomes decisi(e, turning into what we call the on6going economic war, which continued at that time between the indi(idual )owers. The trade )olicy of the time also re)resents the continuation of war by other means. The decisi(e factor in all this is

that an all6embracing )rinci)le of order is missing from the relationshi)s between the economies of Euro)e. ?&erseas E*+ansion and its $onse>uences for Euro+e .t the same time as this de(elo)ment of adKacent go(ernmental economic bodies, we see the second fundamental change, which is the de(elo)ment of inter6 continental trade trans)ort. Its foundation lies in the e7)ansion of the Euro)ean economy o(erseas following the disco(ery of .merica and new sea routes. In relation to this economic and mainly )olitical conJuest of o(erseas territories, the term *euro)eanisation of the world+ has been coined. The eJuilibrium, which )re(iously e7isted between the continents, seemed to be dis)laced by Euro)ean su)eriority. In reality, this rarely )eaceful e7)loitation of the world had nothing to do with a common Euro)ean )rocess, such as the rusades, which were, in a way, an e7)ression of a certain Euro)ean solidarity. ,ather it was all about the isolated and egotistical action of indi(idual Euro)ean )owers. The fiercest wars were waged in order to gain )ossession of the colonies. !ne can say that all the im)ortant Euro)ean wars in that century were sim)ly the Euro)ean analogy of these battles to di(ide u) the world. !ne after another, the two nations of the Iberian )eninsular, then /olland, 9rance and finally the e(entual (ictor Great 3ritain rose u) from these wars as leading colonial )owers. 3oth in war and )eace the indi(idual nations watched this e7)loitation of the colonies full of distrust and enmity, which were bent on gaining a trade mono)oly with its colonies. The colonial )owers+ relations with o(erseas areas grew more im)ortant than their relations within Euro)e. This only a))lies, though, to the leading .tlantic )owers in Western Euro)e. . )arallel to this de(elo)ment is the nascent e7)ansion of ,ussia towards 8iberia and on to the ?acific, thereby confirming its identity as a half6.sian )ower. -iddle Euro)e, on the other hand, at first had no share in this economic e7)loitation of the world due to )olitical weakness and in s)ite of being the natural centre )oint of the continent in the -iddle .ges. -oreo(er, she was dealt a hefty setback by the com)etition from the new o(erseas countries. !ur linen industry is a well known e7am)le, which used to be the most im)ortant e7)ort industry in early times and whose colla)se was finally sealed by the ad(ance of foreign cotton. The outbreak of World War I meant changes to )roduction, as well as consum)tion. In southern Euro)e those nations that had been based on rice, cotton and sugar )roduction since the -iddle .ges fell (ictim to com)etition from western India. Italy+s economic regression, caused by the change in sea routes, accelerated by the shift of )roduction o(erseas. !(erall this e7tension of inter6continental trade, which started after the modern age, re)resents a )rocess for Euro)e that demolishes the traditional Euro)ean economic order and strengthens the de(elo)ment that arose from the formation of the nations of Euro)e. The $Ath century, es)ecially the middle )art of it, only brought to an end what has started in the )re(ious centuries. This age has been called *The .ge of

the Global Economy+ when attem)ting to e7)erience again a late hey6day in the years between $A&H and $A&A. <uring this time economic relations between continents reached their )eak. Euro)ean trade es)ecially between the de(elo)ed industrial nations of western and central Euro)e increased considerably, none moreso than in the direction of the outer regions of Euro)e. The title used F.ge of the World EconomyG is Kustified when one considers the )rofound change in economic relations between Euro)e and o(erseas. !n the one hand, western and central Euro)e only now attain that technical su)eriority that transforms it the world+s worksho). !n the other, at the same time it meant that Euro)e became de)endent on im)orts from o(erseas regions, more than e(er before in the )ast. Until the $Ath century Euro)ean im)orts consisted of goods from the colonies i.e. )recious metals and then, as far as eastern .sia is concerned, commercially )roduced lu7ury goods i.e. goods that are not essential for li(ing. Where food and raw material su))ly is concerned, though, the Euro)ean nations, at least the largest ones, were self sufficient until the start of the $A th century. 9or the nations in western and central Euro)e, im)orts of food and raw materials start to grow from this )oint, u)on which a strong de)endence on im)orts from o(erseas de(elo)s. This de(elo)ment ends u) with )roduction of food and raw materials in the agricultural regions of eastern and central Euro)e falling to a (ery low le(el. .ll those reser(es and o))ortunities a(ailable to Euro)e go almost totally unused. This is a further sign of the continued decline of the Euro)ean economic community. )he Release of En#land from the $ontinent and the Formation of the ,Free <lobal EconomyThis recent transformation only becomes com)lete with the third change, which I earlier described as fundamental, and that is the s)ecial de(elo)ment undergone by the 3ritish Isles at time. Until then they had not become the )redominantly maritime )ower that they are today des)ite their insular )osition, one whose land e7tends far into o(erseas territories. The big difference between the 3ritish Isles and the nations of continental Euro)e Fe(en those with large o(erseas coloniesG only becomes a))arent now. <es)ite the latter+s increasingly im)ortant economies outside Euro)e, they ne(er lost their identity as Euro)ean land )owers. .s if )roof for this was needed, it can be seen in $AB% when -arshall ?etin refused to relocate the 9rench go(ernment to a )lace outside Euro)e. We can recall, in contrast to this, (arious deliberations on the )art of the English concerning a shift of the core of the 3ritish Em)ire to an o(erseas location. The foundation for this remarkable de(elo)ment of England was laid back in the )eriod between the $:th and $'th centuries where maritime su)eriority was gained and a global colonial em)ire acJuired. 3y the end of this )eriod, countries outside Euro)ean accounted for B%R of England+s e7)ort trade. This de(elo)ment continued until World War I. In $A$# these countries accounted for H:R and :HR

of England+s im)orts and e7)orts res)ecti(ely. 9oreign ca)ital in(estment le(els in these countries also started to grow significantly. 8ince modern times England+s economy has de(elo)ed more and more away from Euro)e and not only during the )eriod of English free trade. It became e(en more )ronounced when there was )rotection and closer economic and )olitical union with the nations of the Em)ire, )articularly at the time of the !ttawa agreements of $A#&. 3ritish trade became e(en more concentrated o(erseas and, like the figure of $A$#, in $A#I 3ritish e7)orts outside Euro)e reached :BR. /ence the shift away from Euro)e of its im)orted goods and in $A#I :IR of its im)orts came from outside Euro)e. "et us look at, abo(e all, the effect of the )referential treatment gi(en to the nations of the Em)ire regarding su))lies of raw materials and foodstuffs. 3ecause the basis of England+s foreign trade was linked to its traditional economic and )olitical considerations and to the )rimacy of the nations of the Em)ire, she is inca)able of absorbing the sur)luses of the agricultural areas of Euro)e es)ecially the south6east. "arge )urchase orders made in more recent years were only intended to damage Germany and not to meet any real demand. England+s re6orientation to o(erseas is significant not Kust because it led to an increasing estrangement from the Euro)ean continent. -ore im)ortantly, 3ritish economic theory became more singular as it lacked any real )arameters. 9urthermore, it grew to become the )re(ailing ideology of the world economy while under 3ritish rule. Its most notable feature was its lack of attachment to any defined economic area, unlike that of the )owers of this continent, which was )re(iously taken for granted. In the de(elo)ment of economic )olitical ideologies lies the same difference between the ideas of the 3ritish Isles, which had no boundaries, and the geogra)hically defined (iews of continental Euro)e+s )owers. arl 8chmidt described this difference as decisi(e for the history of legal theory. "et us now shed light on those )rinci)les, which had a determining effect on the world economy that stood until then under English control. The )rece)t of free trade sha)ed the e7ternal economy in a way, which rode o(er all the natural factors of the indi(idual areas of the world. In this regard, it was a useful )rinci)le for an island which continued to dis)ense with any real territorial foundation, unlike for the large )owers in continental Euro)e. England+s transition to free trade only ha))ened around the middle of the $Ath century after it attained industrial su)remacy. E(en the most fa(oured nation clause Fgenerally recognised as the basis for foreign economic relations in the age of "iberalismG originates from the reser(oir of 3ritain+s boundary6less theories. What it did was to make it im)ossible to conclude regional economic agreements designed to create a closer economic union between )owers bound geogra)hically together, thus making all economic and )olitical )artners eJual. The fact that the use of gold led to similar conseJuences in terms of currency and )olitics can only be briefly referred to here. .ll these )rinci)les are nothing other than an e7)ression of the )eculiar 3ritish solution and mentality. !ne can only conclude with amazement how skilfully

3ritish )olicy understood the way to con(ince other countries of the uni(ersal (alidity of these ty)ically 3ritish )rinci)les. 9riedrich "ist+s works contained the occasional remark about this, saying that the English sent a co)y of .dam 8mith+s book with e(ery e7)ort consignment, which became the bible of free trade for that whole )eriod. That is not su))osed to be taken literally but it accurately describes the relationshi) between free trade ideology and where 3ritish interests lay. .))earing to re)resent so6called general human )rinci)les of the free economy concealed England+s real ambition, which was to )re(ent any coalition in Euro)e. The aim was to ensure Euro)e+s economic and )olitical fragmentation and to kee) its indi(idual nations de)endent on essential goods im)orted from o(erseas. It is )ossible that the blockade, 3ritain+s most effecti(e wea)on during the war, lost its effecti(eness as the economic unit of Euro)e of grew. The )arallel of the theory of Euro)ean eJuilibrium, which actually was not a disco(ery made by 3ritish )olicy, is clear. Det it is e7tremely interesting to read what the influential English geogra)her, -ackinder Ffrom whose school many 3ritish di)lomats cameG said back in $A%B about England+s attitude to Euro)e. To him, Euro)e was like a *hall of mirrors+ wedged in between the )owers of the 3ritish Isles and the then ,ussian Tsardom and whose fate it was to be dragged back and forth between the thie(es of the land and the sea. To )re(ent itself from one day being )ushed off the continent and into the sea, England+s interest lay in kee)ing this area as weak as )ossible. . truly illuminating remark referring to the )resent moment. Euro+es Economic 4e3 ?rder: )he Present )ask We ha(e studied the three fundamental changes, which ha(e )re(ented the formation of an economic area in Euro)e since the start of modern times and furthermore ha(e led Euro)e away from the aim of a true economic community. !nly from this historical background is it )ossible to a))reciate the significance of the economic new order of Euro)e, which has taken )lace o(er the last few years at almost breathtaking )ace. $olla+se of the Pre&ious World Economy The starting )oint is the colla)se of the old model for the world economy. .fter the short e)isode of su)eriority of the liberal trade )olicy, im)ortant nations had renounced free trade since the :%+s and I%+s and embraced industrial )rotectionism. The )rogressing industrialisation of the old agricultural and raw material bearing countries at about the turn of the century allowed the seed of doubt to grow among the old industrial nations of Euro)e in the future )ros)ect for the hitherto global economic di(ision of labour. In addition, references were made es)ecially in Germany to the threat of being cut off from im)orts of raw materials and food in the e(ent of a war. This became a reality o(er the course of this world war.

!ne can conclude, in retros)ect, that in $A$B the old world economy finally colla)sed des)ite some late attem)ts to re(i(e it. The world war )romoted the ambitions of the o(erseas nations, on the one hand, with the continued su))ression of e7)orts of industrial goods by im)ortant Euro)ean nations. !n the other hand, in Euro)e it led to economic difficulties following the )artitioning of land by the Treaty of >ersailles and following the e7cessi(e )rotectionism of the new successor states. Its lifting and the subseJuent return to the )rinci)les of free trade )ro(ed to be )olitically im)ossible. The biggest setback for the rules of the old system was the setting of the German re)aration )ayments. 3efore the war Germany was a creditor nation without eJual but was robbed of almost its entire o(erseas in(estments. Not only that, but it was turned into a debtor nation forced to )ay re)arations and denied the )ossibility of e7)orting to the creditor nations, )articularly the U8., who were not willing to o)en u) their market to im)orts. It is known that this contradiction was co(ered for a while by .merican credits, thus gi(ing the im)ression of the resurrection of the old world economy. This *bridging+ was, howe(er, not )ossible in the long term and one will be able to say that a totally hollow system folded as soon as the global economic crisis occurred. We now stand at the threshold of a new )eriod in the history of the world economy. It is identified by the efforts of numerous nations to gras) their own economic fate regardless of the )osition in the world+s economic trade cycle. Luite logically the aim of creating a better balance among the (arious local economic branches is combined with these tendencies to form an *autonomous trade cycle )olicy+. !ther aims are an increase in out)ut for the agricultural economy and for the )roduction of industrial raw materials in the old Euro)ean industrial nations, and a further e7tension of their own industry. These effects can be )artly achie(ed by a reduction in the agricultural sur)luses in the o(erseas countries. This )olicy is most strongly e7)ressed in the a7is countries of Germany and Italy. Their s)ecial geogra)hical )osition and moreso their e7)eriences during the world war and during the sanctions where they were denied access to world markets must ha(e made the need to raise their self sufficiency status seem an urgent reJuirement. 3ehind these efforts stands a definite, )olitical will, one intent on gaining greater economic inde)endenceN .ll these efforts ha(e nothing at all to do with insularity in the sense of total self6 sufficiency. 9or many reasons this is Kust im)ossible and e(en if it were )ossible, it would go against the founding aim of stronger economic )owers following the increasing limitation of workers and ca)ital and the subseJuent im)o(erishment. This is the real starting )oint of the new theory on enlarged li(ing areas. If di(ision of labour ceases to be )ossible in the future in the same way, then it is going to be necessary to concentrate on encouraging economic co6o)eration with the surrounding countries.

Means and ?b2ecti&es of the Euro+ean Economic $ommunity This now raises the Juestion of the new order for Euro)e in the economic field. /ere on the Euro)ean continent with its numerous small nations, its dense )o)ulation and the hea(y industrialisation of the central and western areas, it must ha(e seemed unbearable to consider a continuation of the traditional border duties around each nation. It stands in direct contradiction to the demand for an e7tension of commercial markets, as is now the case with the )resent day reJuirements related to technical )roduction. ,eferences are re)eatedly made to the )arallels between today+s Euro)ean situation and that of Germany before the formation of the customs union. !ne hundred years ago it )roduced a solution to an untenable situation, created the conditions for the industrialisation of Germany nascent at the time and abo(e all, turned Germany into an economic entity eJual to any western Euro)ean country. !ne should remember though today that it was the same 9riedrich "ist, who in his early days was one of the most im)ortant )ro)onents of the )olitical unification of Germany, who )assionately dreamt of a )lan for the e7tension of the customs union to become an economic alliance of central Euro)ean countries, including in )articular /ungary and the 3alkan nations. /e is the s)iritual ancestor of all the recent )lans for a * entral Euro)e+ as well as the failed )lan for an .ustro6German customs union in $A#$ and the unrealised )lans for a finalisation of )referential agreements with /ungary and ,omania. If he limited his )ro)osals to the economic coalition of entral Euro)e, this was Kust the result of the )re(ailing )olitical situation, which must ha(e made a )an6Euro)ean solution seem im)ossible. The )olitical situation of Euro)e today is ready for greater control on account of the military successes of Germany and the )ressure a))lied through the 3ritish blockade. If a s)ecial role falls to Germany in this new order, then it will sim)ly be to recreate a natural situation whereby Euro)e+s natural focus is the centre of the continent, which is then strengthened by the arri(al of Italy as the second .7is )ower. It is not only due to its central location, but also Germany+s e7ternal economic structure, making it the absolute antithesis of England, that makes it )erfectly suitable for the role. HBR and IHR of Germany+s im)orts and e7)orts res)ecti(ely were with Euro)e in $A$#. This facet of Germany+s e7ternal economy de(elo)ed further u) to the ne7t world war, )articularly following the im)ort switch to areas away from the blockade in south east Euro)e. !(er H%R of the ,eich+s im)orts and e7)orts were with the nations of south6east Euro)e at the outbreak of the war. 9rom that )oint, the tendency de(elo)ed e(en more Juickly. 3ut e(en after the re6introduction of )eace, the German ,eich with its $%m )lus inhabitants will be ca)able of absorbing the sur)lus )roduction of the agricultural regions of Euro)e, taking into account the )resent yield increases, without being restricted 6 like England 6 by e7)ort interests with the dominion. Germany is able with its (ery wide range of industrial )roducts to meet all the reJuirements of the countries of Euro)e where industrial goods are concerned. None more so with the )redicted growth in demand for machinery and other means of industrial

manufacture, which will ser(e to create new industrial entities in the hitherto )redominantly agricultural regions of Euro)e. Germany is Kust as interested in such industrialisation as those countries concerned, because this is the only way that )urchasing )ower can be increased 6 an essential foundation for the creation of trade relations and the raising of the standard of li(ing for the )o)ulation of Euro)e. The country of 9riedrich "ist would be untrue to itself if it did no show understanding for the industrial de(elo)ment as)irations of other nations. .s with the case of .nglo6Euro)ean relations, it would be wrong to Kustify this s)reading economic new order of Euro)e with figures to do with the mutual economic in(ol(ement. What is decisi(e is that the new means of attaining Euro)ean economic co6o)eration ha(e become clearly (isible in more recent de(elo)ments, which is fundamentally different from the means used in trade. The fact that it is nothing to do with a customs or currency union in the foreseeable future has been freJuently stressed by influential figures. 9urthermore, )olitical )ers)ecti(es argue against any far6reaching standardisation. There is the res)ect to be accorded to the desire for inde)endence of the nations concerned. The most im)ortant means of attaining Euro)ean co6o)eration will in future be through the signing of long term economic treaties. Unlike the trade treaties signed in the liberal age, these would not limit themsel(es to a general control of trade, )articularly regarding duty Juestions. Instead they would rather ha(e influence o(er the economic structure of those nations bound to the treaty in the sense of a mutual obKecti(e. The German6,omanian economic treaty of $A#A remains a (alid e7am)le of this. In $AB% this was e7tended into a $%6year )lan, which in @anuary $AB& was brought to com)letion by an additional agreement. These treaties control not only the ty)e and amount of goods to be e7changed, they also )ro(ide for the setting u) of a )roduction )rogramme based on the needs of the two countries. ,omania would gain in )articular from the assistance of the German economy in de(elo)ing its agriculture, oil drilling and industry. . credit worth :%%m reichsmark granted by Germany will enable this )rogramme to be carried through. This system of economic control, which has been successfully tested in Germany, will con(ert into a future co6o)eration in Euro)e thanks to such economic treaties 6 that is the significant )oint in these )roceedings. E(en the inter6state trade with its decisi(e significance for the )redominantly agricultural nations and the fate of their largest social classes will no longer be e7)osed to the (agaries of the free market. Instead e(erything will be thought out and controlled according to a carefully laid )lan. ?utlook <uring these years of war, the new economic Euro)e will be born as a community sharing one destiny in the same way as a new )olitical solidarity among the )owers of Euro)e, which transcended all traditional grudges, set out to fight 3olshe(ism. The common need, created as it was by the )ressure of the 3ritish blockade, is hastening the coalition of the countries of Euro)e, in fact more Juickly the longer

the war goes on. Euro)e will remain an inde)endent economic area e(en after the war and the )resent state of emergency has been called off. This will ha))en because the )eo)le of Euro)e will not want to subKect themsel(es to the stranglehold of the 3ritish blockade and the )resent de(elo)ment of the other large economic areas lea(es Euro)e with absolutely no other o)tion than to assert its own e7istence by de(elo)ing its own economic resources. !n the other hand, it can be seen today that the disco(ery of barely used reser(es of raw materials and food in east Euro)e will make it )ossible to be self6sufficient in all the essential things. Euro)e+s attitude towards the rest of the world therefore changes. The new Euro)e will turn towards the eastern )arts of the continent and away from o(erseas. In future there will be a far greater commercial traffic between the (arious economic areas. <ue to its geogra)hical reJuirements, Euro)e is de)endent on this kind of economic trans6continental integration. Its (aried coastline and wealth of )orts also )lay a role. This intercontinental economic traffic will be fundamentally different to the )re(ious one. It will not be an e7change of essential goods, the blockading of which Keo)ardizes inde)endence, but it will be an e7change of )roducts that enhance life 6 )roducts from tro)ical areas, industrial sur)luses etc. <ue to its manufacturing Juality, Euro)e will )lay an im)ortant future role in the new world economy. 8)iritual )owers are a decisi(e factor for humans in the economy. !ne could e(en suggest that managing an economy re)resents a s)iritual task. 8een this way, the creation of a Euro)ean economic area that is immune to euro)hobic influences and relies on the co6o)eration of its )eo)le, also re)resents an act of Euro)ean self6 determination. !nly on the foundation of such a Euro)ean economic area can Euro)e really win the battle against 3olshe(ism and .mericanism. This is the battle )resently being waged and the s)iritual one of the future.

0amphlet 23:

Euro+ean %#riculture by !r" Emil Woermann, Professor at the @ni&ersity of

alle

Indi(idual countries are increasingly becoming aware that the efforts by Germany and Italy to achie(e self6sufficiency in essential foodstuffs will ha(e to be e7tended across much of the Euro)ean area. The Juestions being asked how to achie(e this aim are many and (aried. It is therefore my task to shine some light on the Euro)ean food )roblem through the last decades and to describe the )resent and future duties and de(elo)mental )ossibilities in broad outline. It is not )ossible here, though, to e7)and on the e7tent of this multifaceted )roblem and to go into technical details. We will instead look at the matter as a whole and try to )oint out the indi(idual )rocesses and measures in relation to the whole Juestion. )he !e&elo+ment of %#ricultural Enter+rises and the 'tructure of Euro+es Food Economy The situation at the outbreak of this war was the result of a long )rocess being dri(en forwards by a economic boom, far reaching agricultural and breeding )rogress and technological ad(ances, which had sometimes been slowed down or e(en held back by e(ents related to the war or to economic crises. The central e(ent of the last three generations was the dramatic increase in )o)ulation and the conseJuent urbanisation of )eo)le. 8ince the middle of the last century the )o)ulation of Euro)e has almost doubled. ?re(ious to that, it took a millennium to achie(e such an increase and was made )ossible by biological and economic de(elo)ment o(er Kust two generations 6 this is without )arallel in history. EJually un)aralleled was the industrial de(elo)ment o(er the same )eriod, whose ince)tion was long ago but whose results will only be known at the end of the &%th century. If such an industrial boom did take )lace, it was accom)anied by far reaching changes in the di(ision of labour and the way in which the )o)ulation fed itself. 3oth )rocesses are of great significance from now on, not only for the entire social structure, but also for agricultural de(elo)ment and the food economy in most countries. Urban and industrial centres attracted sur)lus inhabitants, so that numbers of )eo)le in rural areas generally stayed the same. Thus the )ercentage of this )art of the )o)ulation grew smaller and it is a )rocess that still goes on in indi(idual countries, es)ecially Germany. The demogra)hic effects cannot be o(erstated. !ne can roughly estimate that e(en at the start of the $A th century almost a fifth of Euro)e+s )o)ulation li(ed in the countryside, was em)loyed in agriculture or agriculture6related work. In Germany and 3elgium the figure is now a Juarter4 in

/olland, <enmark, Norway and 8weden Kust a third4 in 9rance and Italy around a half and in the o(er)o)ulated, agricultural nations of south Euro)e almost four6fifths of the whole )o)ulation. Thus there were )ressing concerns about the )reser(ation of a minority and (arious attem)ts to relie(e the o(er)o)ulation of the flat land and to increase the low work )roducti(ity by increasing field yields. These )o)ulation structure differences and the di(ision of labour among the em)loyed are a reflection of the industrial )roduction sites, which are concentrated in central Euro)e, namely down from the North 8ea o(er central Germany, u) to the edge of the ar)athian mountains. The areas right on the )eri)hery of this area are of a )redominantly agricultural character. The )eo)le in the industrial countries were faced with the task of )ro(iding not only a constantly growing )o)ulation with essential foodstuffs and agricultural raw materials, but also satisfying increasing demands for higher )roduct Juality. .long with the )o)ulation increase and the social changes came the well6known changes in eating habits. These has not been any other )rocess, which has so influenced the direction of agricultural )roduction and the whole structure of the Euro)ean food economy, than the shift in human eating habits from (egetable to animal )roducts. The )ressure created by the )o)ulation increase and higher consum)tion demanded that Euro)ean countries grow culti(ated cro)s that )roduce higher gross yields and also the highest food yields. This was true for the maKority of root cro)s= )otatoes, sugar beet and the other im)ortant ty)es of (egetable. ,oot cro)s and (egetables reJuire more work and fertiliser than the (arious ty)es of cereals, Kust as these do more than green fodder and )astureland. The increased le(el of work, howe(er, leads to higher yields which only much later are subKect to the effects of the law of diminishing yield returns. 9irstly it was the mills su))lying te7tiles, she)herding and cotton growing farms etc. which mo(ed to other areas. 8he)herding, which needs large )asture areas and reached its )eak in the $':%+s has dwindled to a tenth of its earlier le(el. It was really since cotton took root in the undisco(ered areas of .merica that she)herding mo(ed away to the ste))es of .rgentina, .ustralia and 8outh .frica. This was the start of cotton com)eting with wool. 9rom these countries large amounts of raw material flowed into Euro)e where the te7tile industry and hea(y industry were the focal )oint of industrial de(elo)ment. A similar thin+ happened to the +ro0in+ o% trees$ 0hich entails a relati1ely hi+h amount o% manual 0or2 and is less suitable %or mechanisation or$ to be more precise$ 0as less suitable than culti1ated crops as technolo+y stood at that time/ Thus it mo1ed to re+ions 0here land 0as cheap and labour costs lo0$ to eastern Europe and *ussia 0hich still supply a lar+e part o% the total 0orld production/ The de(elo)ment is different, at least in )arts of countries, for the three most im)ortant commodities for human nutrition= cereals, meat and fat. Euro)e could

generally su))ly itself to the e7tent that the indi(idual countries made cro) )roduction the main )riority in the formation of their trade and agricultural )olicies, thus mobilising the means of )roduction of their own land. They wanted to kee) as far as )ossible the )roduction of bread and animal )roduction in their own country. /owe(er, this latter aim was not achie(ed in most countries. @ust as a )oint, Great 3ritain con(erted to total free trade soon after the Na)oleonic Wars due to their feeling of absolute maritime su)eriority and abandoned its agriculture for *e7tensi(isation+. .s a result, its source of food was mo(ed increasingly outside its borders. 9irstly England took the a(ailable sur)luses of cereal in Euro)e, refined animal )roducts and wool, until the demand from those countries of origin were able to absorb these sur)luses themsel(es. Then food and raw material su))ly mo(ed increasingly to occu)ied areas o(erseas. .fter their (irgin agricultural areas were inhabited and de(elo)ed, they were e7)osed more and more to world trade. The agricultural economies of <enmark and /olland embraced di(ision of labour and were used to su))ly the English food economy to the e7tent where those countries im)orted large amounts of cereals and foodstuffs and then sent the (aluable end )roducts gained from li(estock6holding and dairies to the English market. The final result in the years )receding the outbreak of war was that England+s im)ortation Kust of bread cereal and animal feed was $%6$$m tons more the im)ort sur)lus of the whole of Euro)e. Great 3ritain also had a larger su))ly need of the im)ortant food ty)es than the whole of Euro)e. The im)ort sur)lus of sugar was &m tons, meat $.Hm tons and fat %.'m tons. alculated in terms of calories, England accounted for &%R of all food consum)tion. The German agricultural economy was able to kee) )ace the longest with growing demand for food by increasing its agricultural )roduction. Ne(ertheless its (arying agricultural )olicy at times lacked some im)ortant conditions for an intensi(isation of )roduction. .ll the same, the agricultural duty )olicy was generally structured in such a way that the influence of the world market on the )rice of German bread grain was greatly reduced. The duties for bread grain relati(e to those for animal )roducts were much lower, but they were effecti(e enough in conKunction with (eterinary measures to kee) im)orts in )ro)ortion to total consum)tion. The only ga) in the German duty tariff then was the low duty for animal feed cereal and the zero rating for )rotein foodstuffs. It was a ga) through which the huge amounts of animal feed cereals flowed into central Euro)e mainly from ,ussia before $A$B. This was to su))ort not only <enmark+s li(estock economy but also Germany+s growing stock of cattle, after it no longer became )ossible for its own )roduction to kee) )ace. <ue to this (aried agricultural and trade structure, Germany+s land and food economy embarked on its famous course. .fter the great agricultural reforms, which meant the farming economies were freed from feudalism and indi(iduals were able use their own energy, the fields of the most im)ortant ty)es of food could be e7tended and their yields considerably raised. Im)ortant )ioneering work for the culti(ation of sandy soil was achie(ed by the use of fertilisers and forage )lants.

They introduced arable land to our heath areas together with the )otato and made large )arts of eastern Germany with its light soil culti(atable. Then commercial fertilisers were used to increase the soil+s fertility and e(entually made effecti(e the )lanned growing of cereals, )otatoes and sugar beet. EJui))ed with these aids and great technological ability, Germany+s agricultural economy after $''H could not only kee) )ace with its growing )o)ulation, but it significantly increased its )er ca)ita )roduction of food. It has been an amazing achie(ement to increase the yield of foodstuffs made on German soil by almost I%R since the formation of the ,eich, des)ite the increasing flight from the countryside. Germany+s agriculture e(en )ro(ed itself to be a match for the second change in eating habits which was the turn towards the consum)tion of animal )roducts, as it doubled its cattle stock and meat )roduction o(er four decades. -oreo(er cattle rearing e7ceeded the ca)acity of the neglected animal feed economy, so de)endence of im)orted )roduce started to grow. That is not allN .s the increase in demand could not be co(ered by the su))ly of meat and fat, in addition to foreign feed, the following )roduce had to be im)orted= oil seed for the )roduction of (egetable oil, lard, butter, eggs and dairy )roduce of all kinds. The national task, therefore, to )roduce locally the minimum subsistence le(el remained unresol(ed initially. !(er the last three years )rior to the 9irst World War F$A$B6$A$'G around one fifth of all wheat, one third of concentrated feed for Germany+s li(estock and almost one half of all cooking oil consumed was im)orted. .s a result of the di(ision of labour, the <anish and <utch agriculture, with a greatly e7tended refining industry, filled the ga) to su))ly animal )roducts for England and Germany 6 the former+s su))ly being large, the latter+s small. 3oth of these nations were )owerful, industrial nations with high le(els of consum)tion, facing the sea, with small raw material resources, a free trade )olicy and an o)en farming sector, but they could match the com)etition in cereal )roduction from the newly o)ened o(erseas territories. They shifted the focus of agricultural )roduction to li(estock rearing, the (aluable )roducts of which, firstly at least, were away from the trium)hant com)etition )resented by o(erseas trade on a mass scale. 9irst of all, it was cattle rearing and the dairy economy, which took off Juickly in both countries. Then followed swine6mast as bacon )roduction intended for the English market, finally hen rearing and egg )roduction became wides)read. This )owerful and uniJue refining a))aratus was not only born by locally )roduced feed, by it had to be su))lemented increasingly by im)orted cereal and feed. This des)ite a thorough intensi(isation in its own feed )roduction and the fact that they soon had the highest yields in cereal and feed root cro)s of all the Euro)ean countries. International di(ision of labour affected both countries 6 but in a different way. .nimal feeding did not only limit itself to cereal feed, but it also included

significant )arts of the bread cereals har(est, in order to use the )roceeds from the resultant and e7)orted )roducts to im)ort high grade bakery wheat from o(erseas. 9rom time to time, /olland deliberately reined in the )roduction of bread cereals, in order to make the freed u) areas a(ailable for the )roduction of (egetables and e7)ort6bound horticultural )roduce. 9inally both countries )referred to consume margarine in s)ite of their butter sur)luses and in this res)ect e7ceeded all other Euro)ean nations. That is how <enmark and /olland could rise to become leading e7)orters of refined )roduce, su))orted by an e7tended co6o)erati(e system and by dint of its standardized )roducts, e(en before the war. 3ut one can see easily that the achie(ements in animal )roduction in <enmark were based then, Kust as they are today, on only about three Juarters of the total of feed coming from local )roduction 6 in /olland a little o(er one half. 3elgium assumes a s)ecial )osition in the scheme of food economies. It had a dense )o)ulation structure among the Euro)ean countries not taking into account the colonial areas since it became industrialised early on. .s a result, it was de)endent on im)orts of bread cereals e(en before $':% and had to increase them accordingly and di(ersify into feed cereals and oil seed in line with the increase in )o)ulation and consumer demand. .lthough 3elgium was able to maintain abo(e a(erage hectare yields and a high )roduction (olume, im)orts of cereal and feed swelled greatly, without the )ossibility as in <enmark and /olland to )roduce large amounts of animal )roducts for e7)ort. The )roduction of refined goods instead remained limited in the main to demand in the home market. Nonetheless with its )o)ulation density and high degree of industrialisation, 3elgium became the country in Euro)e which had the greatest de)endence factor where food was concerned. Thus, in s)ite of hel) from Germany, it had to ada)t and ration what it consumed the most. 9rance+s agricultural economy lacked a de(elo)mental im)ulse of its own, due to its biological stagnation and its )oor industrial growth record. Whereas other central and north Euro)ean countries intensified their farming and increased yields, 9rance saw in certain areas a noticeably backward trend. Its hectare yields were maintained but were below the Euro)ean a(erage and arable land was reduced. 9allow land grew and feed )roduction increased 6 all the hallmarks of an e7tensi(e farming system, although the natural conditions in many areas were rece)ti(e to intensi(e farming. Without any internal )ressure, 9rance became de)endent on foreign countries and thus increasingly on o(erseas im)orts. "eading u) to the war, its de)endence on im)orted cereals was on a(erage '6$%R of total consum)tion. In actual fact, 9rance could ha(e e7)orted that amount by utilising its a(ailable resources. !ne ought to assume that a de(elo)ment which considerably raised the demand of densely )o)ulated Euro)ean countries for cereal and oil seed would ha(e led to the

full realisation of the 3alkan nations+ agricultures. Either that was not the case or only )artly the case. .reas suitable for farming increased and hectare yields grew but these increases remained well behind those achie(ed elsewhere in Euro)e. Generally the countries to the south6east failed to emerge from their e7tensi(e agriculture status according to world economic conditions. That was because cereal sur)luses, with the distance to market in central Euro)e and in com)etition with o(erseas territories, could only be brought in at )rices so low that intensi(isation remained an im)ossibility. Then there came, as they still do today, the countries+ farming and )astural limitations, through which reforms became strengthened after the war. There were the smaller farms with a lot of owners se)arated by boundaries, barely accessible by roads, with totally inadeJuate eJui)ment, lacking )lant and machinery with which to fight cro) diseases. In the continental climate this situation led to e7traordinary shortfalls and (ariations in yields. E(en now hectare yields for cereals amount to only half of Germany+s, a situation which got worse in the flat areas of the south6east where o(er)o)ulation e7isted. In central and north6western Euro)e there was some correlation between arable farming and li(estock rearing Fwithout whose symbiosis the yield increases of the last decades would ha(e been unthinkableG. Whereas in the south6eastern countries, li(estock rearing was only an add6on )art for arable farming and annual )roduction was less than half of Germany+s. )he Formation of the !i&ision of 5abour in World %#riculture Thus it ha))ened that di(ision of labour steadily took a hold in farming in central Euro)e and left, in the )rocess, large natural resources une7)loited in Euro)e. The most ob(ious case was that concerning cooking oils. .s consum)tion of this oil e7tended in the industrial countries, there was a strong u)turn in the )roduction of animal fats, which in turn o)ened u) o(erseas grazing areas for the e7tensi(e form of li(estock holding. These mainly su))lied hides, wool and fat. When animal fats could no longer meet demand, oil seed was )lanted on a more wides)read basis firstly in the tro)ical countries, later in the tem)erate areas of .sia, )articularly in -anchuria. .s a conseJuence, the )roduction of oil fruit got less and less and finally reached its lowest )oint e(er. .t first, animal fats could com)ete with )lant oils until the )oint when technical ad(ances in refining and solidifying brought more and more new a))lications for )lant oil, ending u) with blubber being used to )roduce margarine. . century then, of technological, economic and agricultural de(elo)ment for the Euro)ean food economy which took on an altogether new course. Euro)e entered the $Ath century as an agricultural area, mainly e7)orting its ground )roduce, and left it as an industrialised one essentially linked to the entire world, no longer unable to feed its own )eo)le from its own soil. There were two ty)es of labour

di(ision resulting from this change, which we will deal with. The first one ha))ened between agriculture and industry. "ocal agriculture became more and more remo(ed from the )rocessing and refining of natural )roduce, which became commercially autonomous. 9urthermore, agriculture was re)laced more and more by industry for su))lying the )o)ulation with consumer goods and it also became increasingly de)endent on industry for the su))ly of fertilisers, machines and other farming eJui)ment. ,ural industry and soil culti(ation grew steadily into two self6 com)lementing, large national labour and sales areas. This )rocess of national labour di(ision became embedded in the larger one taking )lace on an international scale. This is a healthy )ro)osition for the e7changing of those )roducts which cannot be locally grown due to climatic reasons or which are insufficient from local sources because of Juantity or Juality. The barter of such goods leads to an increase in the out)ut of all countries in(ol(ed and li(ing standards go u), )ro(ided )eaceful conditions e7ist. ?eo)les+ wealth and li(es are threatened, the more the increasing )o)ulation has to rely on the regular su))ly of goods from other economies and, as a result, local agriculture recedes as an area for su))ly and sales. ?eo)le are in constant danger, when that ha))ens to such a degree that one+s own soil does not )ro(ide the minimum for e7istence. .t the outbreak of World War I, most Euro)ean countries were in this situation. !f course, the formation of labour di(ision in agriculture is not Kust a negati(e thing. .s now, at least in certain areas, it was a time of social )rogress. <es)ite the growth of many new cities and the increasing wealth, )rices increased little i.e. the working masses were not forced from consuming. In central and western Euro)ean countries, farming had a higher status than that of )re(ious generations and farm yields were sufficient to )ro(ide succeeding sons with land to li(e off or to )re)are them for new (ocations. /owe(er, the e7ternal economic dangers were not to be underestimated and in $A$B the war broke u) e(erything. The burden of economic sanctions was mainly born by our )eo)le, whereas western Euro)e, with its (ast colonial areas, enKoyed a high degree of economic balance. The war was between those countries with land and those without land in central Euro)e. E(en the countries engaged in refining goods in north western Euro)e were not )rotected from economic difficulties, as the English blockade only allowed so much cereal and feed stuff to be shi))ed to meet the urgent needs of their )eo)le. Germany+s de)endence on foreign goods with its fatal conseJuences became gra(ely a))arent when the large su))lies of foodstuff, which had been a(ailable at the start of the war, slowly began to dry u). That led to the well6known situation where our li(estock le(els were hea(ily reduced and subseJuently created a lack of su))ly of meat and fat. This had a knock6on effect on the a(ailable out)ut, since manure and )lant feed were now in short su))ly. .s a result, the )roduction of nitrogenous fertiliser was de(elo)ed during the course of the war. Thus things came full circle and the food shortage situation was sol(ed, which had brought us so closely together.

Production (ncrease in <ermany and (taly The maKor lesson of the world war was that in times of e7ternal economic strife )eo)le can only be su))lied with essential foods, if besides meeting the demand for bread and )otato, su))lies for cattle rearing comes mainly from foodstuff of local origin. If these )reconditions are not fulfilled, then im)orts ha(e to be drastically cut back in times of difficulty. Ine(itably then, meat and fat su))lies are also ad(ersely affected. !ut of the Euro)ean countries, Germany and Italy were Kust about the only ones, which drew this unfortunate lesson from the last war and from the subseJuent crises when it came to management of their agricultural )olicies. Germany, in )articular, de(elo)ed its )roduction the most in a di(erse and effecti(e range of measures. The first ste) to )rotecting farming from the changeable, economic sets of conditions and from the blows deli(ered by the free market economy was the ,eich+s law of *Entailed Estate+. The second ste) is the reforming of market relationshi)s and the system of fi7ed )rices, which grants total )rimacy to the )rinci)le of (egetable )roduction. It also lends the strongest su))ort to those branches of )roduction, which hold the largest reser(es of )roduce and can release them for human consum)tion. The market order )ro(ed itself suitable, too, for directing free trade between nations in agricultural )roducts along controlled and mutually beneficial lines. I want to lea(e the Juestion o)en here whether the laws of the land will see some rela7ation o(er time. We should not forget the fact that fi7ed )rices, as a statistical system within a dynamic economy, do reJuire adKustment now and again. 3ut one thing is certain, that if agriculture is freed from its market6)olitical function and the systematic stabilisation of agricultural markets is )laced into the hands of go(ernment authorised bodies, it could de(ote itself with full energy to its economic task of feeding )eo)le. The result of these efforts in the last decade is an increase in the total out)ut of )roduce, e7)ressed in cereal (alues, by more than $HR. The same increase, which )re(iously reJuired se(eral decades, was reached in a few years, although agriculture suffered from an increasing lack of workers. It is thanks to this out)ut increase that food su))ly de(elo)ed without )roblems in s)ite of the increased consum)tion of bread, cereal and )otato since the outbreak of the war. Indeed it will continue to de(elo), although it was always clear that the consumer would face with considerable )ri(ations. E(en Italy was able to increase its )roduce out)ut by &%R in the last two decades and showed less de)endence on cereal su))ly during a(erage har(ests than Germany. 3esides this, the damage wrought by the world war in the countries that were s)ecialised in refining )roducts was made good in a few years and the li(estock le(els were built u) again. The only far reaching change was in the su))ly of cereal feed in Euro)e, when ,ussia )ractically ceased to be a cereal su))lier after the world war and maize from .rgentina took the )lace of ,ussian barley feed.

In the meantime, the course of e(ents made the food )roblems into something )eculiar to Euro)e and for Germany in )articular the )roblems did not get any easier. It is, in fact, true that the agriculture of the regained )ro(inces in the east underwent a Juick )rocess of intensi(isation, and it is also true that there are still large )roduct reser(es to be utilised not only in 9rance but also in the south6 eastern countries4 also the south ,ussian areas are some of the most )roducti(e ones for cereal in the world. /owe(er, it must be stressed that successful agricultural )lanning reJuires a longer )eriod of time and additional amounts of agricultural eJui)ment, which was only a(ailable on a limited basis during the war. !ne should not o(erlook the fact, though, that the war did not lea(e the )roduction a))aratus of certain areas untouched or that the south eastern nations and ?oland before the war were the only grou) of countries within the food economy of Euro)e that )roduced a consistent e7)ort sur)lus of cereal and oil seed. This amounted to &.H6#m tons )er annum against Euro)e+s reJuirement for the same )roducts of about $Bm tons. )he 'u++ly 'ituation under the (nfluence of Economic Restrictions and $han#e It would take too long to discuss this to)ic in any great detail, but the basic Juestions can be set out in a few words. In the last two decades, there were considerable increases in har(est )roduction since the leading agricultural countries Juickly made ad(ances in farming technology. In fact, the a(erage annual increase in )roduce e7ceeded any increase in demand. Thus, Euro)e+s out)ut of cereal and )otatoes grew from $B%m tons in $A&' to $:%m tons, the a(erage figure for the )eriod $A#:6$A#'4 as a result, the im)ort sur)lus could be reduced from &% to $%m tons o(er the )eriod des)ite rising demand. It must be considered that the refining countries of north west Euro)e e7)orted to England about &6&.Hm tons of animal )roducts deri(ed from their im)orts of cereal and animal feed. 3asing on a total Euro)ean su))ly of $:%m tons, one can calculate that Euro)e+s im)ort demand was only about HR different from the usual demand le(el in )eacetime. The har(ests of cereal and )otatoes were used in three ways. . small )ro)ortion, about &%m tons F$&6$BRG remains on the farms as seed. 3y far the largest )ro)ortion is needed to su))ort the consum)tion of bread and )otatoes4 roughly estimated, it amounts to about '%m tons or a good H%R of the total har(est. The left6o(ers ser(e as the basis for animal food and thus for all meat, fat and egg )roduction etc. which has been augmented by )roducts from the mill trade and the waste from related technological businesses. .s demand for seed, bread and )otatoes tends to remain at a constant le(el, any (ariations in har(est or any dro)s in im)orts ha(e a direct effect on food )roduction and su))ly to breweries, distilleries, etc. !f )articular conseJuence for the food economy is the fact that refining food entails considerable losses in nutritional (alues. The size of loss de)ends on the ty)e of refining4 for e7am)le, for milk )roduction it is IHR, )ork )roduction IH6'%R, egg )roduction A%R. ?igs and )oultry ha(e the characteristic

that they need rich food, )articularly cereal and )otatoes, i.e. ground )roduce which also ser(es for human consum)tion. The )ro)ortions are a little different for cows and shee) than the concentrated feed and cereal that sim)ly ha(e to make cost effecti(e the )roduction of hay and root cro)s which make u) most of the feed ration. Therefore, when there is short su))ly of (egetables, li(estock can become a dangerous com)etitor for food to humans and, in that case, ha(e to be subKect to a))ro)riate limitations. E(en the )rocessing of ground )roduce into beer and brandy causes considerable losses of energy. Thus, at least in a small way, this affects lu7ury goods, which are irrele(ant in times of need. The larger the )ro)ortion of animal )roducts in e(eryday food, the bigger the growing areas ha(e to be Fall things being eJualG, which are reJuired to feed e(ery inhabitant and (ice (ersa. The eating habits of Euro)e+s )eo)le (ary within rather wide boundaries. 9or e7am)le, the annual meat consum)tion in western and northern Euro)e amounts to B%6BH kg com)ared to $&6$H kg in south6eastern Euro)e. The latter+s fat consum)tion is about half and for sugar it is e(en less. The more difficult it is to significantly increase ground )roduce, the more im)ortant it is to set out )riorities in rationing, roughly in the following order= bread, )rocessed food, )otatoes, fat, (egetables and meat. This )rinci)le a))lies across Euro)e as a whole. It is one of the most difficult and im)ortant measures of food )olicy 6 not Kust in times of emergency 6 to find the *medial section+, i.e. to define the dimensions of the har(est dis)osal through corres)onding )rice setting and other a))ro)riate measures in the interest of the total )o)ulation+s nourishment. ?rotection of the bread cereal reser(es also means free )lay to e7tend (egetable oil growing in indi(idual countries. This in its highest forms Fra)eseed, sunflower and soya culti(ation in e(ery Euro)ean climatic areaG is by far su)erior to the other fat sources in terms of )roduction )er land unit. Indi(idual Euro)ean countries )articularly demonstrate the strongest de)endence on the su))ly of fat. .lthough Germany+s and south6east Euro)e+s efforts succeeded in doubling Euro)e+s )roduction of oil seed in the last $% years, raising it to around $m tons, Euro)e+s a(erage im)ortation in the years leading u) to the war was about Hm tons. !ne also has to remember that oil seed has a second rSle concerning the su))ly of fat. 9irstly, it )ro(ides raw materials for margarine )roduction and then oil6cake as (aluable milk yield feed. E(aluation and consideration of these functions of oil seed in the economy of fat leads to the conclusion that about #%R of Euro)ean fat consum)tion is from o(erseas im)orts. "ooking at the )icture as a whole, Euro)e+s food )roblems stem )rimarily from the Juestion of the su))ly of li(estock feed. 9rom an economic farming )ers)ecti(e, it is necessary to refine one of the conclusions made about demand for cereal im)orts (arying from normal )eacetime consum)tion le(els by about HR. What should be added is that after the guarantee of the bread and )otato demand and the reJuired seed stock, amounting to $%%6$H%m tons of cereal in Euro)e, there is an amount remaining for animal feed )ur)oses and technical business, which had to be

augmented by about one fifth from im)orts o(erseas to guarantee the su))lies for li(estock, and thus the earlier su))ly of meat and fat. These de)endencies are the main e7)lanation why, during the effects of economic sanction, considerable economic )ri(ations were e7)erienced by the )ig and )oultry stock in the refining countries of <enmark, /olland and 3elgium. In turn, there were similar conseJuences for the farm organisation and for the out)ut of meat and fat. Political $onse>uences for Production /a(ing attem)ted so far to describe the )roblems of Euro)e+s farm and food economy o(er the last decades from a farming economic )ers)ecti(e, I now want to briefly draw some conclusions concerning )roduction and )olitics. <ue to the s)ecial conditions of wartime, )roblems of distribution always come to the fore. /owe(er, we do not want to o(erlook the efforts made by almost e(ery country to deri(e higher yields from the soil and to guide )roduction in a direction, which meets the needs of food su))ly. .bo(e all, we need to recognise the forces, which go to create a different )icture of Euro)ean farming, in the sense of a stronger shift of focus towards the centre of Euro)e. 8uch a gradual change of this nature is worth stri(ing for in order to ensure that Euro)e does not Kust remain a huge consumer market for food, whose essential food sources lie o(erseas and whose trade routes could be threatened. 8uch Euro)ean community work reJuires not only the insight of e(eryone in(ol(ed but also )laces u)on them serious agricultural tasks and a high le(el of res)onsibility. The solution of these tasks will take a great deal of time. Whoe(er has studied in detail the changes in economic structure after the war, )articularly the effects of the world economic crisis, could not ignore the fact that the measures taken by all nations in order to free themsel(es from the economic chaos, such as duties, Juotas, mono)olising of foreign trade, forced a))ro)riation and internal )lanning, were about dee)6rooted )rocesses, as well as ways to co)e with the economic woes of the time. E(en the refining countries, whose farming sectors deri(ed some benefit from the world di(ision of labour, got dragged into the mess of the world economic crisis. This ha))ened )articularly due to England+s withdrawal from the Euro)ean economy and its about6face on duties and the !ttawa Treaties, which ha))ened e(en during the classic )eriod of free trade. The s)ecial threat to agriculture e(en before the war made e(eryone aware that the rural )o)ulation was the foundation of the whole economic structure. It was the )roducer of bread, our great energy )ro(ider and bearer of those (irtues that are rooted in farmers+ work ethic. The desire for a new order is more discernible in the indi(idual countries, when economic e(ents threaten the su))ly of their sta)le

foods and a )owerful leadershi) is able to direct the will and energy of a whole working sector and an entire nation towards a single goal. I ha(e already mentioned the main traits of national socialistic agricultural )olicy to which I can add that the German e7am)le has acted as an ins)iration for other countries+ food sectors. Possibilities of (ncreasin# Euro+es Food Production In order to increase food out)ut, farming has four o)tions= $. &. #. E7tension of culti(ated land by including all areas that can be culti(ated with the technology a(ailable at the time. Increase in field yields. -ore intensi(e use of the soil through an a))ro)riate cro) arrangement on arable land. Generally, out)ut is higher when grassland recedes or intensi(e farming methods are introduced and arable land is cleared for )roducti(e cro)s such as root cro)s and (egetables etc. Increase in )roduction of li(estock as the basis of meat and fat su))ly by ad(ances in )lant breeding and efficient feeding.

B.

Then there are the )ossibilities of reducing har(est losses by drainage, conser(ation and im)ro(ement of roads and also other technological ad(ances, which )reser(e fields )roducing food. The last two o)tions do not immediately increase soil )roduce but they contribute so that areas suitable for farming and the )roduce created are used for human nutrition. 8ince the intensi(isation )rocess tends to follow the order gi(en abo(e and (arying degrees of it ha(e already been achie(ed in indi(idual countries, the o)tions still to be ado)ted can be (ery different and, therefore, can only be )ointed out here. ?roduction increases are achie(ed most Juickly by e7tending the areas of culti(ation and im)ro(ement of wasteland and the restriction of fallow land etc. In those central Euro)ean countries where intensi(e methods are used, the amount of land with these features is small, if one discounts the land reclaimed around the coastal area and moorland. "ooking towards the east and south6east, the conditions are Juite different. In these areas fallow land com)rised mainly of arable ground and throughout the south6east around the unregulated ri(ers and tributaries there are large areas, which, cannot be or can only be used in an e7tensi(e way following insufficient drainage. In 3ulgaria and other regions there are arid areas, to which water can be brought. E7)erience has shown that the land in the old ?olish regions is most conduci(e for )loughing because the agricultural conditions are more fa(ourable. E(en in 9rance

large and fertile e7)anses of land are crying out to be culti(ated ha(ing lain idle for decades due to the mo(ement to the cities. 8ome measures taken since the armistice might manage to a(oid an odd tribulation, but now numerous signs indicate that a dee) rooted change and a re(italisation mo(ement is taking )lace. Not only a resettlement of these deserted areas is sought but also there is a dri(e to ele(ate agriculture to become the basis of a whole social structure. @ust the inclusion of those fruit growing areas, which were turned into fallow land after the $A$B6$' war or used for grass growing, would add two million tons of cereal Fgi(en 9rance+s low a(erage yieldsG. .s high as the reser(es of food areas can be estimated to be in the indi(idual countries, a meaningful de(elo)ment for Euro)e+s food )roblem cannot be e7)ected from here. -ore significant is what intensi(e farming methods can achie(e. The stark differences in hectare yields show most clearly now each country+s )erformances (ary. The countries in the south6east are about half and 9rance about two6thirds of Germany+s out)ut, whereas the coastal countries in north6west Euro)e ha(e achie(ed figures which e7ceed Germany+s by a long way on account of their natural conditions and highly de(elo)ed soil culti(ation. @ust increasing the a(erage Euro)ean hectare yield by about 'R would co(er the amount of cereal im)orted in the lead u) to the war. /ectare yields are the result of the combination of soil and climate conditions, the selection of cro) ty)es, growing methods and fertilising etc. /igh reliable yields can only be achie(ed if all of the factors are in a fa(ourable )ro)ortion to each other. In the arable regions of the south6east, the soil conditions can be described as truly fa(ourable. /owe(er, the circumstances surrounding their military defeat mean there are certain limits to what can be done with those resources. Gi(en this set of conditions, greater im)ortance needs to be )laced u)on ty)e selection, resisting )lant disease and a soil culti(ation method based on retaining soil moisture. !n one side there is the need to confront the idea that agriculture in south6east Euro)e should ada)t technologically to reach GermanyTs le(el. !n the other, it needs to be em)hasised that a far6reaching change in the farming economy can only be achie(ed if there is sufficient a(ailability of the reJuired technological eJui)ment. EJui)ment for increasing yields, cro) breeding and fertilising count as the most effecti(e le(ers. /ere are Kust a few e7am)les that show how the breeding of )roducti(e and hardy animal breeds and s)ecies of our most im)ortant (egetables can o)en new o))ortunities for increasing )roduction. With sugar beet it was )ossible in Kust a cou)le of decades to reduce the Juantity of sugar beet reJuired to create sugar from $,H%%kg down to :%%6I%%kg. ?rocessing methods ha(e also made an im)act. EJually significant were the ste)s forward that were made in cereal and )otato breeding. The success of broad head wheat, the most commonly grown ty)e in Euro)e, and of its cross breeds which in the early $'A%+s were not )ro(en e(en

against the mild climate of north6west Germany, is mainly due to ad(ances in )lant breeding techniJues. @ust as "ochow+s ?etkus barley had a marked effect on barley yields, the breeds created by the 8wedish, <anish and <utch seed breeding institutes had a strong influence on the cereal, grass and (egetable yields. .d(ances in breeding techniJues were also res)onsible for making cotton culti(ation in 3ulgaria and sunflower and soya )roduction in to a local ty)e of )roduct throughout the south6east. ro) breeding will therefore remain an e7tremely effecti(e means for the de(elo)ment of food )roduction for Euro)e+s )eo)le. The full im)act in terms of )roducti(ity of the new ty)es and (egetable ty)es in relation to im)ro(ed soil )rocessing and culti(ation could only be truly realised once commercial fertlilisers became more a(ailable. .lmost three6Juarters of the $.Hm tons )ure nitrogen, which was the a(erage )roduction of Euro)e in the two years before the outbreak of this war, was used in Germany+s and north west Euro)e+s agriculture. 3elgium and /olland led Germany in their usage in terms of land area. There was a similar relationshi) regarding )hos)horous. It is true that intensi(e fertilisation is )articularly worthwhile in those areas e7)osed to the climatic influence of the .tlantic, and therefore 9rance+s agriculture is )resented with e7traordinary o))ortunities. In addition, farming in south6east Euro)e could make greater use of commercial fertiliser. Italy is a notable e7am)le in this res)ect, as its agriculture has )ractically de(oted its use of nitrogen and conseJuently increased its )roduction considerably. The natural conditions are more akin in south6east Euro)e and Italy than in relation to Germany. 9arming technology, on the other hand, does not re(eal such differences. The conclusion can therefore be drawn that considerable success can be e7)ected from a more intensi(e use of fertiliser in the south6east countries. If the )ositi(e and negati(e effects of the use of commercial fertiliser are e(aluated, it would be no e7aggeration to say that an increase of H%R can be e7)ected from the use of commercial fertilisers within H6$% years after a return to normal conditions. 9or certain food ty)es, the increase could be as much as &%%R. Thus, the chemical and fertiliser industries are faced with a considerable task. The increase in cereal and feed )roduction )er hectare leads to the o)ening u) of larger areas for growing those (egetables, which )ro(ide huge Juantities of food material or fill ga)s in the su))ly of fat or raw material. In the humid farming areas of western and central Euro)e, it is )otatoes, sugar beet and (egetables in )articular that ha(e by far the highest out)ut )er gi(en area. In south6east Euro)e, maize and oil )roducing )lants gi(e an intensi(e and more )roducti(e edge to its fruit farming industry. 8uch a de(elo)ment )ro(ides three ty)es of )ositi(e effect= workers get absorbed by the labour intensi(e en(ironments, they increase the farmer+s income and they tend to rela7 the rather one6sided farming conditions.

Technological ad(ances, agreements between nations and )lanned control of )roduction ensure that farming organisations undergo a gradual )rocess of change. .t last, cro) )rotection and disease control for our animals became effecti(e tools, as did )rogressi(e conser(ation methods and the reduction of yield and storage losses, which )ro(ided more and more food for human consum)tion. Im)ortant technology at the time included fermentation, drying, cooling and refrigeration. -an was able to learn Juite easily from nature about food drying4 then there came other momentous changes like the )re)aration of ensilage today, artificial drying or the achie(ement of freezing tem)eratures. <istant areas could now be accessed with the hel) of cooling and drying eJui)ment4 sales markets and consumers were brought se(eral hundred kilometers nearer. Taking a longer6term (iew, the o))ortunities for increasing food )roduction are unimaginable, so much so that it seems Juite )ossible for all food reJuirements to be met e(en with the increasing trend. 3eyond this it is )ossible to imagine a de(elo)ment, which releases areas for the farming of oil )roducing cro)s and industrial cro)s or which con(erts sur)lus amounts of carbohydrate into meat and fat, thereby slowly reducing our de)endence on the usual su))ly of fat. 8uch a de(elo)ment reJuires firstly )lanned su))ort and market organisation, which would e7clude strong )rice mo(ement e(en where international trade was concerned. This has already been achie(ed with the countries in the south6east through (arious agreements. The (irgin territory, which has to be disco(ered to e7tend food )roduction )ossibilities for Euro)e+s )eo)le reJuires a sensible interaction between the (arious agricultures and economies. .lso it reJuires more research and education of e(eryone in(ol(ed in agriculture in Euro)e. 9or e(erywhere we look, it is not Kust areas of land and fertile areas but also tools for e7)loiting the soil, the s)irit of in(ention and human deed, which determine the le(el of food )roduction. The human s)irit has to sha)e all the technological ad(ances in a creati(e way in order to make the soil fertile. It does not matter whether these are deri(ed from a dee)er knowledge of our circumstances, which can introduce our farming )eo)le to a more )lanned ty)e of interaction. The efforts made by Euro)e+s agricultural sector to e7tend and finally safeguard enough room to )roduce food will only be successful if the number of )eo)le engaged in agriculture is maintained and a healthy growth relationshi) between it and industry is ensured. The chaotic de(elo)ment in the economies of city and industry and the different working conditions, li(ing situations and income relations made many millions of )eo)le rebellious o(er the last decade in rural areas of central and western Euro)e. This struggle will flare again after the war unless there is a harmonious distribution of work forces in urban and rural areas. In

certain areas it will be difficult to maintain )roducti(ity. The agricultural workforce has to be eJui))ed with better technology and their work needs to be (alued materially and morally so that the difference in li(ing standards between city and countryside are remo(ed. The social conseJuences are of great im)ortance. ertainly the machine can take a lot of work from man, but there are limits to its use. What is needed is a healthy relationshi) in the balance and growth of the large organisations belonging to the nation+s agricultural sector and its industry. If these conditions are met then food )roduction will continue to be the farmer+s essential acti(ity. Not only does the farmer ser(e to sustain the )eo)le with food from the soil but also with another )roduct of our mother soil= his own blood which flows out of the (illages into the cities and su))orts all life. We stand too close to the task of creating change and the future in order to be able to clearly recognise how the order of Euro)e+s agriculture will look or the full details of Euro)e+s food industry, but the outline can now be seen. !ur task will be to turn this outline into a solid structure and to bring it together. It will only be firmly established if it is the result of )eaceful co6o)eration between all of Euro)e+s )eo)le, borne out of the (ital strength of s)iritual ideas and a Euro)ean economic community.

0amphlet 234

)he Euro+ean (ndustrial Economy by !r" %nton Reithin#er, !irector of the Economics !e+artment of ("<" Farbenindustrie %"<", Berlin
It is the following future6sha)ing ideas that )reoccu)y us here= the s)iritual and material )owers+ desire for recognition, which can be used by industry to construct a Euro)ean economic community4 and the Juestion of its )lace and task in the conte7t of a future )eaceful order. 9rom the outset we ha(e to be clear that our theme basically is )olitical rather than technical or economic. Its details are still in flu7, which means that they can only be alluded to and its effects only guessed. .t the same time we should not forget, in s)ite of the reJuisite courage to create new ideas, that the )roblem of a Euro)ean industrial economy is related to Juite real interests which materially affect the )eo)le of Euro)e+s nations to a great e7tent. In order to sol(e these )roblems we ha(e to work closely with the facts and a(oid drifting off in to unrealistic fantasies. I hardly need to em)hasise that neither the material )rinci)les nor the s)iritual dri(ing forces should be o(erlooked, which ha(e created today+s standard of Euro)ean industry. .nd we are not Kust going to limit oursel(es to this continent+s industrial de(elo)ment4 we will also look to the relationshi) with de(elo)ment elsewhere in the world. )he !e&elo+ment of (ndustry in the ./th $entury Now I want to gi(e a )icture of the regional distribution of Euro)e+s industry, which shows the result of the industrial de(elo)ment from the start of the $Ath century u) to the start of World War I. 8een as a whole, the area of Euro)e+s continent is mainly an agricultural one with a relati(ely small nucleus of hea(y industry, with a broad swathe of medium6sized businesses surrounded by an area of )urely agricultural )roduction. !ut of the #%%m )o)ulation of Euro)e, about $B%m make a li(ing from agriculture, H%m from mining and industry and about B%m from manual work and commerce. Industry, in the modern sense, has only de(elo)ed in Euro)e in those areas, which had for centuries been leading lights of commercial acti(ity or which had sufficient a(ailable stocks of coal and iron ore to feed the steam machines used in industrial )roduction. There are therefore two distinct areas of industrialisation= one running south to north which grew along the trade routes of the mediae(al time from north Italy o(er the .l)s to the cities of the u))er ,hein and 9landers. The other, going west to east stretching from /olland to northern 9rance to 3elgium, o(er the ,hein6,uhr areas and mid6Germany u) to the edge of the ar)athians, which holds the most im)ortant reser(es of coal and iron ore. .ll those areas that lacked these two essential ingredients for the technical era 6 coal and iron ore 6 did not take )art in the industrial de(elo)ment of the $A th century. The world+s industrial zones concentrated themsel(es then on the two edges of the .tlantic where coal was )roduced, that is in England, the U8. and in our continent in northern 9rance, 3elgium

and the ,hein6,uhr area. !(er three6Juarters of the )o)ulation in(ol(ed in commerce and industry in continental Euro)e li(ed in these )roduction areas. It has only been the disco(ery of new energy sources 6 the growth of hydro6)ower 6 which has brought about new industrial settlement areas of any size in the south on both sides of the .l)s and high u) in the north in Norway and 8weden. !utside these areas, little industrial acti(ity has de(elo)ed and, for reasons gi(en already, remained )redominantly agricultural u) to World War I. 'ta#es of )echnical and Economic !e&elo+ment .gainst the background gi(en abo(e we can start to look into the actual stages of technical and economic de(elo)ment. 9rom craft guilds whose technical basis and sales market was the core of the mediae(al town, there then de(elo)ed manufacturing and factory )roduction eJui))ed with steam6dri(en machines. -anual work was su))ressed by the chea)ness and s)eed of the machine4 two factors that are truly decisi(e for an industrial organisation and the )rice of its finished goods. .s we turned from )roduction against order to ca)italist market6 led )roduction, costs, )rice considerations, the organisation of sales markets and the Juestion of finance determined all further de(elo)ment. If we ask oursel(es what we learn from this for our deliberations on the Juestion of Euro)e+s future industrial economy, then first of all it is the fact that there has been little fundamental change in the regional structure of commercial and industrial acti(ity in continental Euro)e. This ha))ened des)ite the )re(ious re(olutionising of all technical and economic )rece)ts, e7ce)t for the marked )rocess of concentration towards the middle of central Euro)e. 3efore we draw any conclusions, we need to look at the socio6)olitical effects. 'ocio=Political Effects It was the ci(il guild order, which settled all the )olitical and social )roblems of the mediae(al craft system. .s manufacture and factory )roduction started and considerably increased the wealth and )ower of the indi(idual countries, national and )olitical interest in its further de(elo)ment grew. This era started with go(ernment measures to )romote it with duty )rotection, )recautions against o(erseas dis)lacement and it ended with serious battles o(er new raw materials and sales markets, o(er colonies and new areas of )ower. Its re(olutionising effect did not only confine itself to the great industrial countries, but also totally transformed the )olitical and social face of the whole world. !n the Euro)ean continent it led to a doubling of the )o)ulation figure after it had stagnated during the $Ath century and to a Juintu)ling of the standard of li(ing and income of the workforce. Towards the end of the $Ath century, two thirds of the northern hemis)here

and its )o)ulation was in the direct )ossession of Euro)e, while the rest was (ery much de)endent on Euro)e economically and financially. Under the industrial tutelage of Euro)e, world agricultural )roduction increased fi(e6fold in Kust one hundred years, industrial )roduction twenty6fold and trade fifty6fold. .ll that the result of industrial de(elo)ment, which created ca)italist im)erialism and which, at the same time, )ro(ided means of trans)ort and wea)ons for its e7)ansion around the globe. Ne(ertheless no inner balance was e(er achie(ed, because the social effects were o(erlooked, obser(ing instead the im)ressi(e e7ternal signs of success of ca)italism+s )roduction technology. If industry de(elo)ed somewhere, there was a total re(olution in the manner of settlement, in the )rofessional and class structure, in the li(ing and eating habits and of course in the way life was (iewed and in the s)iritual forces. .ll of these conseJuences were no longer in tune with the traditional order of society. While the argument between the great industrial )owers about new raw material and sales markets reached its )eak, internally the additional millions of inhabitants, created by the manufacturing industry o(er the )re(ious decades were fighting for an im)ro(ement of their social situation and latterly for )ower within the state. !n the one side there stood a coalition of labour forces and on the other were the efforts of entre)reneurs to achie(e international economic agreements, raw material cartels and sales agreements. The second obser(ation we can make is that industrial de(elo)ment had great )olitical and social significance, as its socially destabilising effect had to be a))ro)riately controlled to ensure that une7)ected sur)rises were not encountered. The technical and )ri(ate economic )art in the factory was s)ectacularly disengaged by the entre)reneurs of the ca)italist era, but the socio6)olitical conseJuences for the state and society outside the factory were barely )erce)tible at first. arried across Euro)e, it meant that all industrial )lans had to take into consideration both the technological and economic as)ects as well as the related socio6)olitical ones. )he 5oss of Euro+es (ndustrial e#emony in the World War

Ne(ertheless these )olitical and social signs of disintegration of the social order of the time would not ha(e led to colla)se if the world war, and the unfortunate )olicy of the (ictorious )owers had not destroyed the basis for the maintenance of the old economic system. What ensued was the well6known crises following the war, the global colla)ses of the agricultural and economic economies and an international unem)loyment figure of o(er #% million )eo)le. We do not need to dwell on this subKect, but we should realise a decisi(e change. Whereas u) to the end of the $A th century, Euro)ean industry, under the leadershi) of the English, )ractically ruled the whole world, there rose u) in Kust a few decades three new centres of industrial de(elo)ment= the U8., @a)an and, under a totally new system in Eurasia, ,ussia. E(en at the start of this century, more than half of the

world+s industrial )roduction was concentrated in Euro)e4 today each of the three continents, .merica, .sia and Euro)e ha(e a share of about one third each. The second )icture shows the le(el of industry in Euro)e and the rest of the world about $H years after the end of the world war. It is )articularly im)ortant to look back at this because it re(eals some of the inner forces, which are still ha(ing an effect today and should therefore not be o(erlooked regarding the new order of Euro)e+s industrial economy. The world war released industrialising tendencies in the band of territory around Euro)e and in almost all o(erseas agricultural and raw material areas, which ha(e become considerably stronger during the subseJuent economic crisis. The reasons for this de(elo)ment are of a )olitical and economic nature. 9undamental changes to the system of international trade relations and thus to industrial economies were brought about by the following factors= the disturbance to international currency and credit bodies caused by the world war, the re(ersal of balances of )ayment of debtor and creditor countries, the stronger efforts to )rotect agriculture by the old industrial nations and, last but not least, the change in )olitical (iews about the )osition of the state in relation to the economy. Then due to the big dro) in )rices for raw materials and agricultural )roducts com)ared to finished goods, the ga) between wages and the cost of li(ing in the old industrial nations grew so big in relation to that in the agricultural countries, that des)ite a lack of ca)ital, technological backwardness and other difficulties, it was )ossible to start u) their own industrial )roduction. The causes were multifaceted but the result was sim)le. Whereas the out)ut of the old Euro)ean industrial countries like England, Germany, 8witzerland and 3elgium fell by &%6#%R, that of the agricultural countries rose by H%6$%%R. The out)ut of o(erseas agricultural and raw material countries rose by &%%6#%%R and in 8o(iet ,ussia by B%%6H%%R. !(erall, Euro)e had fallen back so far in relation to the de(elo)ment of the (ast o(erseas regions, that a combination of this trend right here endangered its whole standard of li(ing and culture. .s England had ignored its duty to Euro)e due to its interests o(erseas, the )eo)le of Euro)e now ha(e to attend to it. )he )ransition to 'tate !irection and Plannin# In the fight against these signs of general and economic and social disintegration, in which the industrial hegemony of Euro)e disa))eared within our generation+s time, some far6reaching inner changes had taken )lace first, which soon )roduced conseJuences in the economic arena. !ut of Italy and Germany emerged the idea of a new order for the economy, o(ercoming the system of ca)italistic liberalism with the creed of state direction and )lanning. /owe(er, we ha(e to remain aware that, contrary to the de(elo)ment of the $Ath century )olitical, social forces 6 not technological, economic ones 6 caused this turn6around. These forces are found e(erywhere in Euro)e, so we ha(e to sto) to deal with their fundamental tendencies. There are three factors that influence the most recent de(elo)ment of

Germany+s industrial economy and which will be significant in the framework of a future Euro)ean industrial economy. -an should control the machine, not the other way round4 the nation should use its economy and technology to achie(e its goals rather than technical, economic de(elo)ments controlling the nation. The increase in )o)ulation resulting from industrial de(elo)ment has to be incor)orated into society. This has to be followed by the new order with the social )osition of work, the coalition of em)loyer and em)loyee at work, the organisation of work in the factory and the change of our whole conce)t about law, security and the duty to work, labour )rotection and the beauty of the work)lace, whose effects reach ultimately as far as the home and retirement )ensions. The su)ra6national forces of de(elo)ment, technology and industrial economy will again be )laced under national control. These few references may suffice to describe the com)lete change from the )ast. The second factor is that of li(ing order and )lanning. Industrial de(elo)ment in the liberalist ca)italist era )roceeded almost e7clusi(ely according to technological and financial moti(es. It selected its )roduction sites, raw material and sales markets both inside and outside Germany according to the )rinci)le of chea)est costs and )rices, and regarded its land as an o)en arena for its )ri(ate economic interests. .t the same time, though, national territory gained its own identity again in the conte7t of the nation+s territory )olicy. E(en industrial de(elo)ment is brought into line with the reJuirements of a structural )lanning of land, with the needs of the )o)ulation )olicy, with the economic security and cultural factors. This de(elo)ment, which has ha))ened in Germany and Italy, will ha(e its effects felt throughout Euro)e. The third factor is determined by the need to achie(e a solution to the Juestion of raw materials and sales. The technological )osition of the $A th century bound industrial de(elo)ment closely to the )ossession of coal and iron. In this century numerous new materials of significance for the industrial and )olitical hegemony ha(e come forth 6 oil, coloured and light metals, India rubber, nitrogen, cellulose, s)inning materials 6 and this de(elo)ment is nowhere near at its end. E7ce)t for coal, iron and light metals, the great reser(es of all these raw materials (ital to modern industrial economies and world )olitics lie outside the borders of Euro)e. The legacy of the )re(ious centuries+ de(elo)ment in Euro)e is )rinci)ally the scientific and )ractical knowledge reJuired to disco(er and )rocess these raw materials on an industrial scale. There is also the considerable need for consumer goods for #%% million )eo)le with a relati(ely high standard of li(ing. Therefore, the Juestion of securing a su))ly of raw materials for Euro)e+s industry becomes not only one about the life of its industrial economy, but also one about Euro)e+s economic and )olitical future. This is true whether it means increasing agricultural and mining )roduce or )roducing barter and substitute goods like fuel and India rubber from coal, nitrogen from air, straw or reed, synthetic fatty acids

etc. !r finally, whether it means securing access to the world+s tro)ical raw material regions. .fter the safeguarding of su))lies of raw materials, the other im)ortant Juestion is how to )rofitably )roduce and create markets in the enlarged area, instead of many indi(idual com)artments all )rotected by duties. /owe(er, we now find oursel(es in the midst of this )roblem for our Euro)ean industrial economy. We ought to familiarise oursel(es with some fundamental ideas regarding the )ossible new order in Euro)e so that we do not lose our way early on in this new land of wonderful ho)es and dreams. 4e3 Euro+e and its 'hared Features "et us be clear from the start that the new Euro)e was a military fact, which was created by the 3ritish blockade forced u)on the mainland. 8ince the war against 8o(iet ,ussia, it has assumed a )olitical as)ect. The *Euro)ean Economic ommunity+ is in no way yet a sure fact, rather a )olitical aim, which has to be su))orted by carefully considered economic, technical and )sychological measures and achie(ed through effort. This is also true for trade and currency )olicy or the agricultural economy in relation to our theme here of the Euro)ean industrial economy. We ha(e to differentiate between the )resent needs under the circumstances of war and those of a future )eaceful order, which will look (ery different from the wartime organisation. 8econdly, we must not o(erlook the fact that Euro)e consists of a number of nations that ha(e *arri(ed+ historically. They ha(e undergone a long )olitical and economic de(elo)ment and now think about a new order in Euro)e and ha(e clear ideas about industrial de(elo)ment. @ust as our thoughts ha(e crystallised about a better Euro)ean economic order as a result of our need and )light, so ha(e those of our )artners and neighbours. 8o if we )ool our thoughts with those of other countries about our needs, then we should start to see the differences in economic structure and industrial forces, which are so (ery different from before this war, on account of the natural conditions across this continent and the historical de(elo)ment and )olitical relations. !nly then can we consider which Euro)ean interests are shared by all our )artners and where indi(idual interests ha(e to su))ressed in fa(our of the greater Euro)ean common interest. I will begin with the common factors, which are (alid for the economy as a whole, but )articularly for industry. 9irstly, though, some general, guiding )rinci)les because they are the )hiloso)hical basis of the future Euro)ean economic order. In first )osition is the )rinci)le of mutual co6o)eration in )lace of e7clusion and hostile com)etition. Three factors affirm this= one technical, one economic, and one social. -odern technology has o(ercome the old )rinci)le of economic )olicy, which says, 2I am doing well as long as my neighbour isn+tN5 It has created such enormous )owers of )roduction that the )rinci)le of an ordered economy in a new

Euro)e has to be, 2I am only doing well if my neighbours are as wellN5 In an enlarged area, )roduction ca)acities can be utilised much more effecti(ely and sales markets better ser(ed than in an area with lots of small regions )rotected by duties. .s a result, all )artners gain from the economic ad(antages achie(ed. In the end, our concern is that )urchasing )ower, standards of li(ing and social conditions im)ro(e for all Euro)ean )eo)le now and far into the future. The second )rinci)le is that of full em)loyment i.e. utilisation of the labour force, natural reser(es and technological ca)acities. Taking account of the comments that I made on the Juestion of raw material su))ly for Euro)e+s industry and the loss of its hegemony to o(erseas countries since the world war, this is a common need relating to all Euro)ean )eo)le. This is if they want to maintain the economic and )olitical significance of our continent and its high standard of li(ing and culture. That means that e(ery Euro)ean country has to work together to mobilise their natural resources, industrial ca)acities and human reser(es to the highest )ossible degree. This is a key issue for waging the war and for the subseJuent )eaceful order and it is also (ital for de(elo)ing the welfare of Euro)e+s economy and society. The third )rinci)le is related to a regional order of )roduction and sales in Euro)e. .longside the new economic factors of this arena, the old industrial economic )rece)ts of the )ast will come clearly to light and Juite Kustifiably will remain significant. Industry has to be de(elo)ed and directed in the sense of an e7tremely com)rehensi(e su))ly of goods for the whole region. In doing so, one will ha(e to distinguish between the )an6Euro)ean factors of )riority and the legitimate economic needs of em)loyment and consumer goods su))ly for the indi(idual countries. ?riority will be gi(en to the utilisation of energy sources 6 coal, natural gas, hydro6)ower, crude oil 6 of raw material reser(es like bau7ite, wood, iron ore, iron )yrites etc. It will also a))ly to the su))ly of (aluable technological )roduction eJui)ment, which if used efficiently should ensure good sales markets. With these )oints, the )lanned e7tension of raw material industries in Norway and south6 east Euro)e are (ery closely linked. .gainst it, the national factors of the indi(idual countries will be mainly concerned with em)loyment, safeguarding eJui)ment needed for agriculture and sufficient su))ly of consumer goods. ?ro(ided labour, sales and raw materials are a(ailable, the )re(iously referred to tendencies of Euro)ean agricultural countries towards the de(elo)ment of their indigenous consumer goods industries are absolutely reconcilable with the new order of Euro)e+s industrial economy. . further im)ortant )roblem for the new order lies in the area of foreign trade in industrial goods and the controlling of sales markets. /ere one has to distinguish between markets, which are reser(ed for indigenous )roduction and those which ha(e to be o)en to all of Euro)e+s )roduction. If the )rinci)le, that in the enlarged area only effecti(e industries should be de(elo)ed, is realised with the corres)onding technical and financial hel) e(en for the backward agricultural countries, then duties and other obstacles to a healthy foreign trade will lose their

im)ortance. It must, howe(er, be a(oided that, after duty )rotection has gone, inefficient and un)rofitable )roduction units de(elo), which would rather inhibit the su))ly of goods to the )o)ulation. If we consider the future de(elo)ment of the Euro)ean industrial economy in the light of these three factors described abo(e, then there is no doubt that there will be new de(elo)mental im)ulses not only for the old industrial countries but also for the agricultural areas on the edges of Euro)e. This could lead to a higher standard of li(ing for all Euro)e+s countries. The number one )rinci)le must always be that the indi(idual regions create )rofitable )roduction units, regardless of whether one thinks about maintaining duty barriers or a duty zone. These are )roblems, which are not so im)ortant as one would generally belie(e. .t the moment we are nowhere near that far, and abo(e all, the differences and iniJuities of the indi(idual Euro)ean sub6regions are too large and the economic ga)s, which ensued after the war and the blockade, are still too )ainful for the countries affected. In order to gras) all this, I want to list some of the most im)ortant iniJuities, which urgently need to be remo(ed within an economic system, which is aligned to a new central Euro)ean centre. Re#ional !ifferences in Euro+e Euro)e can be di(ided u) in to fi(e geogra)hical regions of a similar economic structure. $. The middle of central Euro)e Fbasically the German ,eichG with at the moment A%%,%%%km& and $$I million inhabitants. &. West Euro)e F9rance, 3elgium, /olland and 8witzerlandG with :B%,%%%km& and about :%m inhabitants. #. 8outh6east Euro)e F8lo(akia, /ungary, roatia, 8erbia, 3ulgaria and ,omaniaG with II%,%%%km& and HHminhabitants in total. B. 8outh Euro)e FItaly, 8)ain, ?ortugal and GreeceG with $m km & and about 'Hm inhabitants. H. North Euro)e F<enmark, Norway, 8weden and 9inlandG with $.&km& and $Im inhabitants. These fi(e regions ha(e com)letely different economic and social structures and differ from the large regions o(erseas. The middle of central Euro)e is )redominantly an industrial area and densely )o)ulated, in which concentration of )o)ulation has led to a high degree of urbanisation. /ere, about two thirds of the )o)ulation are acti(e in commercial Kobs, whereas the rest of Euro)e is dominated more and more by agriculture as you mo(e out to the edges. The former has a strong e7ternal economy and balance of )ayments and its industry e7tends o(er the

whole area of Euro)e. !nly the eastern )art of west Euro)e Koins onto the industrial area of central Euro)e 6 the coal and iron reser(es in northern 9rance, 3elgium and /olland+s bordering area, as well as 8witzerland 6 and the main core of 9rance is )redominantly agricultural. This area does not ha(e a strong e7ternal economy or balance of )ayments and )roduces less than it consumes i.e. it is li(ing off its ca)ital. In the near future it will e7)erience difficulties ada)ting to the Euro)ean economic community and will lack any great internal de(elo)mental im)ulses. 8outh6east Euro)e, though, has undergone a high degree of urbanisation and industrialisation because of the high birth rate, but in its basic structure still retains its o(er6)o)ulated agricultural status. The same is (alid for south Euro)e. In the framework of the Euro)ean economic community, both of these areas will de(elo) strong industrial forces, whereas northern Euro)e corres)onds more closely to west Euro)ean ty)e. To get an idea of this difference I ha(e some statistics, which are (ery im)ortant for a new order in Euro)e in terms of out)ut and sales of its industrial )roducts. In our enlarged economic area, birth6rates and )o)ulation density ha(e increased, unlike income le(els and s)ending )ower, which are ra)idly falling. ,ight out in the west we ha(e a ta7 sur)lus of %.H6$.% )er thousand of )o)ulation, whereas that figure goes u) to $H6&% )er thousand in the furthest areas of the south and east. $%%R of the )o)ulation in the ,hein6,uhr area is engaged in commerce, falling to %R in the )eri)heral regions of Euro)e. !n the other hand, in the west and north the rural )o)ulation figure )er sJuare kilometre of agricultural land is B%6H%, in the south and east that figure doubles. If one considers that the yields in the east are only about a half of central and western Euro)e and the )rices are way below those of Germany+s agricultural )rices, then one is soon led to the conclusion that the )urchasing )ower )er ca)ita in the south eastern areas is )erha)s only an eighth to a twelfth of that of western Euro)e. This is Kust an introduction to the enormous structural differences between the regions of our enlarged Euro)ean economy. I ha(e to add some figures related to the le(el of consum)tion so you ha(e an idea of the difference in s)ending habits. Te7tile consum)tion in the south6east is between one half and one third of that in the north6west4 for industrial )roducts the figure is one fifth to one twentieth. Thus we see the im)ortance of recognising the regional differences. 9or instance, if the le(el of consum)tion in the south6east were to match that in north6east Euro)e, then not only would the total food and feed e7)ort sur)luses of south6east Euro)e disa))ear, but then the demand for industrial )roducts would be so great that Euro)e could easily absorb the entire stock of finished industrial goods intended for o(erseas e7)ort. In the e7ternal economy of the Euro)ean continent, under normal conditions, the demand for industrial raw materials and the sales of industrial goods are the most im)ortant factors, unlike the trade in food and lu7ury goods. !ut of Euro)e+s total im)ort figure before the war, about ,- :.H billion was raw materials and only ,$.# billion was for food and lu7ury goods, whereas the e7)ort sur)lus in finished

goods stood at ,- B.& billion. In the new order of the enlarged area of Euro)e food su))ly will be the main concern of Euro)e+s internal )roduction, while the su))ly of industrial raw materials and the sale of finished goods )resu))oses a strong economic connection of Euro)e to the other large areas es)ecially .sia and .frica. These few statistics re(eal some basic facts about the )re(ious economic structure of the Euro)ean continent, which are of fundamental im)ortance for deliberations on the future industrial co6o)eration. E(en under )eaceful conditions, there are huge difficulties in aligning these indi(idual regions in the framework of a Euro)ean economic community. The war has sim)lified some of these reJuisites because it cut off the earlier relationshi)s to areas outside Euro)e, whereas it has made others a lot more difficult because the demands of war are Juite different to those of )eacetime. /a(ing dwelt on the differences and different interests of our )artners, we should bear in mind our common interests. Earlier on I summarised the three )rinci)les of co6o)eration, full em)loyment and the regional organisation of )roduction and sales. In order to realise them, we need the belief in the Euro)ean idea and Germany+s duty towards Euro)e. 3esides that, the long )atient work of the state+s economic )olicy and also )ri(ate business initiati(e are reJuired, as well as a high degree of tact and understanding of the inter6nation construction work with Euro)e+s social and geogra)hical community. )he Ma2or Po3ers at War = % $om+arison of their $a+abilities /a(ing dealt in some detail with the reJuirements and ideas of a future Euro)ean industrial economy, I would like to finish by taking a look at the areas outside Euro)e and the industrial relationshi) between the maKor )ower coalitions at war with each other today 6 the Euro)ean6east .sian )act against the .nglo6.merican6 ,ussian bloc. om)aring their relati(e industrial ca)acities is of interest, as enemy )ro)aganda tends to e7aggerate the ca)acity of the U8., leading to the )er)etuation of false ideas. This com)arison, though, is based on )re6war figures, which will ha(e changed considerably for both sides as a result of the war. /ence the figures Kust show the situation of the two coalitions as they entered the war. ,oughly about :Hm )eo)le were em)loyed in mining and industry within each of those areas under the control of the two coalitions. Great 3ritain and the U8. eJually shared #%m, as did Germany and @a)an. 8o(iet ,ussia had about $Hm, whereas Italy and the smaller )act )artners totalled about Am. <es)ite the addition of the U8., there was also a roughly eJual balance in a(ailability of installed machinery. E7cluding electricity )lants, the out)ut of )rimary machinery for both )ower grou)s was B% million b.h.). Fbrake horse6 )owerG and that of electrically dri(en machinery :%m b.h.).. In ,ussia and Great 3ritain, the electricity )lants )roduced 'Hm b.h.). com)ared to HHm b.h.). in the

three )act grou). This shows that in o(erseas areas a larger )art of energy )roduced was not used by )ublic utilities but was di(erted for domestic use. Now I want to try and illustrate the com)arati(e industrial out)ut figures, which ha(e to be at face (alue because of the lack of certainty about calculation methods and difficulties in con(erting to a uniform (alue basis. World industrial out)ut in $A#' stood at ,- B&% billion of which &B% billion was accounted for by the .nglo6 ,ussian grou), $H% billion by the three )act grou) and the balance came by ,ussian territories under occu)ation today and those countries not in(ol(ed in the war. .merica, in the .nglo6,ussian bloc, had an out)ut of ,-$H% billion 6 about one third of world )roduction against Great 3ritain+s share of AR. The .nglo68a7on grou)+s share of world )roduction was about one half. Germany is easily the biggest )artner in the Euro)ean grou), which, like the U8. had about one third of world )roduction. .bout ,- '& billion for those countries at war, #$ billion for the occu)ied areas and $% billion for the neutral countries. East .sia 6 roughly on a )ar with Great 3ritain 6 )roduced about &H billion, only about :R of world out)ut. There was a much more fa(ourable relationshi) for the tri6)artite grou) concerning out)ut of industrial )roducts, such as iron and steel, cement, construction materials, wood, nitrogen, chemicals etc. There is unfortunately no time to bring in additional obser(ations relating to these figures. !nly (ery rough e(aluations of each )act+s economic )otential can be gi(en without including a whole list of other factors. The two sides within the three )act grou) 6 Euro)e and East .sia 6 are to a large e7tent inde)endent of one another, whereas the .nglo68a7on6,ussian coalition com)rises si7 (ery uneJual )artners= U8.U anada, Great 3ritain, 8o(iet ,ussia, 8outh .frica and .ustraliaUNew Oealand. They are s)read around the globe and can only be held together militarily and economically through maritime su)eriority. The U8. with two6thirds of its side+s industrial ca)acity is se)arated from its )act )artners by two oceans and has to di(ert a large )art of its )roduction to making trans)ort eJui)ment and then trans)ort them huge distances for its de(elo)ment in war zones. It is of course wrong to underestimate one+s o))onents and we should always be aware of the huge out)ut ca)acity of the U8., as e(idenced abo(e. If we com)are Euro)e+s industrial ca)acity with that of our .sian comrades, we can look forward to further de(elo)ment and not be intimidated by the wa(es of )ro)aganda from the other side of the ocean or be )ut off our duty to Euro)e. While the battle rages around the borders and coasts of our continent, the foundations of the future new community of the west ha(e to be )ut in )lace. Industry, too, is faced with a duty to the future in this scheme of things.

0amphlet 23;

)he !e+loyment of 5abour in Euro+e by !r" Phili++ Beisie#el,

Ministerial !irector of the Reichs 5abour Ministry Euro)e has awoken, the idea of a united Euro)e is marching and cannot be sto))ed. The combination of )olitics and military forces has already led to a close co6 o)eration of a cultural and economic nature. Numerous economic treaties between Euro)ean nations, es)ecially Germany+s )artners, re(eal the firm will of Euro)e to assert itself in s)ite of the war and in s)ite of, or because of, the English and .merican blockade. In the enlarged economy the )eo)le of Euro)e want to gras) and master their own fate. .s discussed )re(iously, the food Juestion in Euro)e has been safeguarded and in most countries it is )ossible to achie(e considerable increases in food )roduction. .lso the su))ly of raw materials is now safeguarded. Through a fair and )ragmatic distribution of necessary foodstuffs and industrial raw materials and through an effecti(e trans)ort system and a reasonable currency )olicy, it is )ossible to ensure that food and commercial goods from Euro)e actually go to benefit its inhabitants. E7tensi(e agricultural )roduction )ossibilities and dee) industrial reser(es of raw materials are no good on their own. They can only be of use if sufficient numbers of workers are a(ailable to utilize them and if the reser(es are de)loyed as efficiently as )ossible. ?roducti(e humans are key to the Euro)ean economic community, not coal and iron or economic treaties and currencies. Po+ulation !ensity, 4umber and 'tructure of the Em+loyed !ut of the world+s )o)ulation of &,$IH million inhabitants, $,$A:m li(e in .sia and H#$m in Euro)e i.e. about one Juarter. .merica has &IIm, .frica $:%.:m, .ustralia and the islands of .sia ?acific $%.'m. !f greater rele(ance here is the )o)ulation density. Euro)e has easily the highest rate with B:.H )eo)le )er km &. .sia has &'.I, .merica :.Hm, .frica H.#, .ustralia and .sia ?acific $.#. The density rates (ary greatly among the Euro)ean countries. The highest is 3elgium with &IH.&, then /olland &H#.', Great 3ritain and Northern Ireland $AB.:. Germany including 3ohemia and -ora(ia has $#&.#, Italy $#B.I, Norway A.$, 9inland $$.& and 8weden $H.H. !f e(en greater im)ortance is the number of workers and their distribution o(er the three main economic segments= countryside, and forest, industry and mining and trade and trans)ort. In Euro)e+s economy there are &HHm workers, the most of which are in ,ussia F'B.BmG and the least F$.HmG in 8lo(akia. Germany has BBm, or H&.&m including its )rotectorates. Great 3ritain and Ireland ha(e &Bm, Italy $Am, 9rance &&m. In ,ussia before the war, HI.BR of its )o)ulation was em)loyed 6 the highest rate in Euro)e. The lowest rate was in 8)ain #I.&R. Germany had BA.HR.

A&m out of Euro)e+s &HHm workforce were female. In Germany #'.&R are female, in 9inland B$.$R, in 3ulgaria BH.&R, ,ussia B:.:R, Italy &'.:R, 9rance #:.HR, England &A.'R and 8)ain $&.AR. The distribution of the workforce gi(es an interesting insight into the economic structure of Euro)e. In Germany, &A.&R of its workers were in the countryside and forest economy, B%.:R in industry and mining and $:.:R in trade and trans)ort. These figures include ?oland, which is now )art of the ,eich. In $& of the &# countries of Euro)e more than H%R of the workers are in the first segment. In ,ussia it is 'HR, 3ulgaria '%.AR, former Dugosla(ia I'.'R, ,omania I'.&R. ?articularly low rates are in Great 3ritain and Ireland I.AR, 3elgium $I.$R. 3elgium though has the highest )ro)ortion of workers in industry and mining with B'.AR, Great 3ritain and Northern Ireland B'R, 8witzerland BB.AR and Germany B%.:R Peo+le = )he Wealth of Euro+e &HHm workers re)resent a fantastic wealth for Euro)e and an immense force, )ro(ided they are de)loyed )roducti(ely. 9or many countries recently, though, it has )ro(ed difficult to )ro(ide its inhabitants with bread and work, and the effects of the war and blockade are still being felt. In $AB% there were o(er B.&m unem)loyed in $H countries com)ared with &.Hm the following year. These figures include Great 3ritain and Northern Ireland, but not ,ussia and the smaller nations. In many nations the figures refer only to the unem)loyed )eo)le recei(ing state benefits and also many unem)loyed )eo)le are not counted because they a(oid registration, so the real figure in Euro)e at the moment is actually far higher. .s we all know, Germany has no unem)loyment now and the )resent em)loyment )osition is not go(erned by figures for the unem)loyed, instead by the number of Kob (acancies counted at each month end. 8ince the start of $AB$ this figure ranges between $.H6$.Im, at the end of the year it was $.H:m des)ite the em)loyment of $.Hm )risoners of war and the de)loyment of &.$Bm foreign workers in Germany. The figure for reJuired workers is actually higher than those cited abo(e and it has increased considerably in the last few weeks. It is com)letely wrong for our enemies, )articularly England, to describe Germany+s em)loyment situation as catastro)hic, because we lack the workforce for the economic waging of war. The figures Kust show that the economy is stretched (ery thin and is ready for the total war, right down to the smallest factory unit. Unlike England and .merica, we are )leased to do without industrial worker reser(es amounting to se(eral hundred thousands of unem)loyed, which might suit the liberalistic and )luralistic systems of our enemies 6 not so in national socialistic Germany. Unem)loyment in the last century forced millions of Euro)eans to turn their backs on Euro)e and to seek a future for their families outside Euro)e. The Euro)ean economy lost (aluable )eo)le. 3etween $'#% and $A$%, B.IIm Germans emigrated

to the U8.. In one year before the war between $ @uly and #% @une $A$# $.%:m emigrated from Euro)e to North .merica4 %.&:m from Italy, %.&Hm from .ustria6 /ungary, #B,%%% from Germany. Emigration figures to anada and 8outh .merica were %.$#m from Italy, #:,%%% from .ustria6/ungary and %.&#m from 8)ain. The emigrations are Juite unrelated to the internal worker emigrations within the same country, as we ha(e seen for centuries in most Euro)ean nations. Think of the craft Kourneymen of earlier times, of the agricultural and commercial seasonal migrant labourers, of the )o)ulation shifts related to industrial locations, of the influ7es and outful7es to and from areas, which in the last si7 months (aried between $H%,%%% and &%%,%%% in Germany. !f course, it is only the emigrations, which re)resent a loss of worker resource but in the new Euro)ean economy there will be no more emigrations and certainly none due to insufficient em)loyment o))ortunities and food )roblems. .fter the war there will be no unem)loyment for those able and willing to work. There is no doubt that it is the best for the indi(idual worker and for society if he can find work and food near to his home. In a familiar surrounding he can normally )erform better and more )roducti(ely than the )erson working away from his home)lace. Each nation will ha(e to endea(our to create sufficient em)loyment o))ortunities for its members. If these are lacking, measures are reJuired to create new ones. In all its efforts to further em)loyment, each nation has to remain conscious of its duty to the Euro)ean economic community to which it belongs. This wold entail establishing a reasonable distribution of labour, which relates to the natural )roduction conditions of each nation or working together with the economies of others nations for mutual benefit. If sufficient work cannot be offered in one country, then it is recommended that this sur)lus is de)loyed in those countries lacking labour, thus creating a de)endence on that country. 8uch a system of labour e7change regulated by the state is of great benefit to all concerned. Unem)loyment is a huge financial burden on the state, as they need to be su))orted. Germany e7)erienced this in $A## when billions of reichsmark were reJuired for su))lying those not being )roducti(e. The )olitical danger though is far greater from this army of unem)loyed, who lose their belief in themsel(es, their country and thus become a danger to the state. If they go and find useful work in other nations, the mother country sa(es a lot of e7)ense, the worker feels he is a (aluable member of the community and he maintains a sense of family. "ater he can return to his home accustomed to work and ready for it. /e has increased his knowledge and (ocational e7)erience, gained from li(ing elsewhere and thus can be fully em)loyed on his return. The maKority of workers away from their home country ha(e left their family and de)endents behind who de)end on the sa(ings of the breadwinner. /e sends back what he sa(ed and when he returns he brings more which benefits his home economy. The following figures show the financial im)ortance of sa(ed income=

In $AB% foreign workers in Germany had sa(ed ,- $&%m and transferred it home (ia the German clearing system or by )ost office account. In $AB$ the figure was ,- #'&m. ,- &':m was sent to Italy, ,- :Bm to 8lo(akia, ,- #Bm to 3elgium, ,- &:m to <enmark. There are also those who send no money back to their families or who are single. 8ometimes sa(ings are stolen by border gangs from those tra(elling home. 8ingle )eo)le tend to take money home when they tra(el back. 3etween $AB% and $AB$ one can reckon at least half a billion reichsmark flowing back to other nations. .lso it means for the home country that no su))ort )ayments ha(e to be made to those left behind as well as recei(ing the benefit of large amounts of foreign currency. 9or decades Germany has )ro(ided workers from other Euro)ean nations with sources of income 6 the number of Kobs de)ending on what the economy could absorb. In the $'A%+s we had H%,%%% foreign agricultural and by the world war we had %.B#m. In our manufacturing, construction and mining industries in $A%I we had about %.BHm. 3y World War I the total figure was $m. The colla)se of our economy naturally meant a big reduction in these numbers. -illions of our own workers could not get work. In $A#& the figure stood at %.$Bm foreigners of which %.$m were em)loyed in industry. These were )eo)le who had li(ed in Germany for years, were of German origin or were married to German )eo)le. .fter $A## the German economy grew stronger and unem)loyment disa))eared meaning each year more and more foreigners could be em)loyed. 3y the time of this war, half a million were em)loyed here, half in agriculture and half in industry and commerce. Em)loyment of foreigners grew e(en Juicker as the war )ut )ressure on the economy and also took millions of our men to the war6front. 3y .)ril $AB$ there were $.Hm foreign workers and by 8e)tember a )oll re(ealed about &.$Bm, of which %.BIm were women. E(ery nation of Euro)e is re)resented and in the winter months a large number of them returned home. <es)ite this, in @anuary $AB& figures showed an increase in the number of foreigners em)loyed in agriculture. .t the end of No(ember $AB$ the $%%,%%th 9rench worker was registered here, by mid6@anuary the &H%,%%%th 3elgian. The first mo(ements of 8)anish workers began in <ecember when we also agreed with the ,omanian go(ernment to take o(er $:,%%% workers. !f the &.$Bm foreign workers, $.%'m FH%.IRG were in commercial businesses, %.AHm FBB.'RG in agriculture or forestry. The other H%,%%% F&RG were in commercial rSles or the domestic economy. The im)ortance and the influence of these workers can be Kudged by the fact that in 8e)tember $AB$, '.H out of e(ery $%% workers on a(erage were foreign. -en re)resented $%.A and women B.I out of e(ery $%% of their se7. $.'R of manual labourers, &#.&R of hel) workers and again &#.&R of female workers em)loyed in agriculture were foreign. The high numbers recorded today here are unusual and are due to the state of war. Those men fighting at the front today by far e7ceed those em)loyed here from

other countries. !ur men are in action from the North a)e to the deserts of .frica, from the .tlantic o(er to ,ussia. !ur air)lanes are all o(er Euro)e, .frica, the -editerranean and the .tlantic and our na(al forces are acti(e $,%%%+s of miles from home. Dou can see that such a military force will reJuire a huge amount of wea)ons, ammunition and war eJui)ment to be )roduced and maintained by millions of additional workers. Germany does not Kust su))ly its own army with wea)ons, it also su))lies its allies with a large array of war6related )roducts, it su))lies coal, food, machines and kee)s a sensible trade balance for the im)ortation of goods needed for the war. Germany can, therefore, claim that it is not fighting for itself but indeed for all of Euro)e, and so it is correct that Euro)e contributes additional numbers of workers and that foreign workers em)loyed here remain conscious of their common duty. Worker E*chan#e on the Basis of (nter='tate %#reement .fter the war Germany+s need for foreign workers will get less, but we will still ha(e the res)onsibility for ensuring that foreigners can find work and food here. !ther Euro)ean nations will want to see that their )eo)le find work elsewhere in Euro)e, therefore a large6scale Euro)ean worker e7change will ensure that no resources are lost from this continent. 8uch an e7change will only ha(e a beneficial effect if it is introduced in an orderly way. ?eo)le are more im)ortant than economic goods and therefore it is essential that the e7change of workers be regulated by agreements between the res)onsible go(ernment offices. The+guest+ nation has to ensure that the a))licants are )laced in a))ro)riate )ositions and do not stay beyond the agreed time. The *host+ nation must ensure that the workers are em)loyed and rewarded, as arranged, and that accommodation, care, holidays and tra(el home are )ro(ided. Guest nations can turn to the offices of the host nation if difficulties arise. Germany has made a number of agreements with friendly nations regarding the rece)tion of workers e.g. 3ulgaria, Italy, roatia. ,omania, 8lo(akia, 8)ain and /ungary. <ue to )ossible differences between the )artici)ating nations, there must be some common )rinci)les in the agreements in the interest of all nations of the Euro)ean economy. It is im)ortant for each a))licant to recei(e clear information about the conditions of work in another country so he does not feel he has been gi(en false )romises, but it is not easy to a(oid some misunderstandings arising. "anguage differences, (ocational training, working methods and Kob descri)tion, wrong workers+ )a)ers can all contribute to the unclear )icture of an a))rentice+s skills. >ery few nations ha(e Kourneymen letters, references and workers+ books etc. In Germany there is the )ractice of worker agreements, which are used in agriculture and commerce and form a large )art of the general agreements formed with other nations. The working conditions are clearly outlined in both countries+ languages, citing the agreed wage, additional )ayments, se)aration )ayments, hours of work, the ty)e and cost of accommodation and care, holiday, tra(el home etc.

What normally ha))ens is that the guest nation )ays the costs u) to the border and the em)loyer the costs to destination from there and (ice6(ersa. /ere an em)loyer has to a))ly to an em)loyment office to take on foreign workers and the wages offered are checked against e7isting agreements. The su))ly of accommodation and care are also checked. If all is correct, the forms are sent to the "abour -inistry. The worker recei(es a co)y of the agreement or the grou) leader for a grou) a))lication. E(ery worker gets a form in his own language, which contains the most im)ortant conditions of the agreement and other details about his stay in Germany. The worker must be under no )ressure from either the guest or host nation and must be able to make a (oluntary a))lication so that he can )erform well in a foreign country. !therwise he would be a))rehensi(e in the new surroundings and try to return home Juickly. No one would gain if he was disinclined to work or broke an agreement. Princi+les of Worker E*chan#es . foreign worker ob(iously enKoys the usual )rotection of life and health. /e must recei(e care if he has an accident or becomes ill and it is essential that he ha(e the same rights under social insurance as those in his homeland. Germany has signed s)ecial agreements for social insurance with a number of Euro)ean nations. In one )ro(ision concerning )ension insurance, workers will recei(e a )ension in their mother country co(ering the time when work was )erformed in Germany. There is another )ro(ision for accident insurance where the foreign worker who has an accident in Germany recei(es the full benefits from Germany e(en after his return home. The same )rinci)le a))lies to agreements with other nations concerning health insurance so the family left behind recei(es )ayments from the German state. It is im)ortant to set out in ad(ance the contract )eriod of em)loyment and it should not be too short, as workers need time to settle down. The o))osite also a))lies otherwise relations to home become stretched and the workers get too settled there. Germany originally set the contract )eriod at si7 months but it was too short, as many foreign workers did not want to commit themsel(es in their first stay. When they realised that the )ro(isions were good here and work a))ealed to them, the contract )eriod could be e7tended. .n im)ortant )art of the agreements concerns the control of wage transfers, because the worker and his family de)end (ery much on regular and )unctual transfer amounts, as do the host and guest nation. The transfer amount (aries according to how much has been sa(ed and the relati(e currency (alues. 8ome

countries set no limits, others set certain ma7imum amounts but for the worker it is im)ortant that it is carried out as easily as )ossible. Where the worker is not familiar with the laws, it is best if the em)loyer takes charge and lets the wage de)artment arrange the transfer. The guest nation should )ro(ide the family at home with ad(ances until the first transfer is recei(ed or the host em)loyer should gi(e an ad(ance wage, which can be transferred immediately. oncerning accommodation and care, Germany has arranged community Juarters in which the members of indi(idual nations are housed. They are hygienic and clean and comfortable so it feels like home and the workers can adKust to the mo(e from home. It is im)ortant that the same nationality li(es together enabling them to be looked after in surroundings that are familiar. 8ome countries also send additional food and lu7ury items, which u) to a limit, can be im)orted without duty e.g. s)aghetti and hianti from Italy or ham from /ungary. It will not always be )ossible to )ro(ide accommodation4 for e7am)le, it is not worthwhile for a small com)any to construct communal Juarters or if work is being gi(en to an indi(idual. When accommodation is )ro(ided it should be reasonably )riced and suitable and not left to the workers to arrange. If we send any workers out to work in another country, we firstly reJuire )roof that accommodation and care are )ro(ided. are for the workers, though, should actually start from the )oint of entry into the country where they are then grou)ed according to their destination and should only come to an end on de)arture. If a worker should die in the host country, then family members should be informed Juickly and the burial arranged. If the body is to be trans)orted home, then the costs should be borne by the em)loyer andUor the state. are should also be of a s)iritual and cultural nature e.g. by arranging shows, films and lectures in their mother tongue4 factory e7cursions for rela7ation should be offered and the )ro(ision of news)a)ers etc. either )rinted locally or at home. In Germany, all foreign workers in commercial and industrial sectors are looked after by the German Workers+ 9ront, those in the agricultural sector by the ,eich+s 9ood ommittee. The former with its slogan 2?ower through /a))iness5 has, in conKunction with other official bodies, effecti(ely managed the )rocess of em)loying large numbers of foreign workers des)ite many )roblems that are bound to arise. 8ometimes when (ery large numbers of workers are in(ol(ed, the guest nation can send carers to the host one to look after their com)atriots e.g. Italy, /ungary, 8lo(akia and 8)ain ha(e used this ser(ice in close co6o)eration with our official bodies. %da+tation of the ?r#anisation for 5abour !e+loyment Worker e7changes can be made easier if each country+s organisation for "abour <e)loyment is run along similar lines. 8tate bodies ha(e organised labour de)loyment in Germany for years and it was greatly missed during the world war.

Immediately after it, state administration bodies were formed and now there are &# regional labour offices under the ,eich+s "abour -inistry and beneath that there are B:' labour offices with $#,%%% other offices co(ering all occu)ied areas. The authorities e(en marched with the troo)s in ,ussia, including $B% German officials. Thanks to the highly organised administration system, we could con(ert into a war economy without hitches and meet the huge demands made. There is uni(ersal belief that labour de)loyment has to be organised centrally in Germany. This ha))ens in other countries, such as /olland where there are #$ local labour offices and $$B related offices. 8ince !ctober $AB% state offices ha(e taken o(er from local labour offices, but there is till no ministerial control in this area. 8imilar organisations are to be found in 3elgium, 8)ain, 8weden and 8lo(akia. 3ulgaria and 9inland are starting to create their own, as in England during this war. It is also interesting to note that the material em)loyment right has shown a tendency recently in Euro)e to unify, )articularly regarding statute labour and rules that limit the free e7change of Kobs. In $A#' we started and then a year later fully introduced statute labour, which a))lied to all inhabitants of the ,eich making it mandatory to offer their ser(ices. . similar )iece of legislation came into force in Italy in -ay $AB% relating to land organisation, which meant that all men between $B and I% and women between $B and :% could be called u) to maintain 2the defence and force5 of the nation. /olland introduced statute labour in 9ebruary $AB$, and 8weden did in $AB%, em)owering the go(ernment to call u) )eo)le between $: and :A. 8witzerland in $AB% introduced the duty to work in the countryside and in @uly $AB$ to work in construction. 3ulgaria, ,omania and finally 9rance in $AB$ introduced rules that forced workers to work in the countryside in order to ensure agricultural out)ut. 9inland and 8lo(akia ha(e statute labour laws and England, who saw fit to criticise our legislation at the start of the war, introduced com)rehensi(e statute labour in <ecember $AB$ for all those between $: and H$. -ost of these laws are borne out of the necessities of war and are not ideal for )eacetime. !ne ho)es and wishes that the dri(e towards a centrally controlled em)loyment organisation will continue in Euro)e and that )rogress continues to be made in unifying the material em)loyment right. Worker e7change would be made a lot easier as a result. Em+loyer %ction and ?rder '3itchin# Two other forms of inter6state worker e7change ha(e to be mentioned= one is the action of em)loyers and com)anies. This means that a foreign em)loyer gets acti(ely in(ol(ed together with its entire workforce by taking res)onsibility for a )articular order from a local customer and concludes a contract concerning work and )erformance. The order is then fulfilled using workers and machines. 9oreign

workers are then more inclined to take u) work indi(idually in other countries and Koin forces with their com)atriots. Em)loyer action can bring about action by foreign workers. !f course, the foreign worker in these cases is subKect to the local work and social laws and should earn the same as the local workers. Em)loyer and com)any action is common)lace in Germany and foreign entre)reneurs in construction and assembly work are acti(e here. 9inally we should )oint out the )ossibility of unburdening the local economy by switching orders to other countries which also ensures that unused ca)acities are utilised )roducti(ely. The guiding )rinci)le, though, is that )roduction mo(es to where(er the reJuired workforce is a(ailable, as well as the reJuisite economic and currency related factors. In many Euro)ean nations, )articularly, in the occu)ied areas, hundreds of thousands of workers are acti(e on behalf of the German economy. To conclude, I )redict many years of )eaceful reconstruction work and economic co6o)eration after the (ictorious end to this war. Inter6state labour de)loyment will bring the )eo)le of Euro)e closer together. The acti(e human, the Euro)ean worker will ha(e a decisi(e role to )lay in sol(ing the difficulties facing the Euro)ean economic community. In <ecember $AB$ .dolf /itler used these words addressing munitions workers, 2The German workforce is our gold and our ca)ital with which I will conJuer the worldN5 We can modify these words to relate to the Euro)ean economic community by saying= Euro)e+s workers are Euro)e+s ca)ital and with it all continents will be defeated.

0amphlet 23<

Auestions about Euro+ean )rans+ort = by <usta& Boeni#s

'ecretary of 'tate, Berlin It is difficult to know where to begin, as this is such a broad to)ic. -aybe with the issue o(er the routing of the !rient e7)ress 6 either (ia northern Italy or 8witzerland or 8trasbourg61arlsruhe6-uncih68alzburg. This has been hotly debated in )re(ious timetable )lanning conferences. .lternati(ely I could in(estigate new trade routes between Germany and the Near East looking at the sea route from the /anseatic cities or along the <anube or (ia rail through the south6eastern Euro)ean nations or (ia Trieste and the -editerranean. Then there are the )orts of ,otterdam, .msterdam and .ntwer). Today routes o(er the .tlantic and -editerranean are blocked for us, we ha(e only the <anube and rail route o)en to us. If our shi)s can use the North 8ea )orts and Trieste again, then goods will find the most economical routes for themsel(es and we ha(e time now to decide if we want to take economically and )olitically moti(ated measures to influence the flow of commercial traffic. 3y looking at recent de(elo)ments we can clearly see the )roblems facing Euro)ean trans)ort )olicy. .t the moment the so6called *Euro)ean Economic ommunity+ is not yet fact4 there is no )act, no organisation, no council and no General 8ecretary. /owe(er, it is not Kust a )art of our imagination or some dream by a )olitician 6 it is (ery real. The idea li(es in the consciousness of Euro)e+s )eo)le who ha(e been brought together as a result of the English sea blockade and the unnatural alliance of England and 8o(iet ,ussia. ?resently we ha(e a Euro)ean military community, made u) of troo)s and (olunteers from Italy, 9inland, /ungary, ,omania, 8)ain, 8lo(akia, roatia, /olland, Norway and Germany, which is fighting against 3olshe(ism. Its roots are in the economic co6o)eration of the Euro)ean nations and it will de(elo) after the war into a )ermanent Euro)ean economic community. !ur community 6 unlike the 3ritish ommonwealth 6 )reser(es each nation+s inde)endence and so(ereignty and it has no im)erialist aims and no )lans to e7)loit any of its members. Germany )ursues its task in this community on a comrade6like basis. !ur trade )olicy consciously does not set out to seek goods at the chea)est )rice, instead it seeks to raise the li(ing standard of all the nations so that they can buy our )roducts in future. The Euro)ean economic community is going to create a flow of goods on the continent, which will challenge the trans)ort facilities and means a(ailable in ways we do not yet know. In any case, the trans)ort administration will ha(e to be ready to take control of an un)aralleled le(el of trans)ort.

Trans)ort does not Kust fulfil the task of mo(ing goods and )eo)le, it also creates new needs and under)ins the Euro)ean community. It is not yet decided whether trans)ort brought about the di(ision of labour or the other way round, but it seems that they are both cause and effect. Trans)ort has a centri)etal effect and reaffirms the community, which it ser(es. In future it will become the column of the community rather than an e7ternal entity. The saying in Gene(a was= 2In the beginning there was organisation5. 9aust had it, 2In the beginning there was the deedN5 The community is based on the structural life of Euro)ean )eo)le and will be de(elo)ed as we fulfil the laws of the community. We will meet the task that has been set for Germany concerning trans)ort, which is= $. !ur own trans)ort system has to be a shining e7am)le and act to assist foreign economies by hel)ing to create trans)ort )rogrammes which ada)t to the growing demands. Germany has to ensure the technical trans)ort de(elo)ment beyond its own borders, which is em)hasised as it e7tends beyond matters, such as duties, im)ort and e7)ort, and currency and labour related Juestions. Germany must take charge so that )artici)ating countries do not e7)ort (ital trans)ort construction materials.

&.

#.

These )ro)ositions will now be related to the fi(e means of trans)ort= rail, ri(erways, road, and steam6dri(en trans)ort, sea and air Kourneys.

,)echnical @nity- in the Rail3ay 'ystem

The e7tension of Germany+s railroad network came to a halt Kust before the war. Without the great )eacetime effort, the huge achie(ement of the German ,eich railway would not ha(e been )ossible. .fter the war our rolling stock will ha(e to be o(erhauled and increased, and facilities e7tended in commercially (ital areas. ertain lines will need four tracks but within one the year, the ,eich will ha(e sorted it out. !ur recently e7)erienced delays were normally related to conditions outside our rail network, such as .ustria, zechoslo(akia and ?oland, which could not take in our trains or return the em)ty carriages. .ll this affected the ser(ices on our internal railroads, but such )roblems no longer occur. In no time, the standard of our branch lines eJualled that of the old ,eich and e7tended throughout the enlarged ,eich area.

8oon it may become necessary for neighbouring countries to bring their rail systems u) to our le(el and we will offer all our hard earned e7)erience of the last century so they can de(elo) their trans)ort systems. -any countries, howe(er, do not ha(e any national )lanning in such areas, instead they rely on the goodwill of foreign )atrons in order to e7tend the lines often influenced by ca)italistic or )olitical considerations. We will allow these countries time to think along national economic lines, so they ada)t to the needs of the Euro)ean economic community. <uring the war we started to build the second link with <enmark from "Pbeck (ia 9ehmarn, "aaland and 9alster to o)enhagen, which had the slogan= 2.s The rows 9lies5, but which had not )rogressed beyond )lanning. Indeed it can be called a )iece of trans)ort )olicy for the enlarged area. !n the other hand, these )lans neglected the east and south6east where rail conditions were )oor. We talk of connection im)ro(ements between >enice and Trieste to 8ilesia and ,omania and a better connection between the 3altic and the <anube basin and of cutting through the .l)s. The one concern I ha(e is that we should ne(er admit something as im)ossible on the grounds of cost of construction. The Gotthardt railway, for instance, was Kointly financed by 8witzerland, Germany and Italy 6 such cases we do well to remember when certain community nations seem too financially weak to meet the task set. National borders in Euro)e+s rail system ceased to be a )roblem long ago and we can tra(el with our luggage on through tickets to any Euro)ean destination. Germany has led the )roduction of this international rail trans)ort and the rules ha(e been de(elo)ed by the administrations of the Euro)ean countries mo(ing towards an international form of self6administration. !ne of the most im)ortant ones is 2The Union of the German ,ail .dministration5 and which has had its )resent name since $A#&. In $'H% the union recei(ed its first charter to trans)ort )eo)le, luggage, cor)ses, cars, and li(e animals and thus created the basis for today+s international law for rail freight and for trans)orting )eo)le. In $''B it issued for the (ery first time the licence books for trans)orting )eo)le and carried out ground6breaking work in the )romotion of international rail trans)ort by organising the construction and running of the main and small lines. 2Technical Unity5 for the rail system contains standards about track gauge, the method of construction and the le(el of maintenance of the rolling stock, loading and duty bonding, as well as the brakes of through goods trains. E(en the arrangements re)resent a )iece of international self6administration and were created by the German railways. In $A&& at the onference for Economy and 9inance in Genoa, the world war allies formed the 2Union Internationale de hemin de 9er5 with its base in ?aris, thus taking away the leadershi) of the de(elo)ment away from Germany. .t the second conference in Genoa in $A&# there were few signs of success or acti(ity. With the change in the )olitical conditions after the conclusion of )eace, I belie(e that

Germany, will once again assume res)onsibility for sha)ing the international rail system and will become the re)resentati(e of the 2Union of entral Euro)ean ,ail .dministration5 in the self6administration of the railways of the Euro)ean economic community.

)he Ma#na $arta of Euro+es (nternal Ri&erboat )raffic

!ur waterways are the most modern in Euro)e and are designed for ma7imum efficiency, yet we ha(e been left behind in the e7tension of the network. That is because only until &% years ago did the res)onsibility of )lanning )ass from the indi(idual states to the ,eich itself. .nother )roblem was in ?russia where any e7tension of the waterways was de)endent on shi) Kourney ta7ation and any construction u)on the costs of o)eration, maintenance and ca)ital ser(icing being met by business from sea cargo. This condition created by the waterway administration effecti(ely ended all construction. E7tending ri(ers and the laying of canals ought to create chea) freight o))ortunities for the economy, but they are taken away if the waterways are burdened with these ta7ation costs. This is really a case of three ste)s forward and two ste)s back. .fter the world war it was the weak6minded who saw no future for Germany and resisted the e7tension of the waterways. They coined )hrases such as 2inflation of trans)ort means5 and 2misuse of ca)ital5 to )ut an end to such schemes. Nature ga(e us si7 ri(ers in northern Germany running south to north= the ,hein, Ems, Weser, Elbe, !der and Weichsel4 and in the south, the <anube running west to east. The (ital duty regarding our o(erseas trade has been to e7tend the ri(ers leading to the German sea )orts and to continue clearing the ,hein, controlling the Elbe, canalising the Weser, im)ro(ing the Elbe and e7tending the <ortmund6Ems anal. !(er three6fifths of our e7)orted goods are trans)orted by waterway Fon a weight basisG. 9rom a continental )ers)ecti(e, all our ri(ers tend away from the continent. "ooking today at the German lowlands and 3alkans we Kust start to realise what intentions England had with the internationalisation of German ri(ers in the Treaty of >ersailles. Under this, the ,hein, Elbe, !der and <anube were internationalised and )laced under the ri(er commissions4 this would allow more than one nation access on these ri(ers and their tributaries to the sea. The aim was to free the ri(ers from the control of the surrounding nation and )lace them under the control of a su)ra6state body i.e. the international ri(ers commissions. This would allow countries, such as zechoslo(akia, 8witzerland and nations in the south6east, guaranteed access to the ri(ers and to the sea without being im)eded in any way. This was a ty)ical e7am)le of England+s )hilanthro)ic ideas to ensure that each nation had access to the sea and in reality it was to ensure that these nations did not concentrate their e7)orts on their continental neighbours. England was intent on

binding these nations to the sea where its fleet and traders ruled, thus kee)ing them under its control. 8witzerland acce)ted England+s )ro)osal for the internationalistion of the ,hein and contributed three6fifths of the costs for the control of the u))er ,hein from 8trasbourg to 3asle. This is the first case I ha(e seen of a nation )aying costs for the ri(ers outside its borders and is likely to do with access to the North 8ea. It was, howe(er, restrained when it came to the na(igation of the ,hein from 3asle to onstance, e(en though it shares the same amount of ri(er with Germany. The answer lies in )rotecting the )ri(ileges of its terminal )ort in 3asle and its railway from any com)etition. zechoslo(akia in the central Euro)ean highlands could not reach the Elbe, !der and <anube and made great use of these routes to the North 8ea, 3altic and 3lack 8ea. Until .ustria, /ungary and Dugosla(ia directed its trade )olicy to Germany, they used the <anube. The Treaty of Neuilly remo(ed the use of 8aloniki as a )ort. In !ctober $A#: our leader made a declaration which was con(eyed to the international ri(er commission which freed us from the terms of the Treaty of >ersailles. "et us turn now to the waterway construction )rogramme of our go(ernment from a 2continental )ers)ecti(e5. In $A#' the main central canal was com)leted and on $$ -ay a law under the four6year )lan ordered that 23y $ABH the ,eich+s waterway Koining the ,hein and the <anube (ia the -ain should be com)lete5. In the autumn of $A#A the !der6<anube anal was started, as was the connection of the ,hein (ia the Neckar to the <anube, and the canalisation of the Neckar from -annheim to /eilbronn was com)leted. ?lans are under way for a canal between the Werra and the -ain, as well as one for a /anseatic canal linking the ,uhr area to /amburg, 3remen and "Pbeck, and one from ,iesa at the Elbe (ia the brown coal area of central Germany to -altsch at the !der, called the Elbe6!der anal. The idea of the uniform tendency is to link all the ri(ers, which tend away from the continent and to connect the German ri(ers to the waterway network. The result should be to )romote Germany+s internal goods traffic. The former ?oland offered a *)lastic+ e7am)le of a continental nation with an anti6 continental attitude. It began to de(elo) Gdynia into one of the most modern )orts. Using 9rench ca)ital it built the so6called 2-agistrale5, a rail track Koined the former ?olish u))er 8ilesia to the free city of <anzig and Gdynia, taking its entire e7)ort traffic (ia these cities to the 3altic. ?oland+s long border with Germany had to be broken through so that Germany could be linked to East ?russia. .fter Gdynia+s )ort was finished, ?oland e7tended a large industrial area at 8andomis and I belie(e ?oland would ha(e embarked on another task 6 the control of the Weichsel ri(er. ?oland would ha(e obtained coal and iron from its mines in u))er 8ilesia (ia the Weichsel which is na(igable further north and (ia the ?rzesma, which could ha(e been linked chea)ly to the Weichsel. It would ha(e acJuired

other raw materials the same way and shi))ed goods manufactured at 8andomis (ia the Weichsel to Gdynia and <anzig. ?oland+s anti6continental attitude e7)lains why the internationalisation of Germany+s ri(ers did not affect the Weichsel. ?oland offered the assurance that it would not become )art of the continent, instead it saw its future in sea trade with England. The im)ortant duty of Euro)e in the south6east was to e7tend the <anube into a route na(igable for large shi)s. Until the middle of the last century it was barely )ossible to get from the <anube estuary to the 3lack 8ea. The ,ussians owned the estuary and in order to )rotect its 3lack 8ea )orts, it allowed three arms of it to silt o(er. In the ?aris ?eace .ccord of $':H, which concluded the rimean War, the <anube estuary became subKect to the 2Euro)ean <anube ommission5, which has functioned to this day. In the Treaty of 3erlin in $'I' it was e7)ressly confirmed that it should function inde)endently of the so(ereignty of ,omania. The commission, to which ?russia also belonged till the Treaty of >ersailles, ke)t the middle <anube estuary com)letely o)en but ham)ered the shi) Kourney with de)osits. "ast year the commission ceased to e7ist. The ra)ids of the <anube abo(e and below "inz are being e7tended now by the German waterway administration to make it )assable for shi)s, but the most difficult )lace is at the 2Iron Gate5. In the $'A%+s /ungary was asked to construct some large defences and recei(ed loans to do so. It will de)end on the new )olitical ma) which country will carry out the )lans made to ease the )assage of shi)s through the 2Iron Gate5. It is Juite )ossible that for a second time the community will ha(e to stri(e to o(ercome this natural obstacle to the )assage of shi). The ,hein is the largest and most e7tensi(e route in Euro)e and, des)ite this and its history, it is less mentioned than the <anube in books and s)eeches. We are doing all we can now to Koin the German waterway system to this great Euro)ean traffic route. 3esides the ri(er connections mentioned earlier, the .achen area and the 8aarland ha(e demanded the construction of canals for more than a century to link their coal mines and industrial areas to the ,hein. 9rance, on the other hand, has made no effort to link u) with the ,hein. In the >ersailles Treaty 9rance relinJuished the )ort of 8trasbourg which had been well e7tended before the war and made use of the control of the ,hein from -annheim to 8trasbourg, but it did nothing to de(elo) the ri(er itself. 3etween 8trasbourg and 3asle, 9rance refused to contribute financially and limited itself to a technicalUadministrati(e rSle. 9rance did de(elo) the dam at 1embs but only to obtain electrical work at the stee) slo)e at Istein. !(er a century ago 9rance built the ,hein6-arne and ,hein6,hSne canals but it ne(er considered e7tending them to take large shi)s, so only #%% ton *)Vniches+ can )ly them. It seems ob(ious to ha(e wanted to link the 9rench mining area of "othringen and the ,hSne (ia the 3urgundy Gate to the ,hein with modern canals. 9rance will ha(e to gi(e u) its conser(ati(e canal )olicy if it wants to be in(ol(ed the in the future of waterway de(elo)ment in Euro)e, which is determined by the sizes of the German ri(ers and canals. The task of the south6

west German waterway )lanning body is to achie(e a link with the 9rench ri(er network and to Koin the ,hein to the -editerranean (ia the 3urgundy Gate and the ,hSne. The -agna arta for Euro)e+s internal ri(erboat traffic was contained in our leader+s declaration in No(ember $A#:. 29or those nations li(ing at )eace with Germany, their shi)s can use the waterways freely on our territory. These foreign shi)s and Germany+s will be treated eJually e(en concerning the issue of shi)s+ de)osits, )ro(ided of course other nations act mutually.5 This enca)sulates )erfectly the theory of the Euro)ean economic community, lea(ing, as it does, the so(ereignty of other nations intact. 3efore the war the Warthe and Netze ri(ers were blocked by ?oland from us, the 8a(e ri(er by Dugosla(ia, the 3ega by ,omania, and 9rance limited access of its canals to German shi)s. .ccording to our leader+s declaration, all German ri(ers, artificial or natural, should be o)en to countries, which act mutually, which means no more than the e7)ression of a true economic community. No other nation has such well6 de(elo)ed ri(ers as Germany and no other nation contributes to the community as we do. !ur leader+s words are )erfectly clear and gi(e the best guarantee for the freedom of shi)s, which is more than could be offered by any legal treaties or shi) acts. .ll )re)arations ha(e been made by Germany for the measurement of the waterways, the standardisation of ri(erboats and sailing rules, which will enable uniform regulation in the Euro)ean economic community.

Motor3ays $ontribution to the Euro+ean )rans+ort $ommunity

We should not let the )resent situation of )etrol and rubber shortages affect our (iew when we consider trans)ort, as they are only tem)orary manifestations. The future belongs to motorisation. Germany did not e7)loit the )etrol engine until National 8ocialism came along. !(er $%% years ago circles in the ,hein area had constructed a steam6dri(en engine, which was ca)able of mo(ing a carriage. They considered reser(ing one side of the road for this steam6dri(en (ehicle, which could ha(e had its own track. Then <aimler and 3enz de(elo)ed a light and com)act (ehicle ideal for the roads, but tragically cars were seen as dangerous instruments created by the de(il, from which humans should be )rotected, unlike in the U8., where the car was seen as )rogress and thus )romoted in e(ery way. We lagged behind until $A## when our leader taught us that the car was there to ser(e )eo)le and ga(e them freedom from timetables. In Kust a few years the go(ernment had managed to catch u) with other countries. Germany became a leading nation of Euro)e in road traffic and our leader ordered the construction of the ,eich+s motorway and )eo)les car. <r. ?orsche built the car

combining )erformance with Juality at (ery low cost. The ,eich+s motorway and )eo)les+ car For the *1d9+ car, as designated by our leaderG were the (isible symbols of the German desire to get motorised and in )eacetime they will *set the scene+ for road traffic. E(en before the war the ,eich+s motorways had a significant effect on all Euro)ean nations and most )owers asked whether they should build their own, but they deferred due to )olitical reasons or )restige concerns. !nly in No(ember $A#' did zechoslo(akia sign an agreement for the construction of a ,eich+s motorway between 3reslau, 3rno and >ienna, while it still remained outside the ?rotectorate. !ur motorway network was designed so that neighbouring nations could Koin on to it. <uring the war new large )roKects are not )ossible but after it our task will be to e7tend our motorways into a Euro)ean network. The first route will definitely not be from "ondon to Istanbul, but from Germany to Italy4 and the communities of the .7is )owers, which these two countries ha(e )reser(ed in this war, will be re6 affirmed through this work of )eace.

$ommunity Work in 'hi++in#

Until the war the law of market forces )re(ailed in shi))ing and it was the )ride of German shi) com)anies and their own efforts that enabled them to com)ete with other sea6faring nations. .fter the war the same law will come into force, as the sea is not subKect to the force of nature, not state control. .nother Juestion, though, is whether Euro)ean nations enter the fight indi(idually or Koin together and com)ete against the largest o(erseas nations of the future. It would be interesting to mention the )ossibilities, which could result from such an alliance of north6west Euro)e and the -editerranean into two large fighting communities. The time is not yet right though, so I will not go into it. I will say that )olitical co6o)eration between Euro)ean nations will not lea(e shi))ing )olicy untouched in the future. Traffic de(elo)ments in the north and east, on the other hand, re(eal )erha)s the way of the future. The )roblem is sim)le= we need iron from 8weden, which has to be mainly loaded at "ulea or Nar(ik. 8candina(ian nations need coal and de)end totally on the continent for both its other im)orts and e7)orts. <emand for shi))ing s)ace has grown e7)onentially, but s)ace has had to be reduced because German commercial shi))ing had to forego a large )art of its tonnage for land defence. In )eacetime, rates would ha(e gone u) and loads not able to afford these higher rates would be )ushed back and tram) shi)s would come in. "oads can no longer be )ushed back as Germany needs iron, 8candina(ia its coal, and foreign shi))ing s)ace, es)ecially tram) shi)s are not a(ailable because e(ery shi) that e7isted in the world has been claimed by England. 9ree market forces ha(e failed and a new organisation form has to be found.

The ,eich+s trans)ort grou) for sea shi))ing realised it could ha(e o(ercome these difficulties by coming to agreements with 8candina(ian shi))ing grou)s. The trans)ort grou) decides which trans)orts are to be carried out and sets an agreement with the loaders and 8candina(ian shi))ing grou)s concerning freight according to the list of )riority guidelines from the go(ernment. While freight le(els on the international sea shi))ing market ha(e increased eight or $%6fold, rates on North 8ea and 3altic routes ha(e gone u) by :%R at the most. German and 8candina(ian shi))ing com)anies o)erate under community co6o)eration, which aims to meet the needs of highest )riority of the member nations and e7cludes any e7)loitation of the war6related business cycle. 3efore us, we ha(e a real Euro)ean economic community based on international self6administration and I am con(inced that such co6o)eration will endure through the war. Nations are so used to freight stability and secure su))ly of goods that e(en after the war they will not want to gi(e u) those ad(antages that ha(e accrued from such Koint work.

Joint Work in %ir )raffic

Germany is the undis)uted leader in air traffic since it freed itself from the rules in the agreement with the world war allies in $A&:, which were im)osed by the .mbassador onference of 3oulogne in $A&$. German "ufthansa, the number one com)any in the International .ir Traffic .ssociation, led the traffic between the cities of Euro)e and ran regular ser(ices u) to the war. ,ight from the ince)tion of the airlines it arranged that each national air traffic com)any had the same number of aircraft in ser(ice. Gross earnings were hal(ed and each com)any handled its own e7)enditure. Thus an international form of trans)ort was created which ob(iated any national sensiti(ities and was truly community based. German "ufthansa soon co(ered all of Euro)e, it formed 2Eurasia5, created the ondor syndicate in 8outh .merica and carried out the first systematic flights o(er the 8outh and North .tlantic and to the 9ar East. .ir trans)ort+s future lies (ery much with the o(erseas nations and the 9ar East, but it still remains a )owerful instrument for holding Euro)e together and concentrating our co6o)eration. In this brief o(er(iew I ha(e tried to demonstrate how we in Germany can de(elo) structurally a Euro)ean traffic community without falling into im)erialist ways. The building u) of the Euro)ean traffic community can and will )roceed ste) by ste) together with the economic community. It is wrong to belie(e that idle ha))iness will reign in the Euro)ean traffic community as im)ortant battles ha(e yet to be fought. There will be arguments about which countries and lines should run the big international e7)ress trains, about the de(elo)ment of traffic between Germany and the 9ar East and there will be hea(y com)etition between the sea )orts of /amburg and 3remen, ,otterdam and .ntwer), Genoa and Trieste. These battles are not all bad, because life is a battle and, as we say, 2the churchyard starts and finishes in the same )lace5. ?rogress is achie(ed through com)etition between nations and within nations. /owe(er it is im)ortant that all trans)ort com)anies

remain aware of their )art in Euro)e and we remember that the fate of the continent stands abo(e the welfare of the indi(idual national economy. 2E(erything that damages or su))resses a nation of the continent, does the same to the whole continent. E(erything that benefits a nation of the continent, without disad(antage to another, is a benefit to the whole continent5. With these words, the Italian arlo 8carfoglio enca)sulated the idea of the new sense of the continent in his essay 2 Euro)e without England5. Euro)e+s traffic community will also gain (ictory under this banner.

0amphlet 23=

Auestions about Euro+es $urrency by !r" Bernhard Bennin# !irector at the Reichs $redit $om+any %"<", Berlin $urrencys )3o 'ides
. whole host of )roblems are in(ol(ed with this to)ic. 9irstly, each currency has an internal and an e7ternal as)ect. Internally, a currency has the obKecti(e of establishing stability in )urchasing )ower, reaching a balance between earnings and an adeJuate su))ly of goods i.e. a balance between wages, )rices and a(ailable goods. Then there is the im)ortance of de(elo)ing sufficient credit and money su))ly. E7ternally, it is related to the e7change relationshi)s of the currency against all the other currencies of other economies. The e7change rate being the focal )oint, which is in itself the e7)ression of an e7traordinarily com)licated set of inter6 nation relationshi)s in trade and goods settlement, which results in a country+s o(erall balance of )ayments. 9irst of all, in order to clarify the difference between the currency )olicy of today and of the )ast, I want to refer to the fundamental changes in the (alue )laced on the internal and e7ternal currency that ha(e taken )lace o(er the last decade. In the time of the Gold 8tandard for the construction of a currency, the e7ternal relationshi) Fi.e. the e7change rateG was the most im)ortant. The conseJuences are well known= trade cycles were internationally linked and economies de)ended on o(erseas economic cycles. This system had catastro)hic effects on national economies during the global crisis of $A#%6#& and it should ne(er be allowed to returnN E(erywhere now, including England, the im)ortance of national economic )olicies and thus the internal currency )olicy has finally been recognised. The resultant themes are stability in )urchasing )ower and full em)loyment, below which the e7ternal currency )olicy is clearly ranked. The situation can no longer arise where a )olicy of credit restriction is a))lied, in order to formally stabilise e7ternal currencies, entailing fi7ing e7change rates and restricting money su))ly below a certain minimum. .s in $A#%6#&, this would be like a 2suicide attem)t5, which has been successfully resisted since $A## by the natural energies of our society. This does not mean that limits do not a))ly in the internal credit )olicy under normal conditions, but this belongs to the remit of a structural internal economic and credit )olicy. The two6fold as)ect of currency is no longer enough for the

analysis of the )resent currency situation where the e7ternal relationshi) is in(ol(ed. Today this in no way re)resents a uniform relationshi), instead a multi6 le(el structure. The relationshi)s between the Euro)ean currencies, for e7am)le, ha(e three distinct sectors= inde)endent national economies, the Euro)ean sector itself, and finally the intercontinental relationshi)s between the geogra)hic areas. Thus there are three similar sectors on three le(els for currencies= $. &. #. The relationshi)s between the currency )artners. The leader currency in the area in relation to the member currency )artners. The leader currency of the area in relation to its counter)arts in other geogra)hic areas i.e. the intercontinental currency relationshi)s.

)he (nternal Economic 'ituation of Euro+es $urrencies

/ow has this changed recently and what is the )resent situationM 8ince the inflation brake in !ctober $A#: Germany+s currency )olicy has focused on achie(ing )urchasing stability and was successful with the hel) of a system of )rice and wage su)er(ision. ?roof of this success is )ro(ided by the following )rice indices collated by the ,eich+s 8tatistical !ffice basing on wholesale )rices, which show an inflationary scenario since the start of the war= 8weden W:$.#R, <enmark W'A.&R, 8witzerland W'H.$R, /ungary WHA.&R, 3ulgaria W::.#R and ,omania W$BH.&R. 8o we can see that the )urchasing stability in internal economies Kust has not been achie(ed and wages ha(e had to rise as a result. /owe(er, since autumn $AB$, all these countries ha(e increased efforts to )ut a brake on this )rice )ressure. E(ery Euro)ean country now em)loys a )rice control authority and has anti6inflation laws. In fact, )rices ha(e sto))ed rising so fast and ho)efully Germany+s e7am)le will act as a guide in future. 3y achie(ing )urchasing stability in the )artner countries, it should make it easier to form the internal Euro)ean currency relationshi)s.

Mana#in# Forei#n E*chan#e and Bilateral 'ettlements

Now to the e7ternal relationshi)s between the Euro)ean currencies. .s we know, Euro)e+s de(elo)ment into an enlarged economic area began before the war and e7)eriences )ro(e that currencies follow the line of the most intensi(e flow of goods and the strongest set of balance of )ayments. The )osition of the main leader currency tends towards the strongest e7change )artner. The e7)ort trade of the south6eastern countries was centred on the ,eich e(en in $A#'4 for e7am)le,

:#R of 3ulgaria+s e7)orts went to Germany, H%R of Dugosla(ia+s and /ungary+s, and #:R of ,omania+s 6 since the war these figures ha(e increased. The .nglo6 8a7on blockade of the whole Euro)ean continent has had a one hundred )ercent effect on Euro)ean trade in all other areas of Euro)e. ,eflecting their economic force in Euro)e, the alignment of currencies has sifted to the two .7is )owers, Germany and Italy, who are taking u) the task together of creating a new order for Euro)e+s currency. 3oth countries ha(e close trade relations with one another, with all of the neighbouring countries and with the other Euro)ean )artner countries. 3oth make their own inde)endent settlement treaties, but subseJuently always agree matters at go(ernment conferences. The following information might show that the German currency as the main leader currency but it could also be the case for Italy. 8ince $A#$ the system of managing foreign e7change has been de(elo)ed into a consistent new currency system, whose main )illars are foreign trade control and settlement balance control in the indi(idual economies and the forming of trade and )ayment agreements whose functioning de)ends on a readiness for a )ositi(e and trusting co6o)eration. The system of foreign e7change management has been hea(ily criticised both here and abroad, and those res)onsible for our economic )olicy ha(e re)eatedly stressed that the )lanned economy of foreign e7changes and bi6lateral settlement treaties cannot be regarded as a com)lete and final system for the order of Euro)e+s currency relationshi)s. ,ecently, therefore, efforts ha(e been ste))ed u) to remo(e e7isting shortages and to further de(elo) more rela7ed and settlement structures. . com)rehensi(e look at these efforts )ro(ides a good insight into the )resent set of tasks. In the last few years, three main obKecti(es can be seen in the currency de(elo)ment of Euro)e= $. &. #. The change from bi6lateral to multi6lateral settlement. The releasing of clearing balances. The creation and securing of balanced currency relations.

)he !e&elo+ment of Multi=5ateral 'ettlements

It has )ro(ed to be )articularly beneficial that Germany has de(elo)ed a )racticable system for currency )ayment o(er recent years. It had to be firstly built on a bilateral basis, as initially each Euro)ean )artner negotiated with Germany se)arately.

<uring its de(elo)ment it has been )ossible to )roceed from a bilateral to a multi6 lateral settlement. In numerous inter6nation negotiations the relationshi)s go(erning trade and settlement were recognised in $AB%6B$, in which it was e7)ressly stated that all transactions with the countries administered by Germany be routed (ia the German learing 3ank in 3erlin. The fundamental )oint of the 2Koint clearing5 was that all settlements between the named countries and Germany were routed (ia 3erlin, including their settlements with third )arty )artners, be it with Italy and their )artners or with the neutral Euro)ean countries. Thus a whole network of multi6lateral settlement treaties came about, the latest of which is the one between 9rance and Norway signed in No(ember $AB$. E(en beforehand, 9rance+s settlements with 3elgium and /olland went (ia 3erlin, so today for the 9rench balance of )ayments, the settlement relationshi)s re)resent a unit to Germany, 3elgium, /olland and Norway. In 9ebruary $AB& the Go(ernor of the 3ulgarian National 3ank, 1yrill Guneff, wrote an interesting statement in the 28outh6East Economist5, which shows the )ositi(e rece)tion of the )roKect in the multi6lateral clearing system= 2 The change to the 3ulgarian bank law was )rimarily Kustified by the introduction of multi6 lateral clearing, since in so doing, the reichsmark became a truly leading currency for the whole transaction system within the Euro)ean economic area.5 8ome time ago, it was announced regarding the e7tent of the multi6lateral turno(er at the German learing 3ank in 3erlin that about $H nations were regularly )artici)ating in the so6called Euro)e6 learing with certain Juotas of their transactions. 3etween 8e)tember $AB% and -arch $AB$ the total turno(er figure doubled. 9igures issued by the /ungarian National 3ank in $AB$ are interesting, which show that u) to nine6tenths of foreign transactions went (ia clearing. . figure of about one billion ?engE, whereas only $%Hm ?engE were recei(ed in freely con(ertible currencies, mainly accounted for by the 8wedish 1rona and 8wiss 9ranc. .s the ?resident of the 8wiss National 3ank, <r. Weber, re(ealed at the start of -arch $AB&, I%R of 8wiss foreign trade with its main )artners is )resently linked to clearing traffic.

)he Problem of the $learin# Balances

<es)ite the signs of )rogress, the method of multi6lateral settlement in Euro)e is still in the early stages of de(elo)ment. !ur currency )olicy treads a careful )ath and seeks a structural and (oluntary de(elo)ment. The main )roblem remains that of the clearing balances, as described below. Germany, the country carrying the hea(iest burden in the fight against the .nglo6 8a7on63olshe(ist threat, needs a constant flow of raw materials etc. for the war and

Euro)e+s entire economy uses its )roduction ca)acity for this and in order to su))ly the Euro)ean area. ontract switching and, in addition, the em)loyment of o(er two million foreign workers in Germany who want to transfer a )ro)ortion of their income back home and do so 6 the result is increasing reichsmark credit balances of almost all the Euro)ean )artner countries in 3erlin i.e. for Germany, there are )assi(e clearing balances. These )artners then grant the German war economy su))ly credits to the (alue of these balances, or rather work credits. The )artners then ha(e two )ossibilities to deal with the )roblem of clearing balances. Either the so6called waiting times for the local e7)orters get e7tended so money is held tem)orarily in the German learing 3ank in 3erlin, or their issuing banks ste) in and )ro(ide their e7)orting com)anies with local currency amounts immediately after the recei)t of the reichsmark )ayment in 3erlin. In the first case, the e7)orters ha(e to bear the res)onsibility and in turn seek local finance credits. In the second case it is the issuing bank with the res)onsibility. Italy, 8lo(akia and also 8weden, to an e7tent, adhere to the waiting time )rocess, whereas most other countries use the method of immediate settlement i.e. the issuing banks take o(er the clearing balances. 3ulgaria+s solution is interesting to note. In mid6$AB$ there was a change in the issuing bank law, which allowed reichsmark credits to be established in 3erlin for the 3ulgaria National 3ank against the co(er of gold and free foreign e7change. Thus 3ulgaria was able to benefit from the reichsmark+s )osition as leading currency in the Euro)ean )ayment system. The significance for the credit and currency )osition of Euro)ean countries of the )roblem of clearing balances should not be underestimated, as we can clearly see a considerable increase in the from the statements of the (arious Euro)ean issuing banks. 9or e7am)le, the <anish National 3ank showed a net credit reser(e of 'H% million 1rona Fa))ro7imately ,- BH% millionG besides other reichsmark credits at the end of $AB$. 8lo(akia had a clearing credit of two million 8lo(akian 1rona Fa))ro7imately ,- $I% millionG. ,omania+s National 3ank figure was similar to 3ulgaria+s. In all these countries, an increase in the clearing balances leads to a big e7)ansion of local credit (olumes. 8o far the accrued clearing balances ha(e been Juite reasonable. What adds mostly to the )olitical argument is that Germany bears the greatest burden of the fight against the 3olshe(ist threat, but it should be remembered that the clearing accounts only contain the amounts due for )ayment. 3efore and during the war, Germany su))lied its Euro)ean )artner countries with in(estment goods and )roduction eJui)ment on lengthy credit terms. .s a result, considerable acti(e balances are set against the German clearing )assi(e balances, which will ha(e to be settled e(entually.

.fter the war Germany+s huge industrial out)ut will ha(e to be modified, in order to )roduce industrial goods needed by the Euro)ean )artner countries. This e7)ort of goods will not only reduce the clearing )assi(e balances but also actually translate them into acti(e balances. In the long term Germany+s whole structure will ha(e to alter, in order to turn it into a su))lier of ca)ital for the de(elo)ing countries in the south6east. .fter the war our economic )olicy has to s)ecifically take account of its )osition of res)onsibility in continental Euro)e by carefully )lanning its in(estments in line with internal and e7ternal economic acti(ity.

%d2ustment of Euro+es E*chan#e Rates

The third area of the )resent Euro)ean currency Juestion is what we referred to earlier as the changes in e7change rates. 3efore the war, the (alue of the reichsmark fell in the indi(idual south6east Euro)ean countries in relation to the so6 called free currencies of the leading de(aluation countries, )rinci)ally the <ollar and ?ound 8terling. There were (arious causes= the relati(ely high German )rice le(el against the reduced )rice le(el in the de(aluation countries and then the large German im)ort sur)luses and the ensuing settlement balances in Germany whereby the )re(iously mentioned waiting times brought about discounting e(en before the war. 8ince the war started, Germany has concentrated on reducing and remo(ing these )roblems for the reichsmark. This was all the more im)ortant when the gradual transition to multi6lateral )ayment in Euro)e made the uniform (aluation of the reichsmark a )rereJuisite. 3y early $AB$ lengthy negotiations with all south6eastern countries had succeeded in creating the first ste) for a currency unification in a way that the (arious high discount le(els of the reichsmark could be limited to &%R against the theoretical )arity. .fter that, the other discounts were remo(ed, such as Germany+s currency relationshi) to roatia and 8erbia and then to the /ungarian ?engE, followed by 3ulgaria in !ctober $AB$. There still remains today a &&.&R discount between the settlement -ark and the ,omanian currency. E7ce)t for this remaining discount, the continent of Euro)e demonstrates a )icture in which relati(ely uniform inter6 national currency relations ha(e been formed 6 $% years after the )lanned economy for foreign currencies and bilateral )ayments were introduced in Euro)e. With this, one of the most im)ortant conditions for the further de(elo)ment of multi6lateral )ayment traffic in Euro)e has been created. /owe(er, some ca(eats need to be added. .t the moment there is not yet a corres)onding )osition of eJuilibrium in )rice structures and in the de(elo)ment of balance of )ayments. . real and not only formal eJuilibrium for currency and balance of )ayments de(elo)ment also de)ends u)on inter6national )rice eJuilibrium. .s e7)lained already, in the maKority of Euro)ean countries the )rice

conditions are subKect to (ery different )rice )ressures. 9or future de(elo)ment it is essential that the )rice brake measures mentioned are successful. The *correct+ le(els of e7change rate eJuilibrium will be determined once normal )eaceful conditions of su))ly and demand are established. The recent increase in the <anish 1rone by '.&R shows how fluid the )icture remains. While de)reciations were the rule for the south6east currencies against the reichsmark, the o))osite was the case for the <anish 1rone due to s)ecial reasons. <enmark achie(ed an im)ro(ement in its goods trade with Germany thanks to certain German )rice concessions. .ny attem)ts by <enmark+s internal economy to )ut a brake on its local inflation should be su))orted. !(erall the )icture is of a large (ariation in the e7change rates in Euro)e. Instead of a dogmatic stability )olicy, the ,eichsbank em)loys a system of (ariable rates between the reichsmark leader currency and the member currencies. Its e7change rate )olicy is an acti(e one that ada)ts itself to the changing conditions with the aim of achie(ing an o)timal trade in goods and ser(ices in Euro)e.

Future Formation of the Euro+ean $urrency 'ystem

There are other interesting Euro)ean currency )rocesses e.g. the functions of the ,eich redit 3ank, or the s)ecial rules concerning the ?rotectorate and /olland, or the Juestion of how 8weden and 8witzerland ha(e reacted to the illegal im)ort freeze measures by .merica. Now is not the time, as we ha(e to concentrate on two )oints= the future formation of Euro)e+s currency framework and the )ost6war duty of establishing a new order for the currency relationshi)s between Euro)e and the other large areas of the world. ,ight from the start it has to be em)hasised that no one considers a remo(al of the monetary and )olitical inde)endence of the indi(idual Euro)ean )artners in fa(our of some sort of Euro)ean unit currency. 3esides the im)ortant )olitical as)ects, the fact of a strong income structure would stand in o))osition to such a *currency union+ idea. This structure is clearly defined by the social income calculations of @ostock and lark. 3etween $A&H and $A#H the )ro ca)ita incomes when calculated back to a reichsmark base were as follows= north, west and central Euro)e ,- $&%%6,-$B%%, south6east Euro)e only ,- #H%6,- :%%, in Dugosla(ia ,- B%%, in ,omania ,- #H%. 3etween the countries there are also considerable )rice le(el differences. . hurried creation of a unit currency would end in failure )recisely because of these differences in income and )rice le(el, which determine the whole economic structure of the )artner countries. Therefore we are talking about an structural framework of harmonised )artner currencies, not a unit currency. In this, the leading )osition of the reichsmark is uncontested, as is the "ira in the south6east area. onnected with that is the focal )oint of 3erlin as the liJuidity centre of the currency reser(es of the )artner

currencies. 3erlin thus gains an e(en stronger )osition than "ondon did with the 8terling bloc. Is it )ossible to imagine, in reality, the future of the Euro)ean currency systemM The 3erlin transfer has to bring about freedom and foreign e7change Juality in Euro)ean trade, which reJuires the security of liJuidity of reichsmark credits. <uring the war such liJuidity in clearing balances cannot be achie(ed for well6 known reasons. The growth of the reichsmark clearing balances forms a noteworthy )arallel to the )iling u) of internal )urchasing )ower sur)luses, but it can Juickly change once the war is o(er and Germany+s industrial )roduction adKusts to goods reJuired in )eacetime and for e7)ort. EJually im)ortant is the fundamental task of )roducing and safeguarding balanced currency relationshi)s in Euro)e. The final definitions are yet to be decided but the clear, economic goal is full em)loyment in Euro)e and structural co6o)eration of all Euro)ean )artner countries in the interest of safeguarding goods su))ly for the whole area. The calculation basis of the currencies is to be made by carefully com)aring the (arious countries+ )rice le(els and ensuring that their balance of )ayments are ke)t in balance. In the case of )articular subseJuent )rice changes, an a))ro)riate re(ision of the e7change rates would be reJuired. In this way, there would still be some fle7ibility in the rates, which would reJuire less inter(entionist measures than in the case of a reichsmark central currency, which necessitates mani)ulation of the internal (alue of the Koint currencies. !f course, any changes to the e7change rate relationshi)s should be e7ce)tional instances. Tem)orary disturbances to balance of )ayment eJuilibrium e.g. caused by ad(erse har(ests would be bridged by com)ensating inter6national credit relationshi)s. areful agreement is also reJuired for the granting of short6term and long6term credit, which would be based on )rece)ts different to those in )re(ious decades. In )lace of international ca)italist loans of the .nglo68a7on69rench ty)e, which caused south6eastern countries to ha(e serious balance of )ayment difficulties in the global economic crisis, there will be in future credit systems based on bilateral trade in goods in(ol(ing the long6term de(elo)ment of )artner countries. The economic agreement between Germany and ,omania in $A#A e7em)lifies this.

Euro+es Future $urrency Relationshi+ to the $urrencies of ?ther Ma2or 4ations

<uring wartime, this Juestion is not yet rele(ant, but it will be after it. What is certain is that the structure of global economic trade will ha(e to be changed after the war. The old style, based on the theory of *com)arati(e costs+, suffered a hea(y blow in World War I due to the use of blockades and has now colla)sed in the second world war of the &%th century. Instead there will be a (ery different form of

trade for the )artner countries, which ha(e their economic focus in the same area and whose aim is the o(erall increase in the general standard of li(ing. !ne has to be aware of these re(olutionary global economic changes when considering the future sha)e of global currency relationshi)s. .n im)ortant fact arises from this, which is that the relationshi) between the so6called global currencies are central i.e. against the English ?ound and the U8 <ollar at the time. The focus has now shifted to the relationshi)s within the enlarged area. .fter the war the )rognosis is of a really intensi(e trade in goods between the new and old areas of the world. We Kust ha(e to think of the trade in German tool machinery, o)tical goods or chemicals in return for 8outh .merican goods or 9ar Eastern su))lies of soya beans or tin. 8imilar )ayment methods can be considered for this ty)e of international trade as well as those designed for currency e(ol(ement. .s >ice6?resident ?uhl recently )ointed out, it is Juite right that there will always be those countries that remain hostile to the idea of bilateral settlement. 9or e7am)le, )ayment forms in trading with nations, such as North .merica, will need to be freer. The economically strongest, and thus, the leading currency country in each maKor area has to constantly monitor the trade and currency relationshi)s between the other areas in order to kee) their balance of )ayments at the same le(el. Therefore, there is no need to worry that the de(elo)ment of freer )ayment forms in such a limited sector of international currency relationshi)s would bring about any undesired disturbances or side6effects. Therefore, we can conclude that the currency relationshi) between the maKor areas are not subKect to a dogmatically strict uniformity, rather it seems a mi7ed system will de(elo) based )artly on )ayment, )artly on defined, freer )ayment methods. The main task after the war will be to commit to new e7change rate relationshi)s. To many theoreticians and )ractitioners, the easiest solution might a))ear the re6 establishment of those )re6war relations, which to a great e7tent were artificial. /owe(er, what is easy is not always right. There are true and reliable methods for bringing about new and correct currency relationshi)s in the leading area countries. *?urchasing )ower )arity+ is one, which is described in recent research as being clearer than eJuilibrium rates. It is not )ossible to say today what these rates of the leading area countries will be like due to the war conditions and the (arying inflation rates in each one.

o3 about <oldC
What role will gold ha(e to )lay in the new currency order of the worldM . Juick answer to that is that it will not ha(e one where currency is concernedN The $%% th

birthday of Georg 9riedrich 1na)) is )resently being celebrated. /is definiti(e ser(ice was to finally settle the theory of *metallic (alue+ and re)lace it with the *National Theory of -oney.+ !nly now can the world draw the )ractical benefits. <oors ha(e now been o)ened with the realisation that the (alue of money is totally unrelated to the )hysical security of gold or sil(er. This does not mean, though, that gold is no longer of (alue. <es)ite lacking the commercial usability of co))er or tin, it will kee) its (alue as long as go(ernments and indi(iduals are )re)ared to e7change goods for it. .nd as long as the U8., which owns the most gold in the world, is )re)ared to )ay a fi7ed high )rice for it, gold will be the most highly (alued commodity in global trade. While that is so, gold can act as an e7traordinarily useful economic reser(e besides )ayment credits or free foreign e7change for the settlement of intercontinental )ayment relationshi)s. /ere is a Juotation from a s)eech made by the ,eich Economic -inister to the 8outh6East Euro)e om)any in $AB$ about the attitude to gold= 34e are not a+ainst +old$ the commodity$ a priority 0hich is neither a +ood nor a bad one/ It depends on ho0 it is used/ 4e ha1e ne1er ob5ected to its use %or ultimate settlement$ but it has to be distributed di%%erently than it is in the 0orld today/ Also a stability in its 1alue has to be +uaranteed internationally 0hich re6uires no lon+er usin+ trade and currency methods or re1isin+ the %actors that brou+ht about the collapse o% the old +lobal economic system o% the +old currency$ credit and trade7/ Besides$ 8ermany (%or completion maybe one can say continental Europe) 0ill ha1e at its disposal$ 0hen peace is a+reed$ enou+h +old %or the necessary international transactions$ as lon+ as o1erseas debts are not a currency problem %or us/ As %ar as 8ermany is concerned$ the +old problem is no lon+er a problem9/ This could not be formulated more clearly.

)he Euro+ean $urrency Bloc

/ere we come to an end. If our deliberations ha(e made one thing clear, it is the realisation that currency Juestions rule out an isolating )ers)ecti(e both in Euro)e and internationally. They ha(e to be looked at against the backdro) of the )olitical and economic e(ents in the world in order to a))reciate the true im)ortance and )ossibilities to create solutions. The geo6)olitical de(elo)ment of the &% th century is dri(ing towards the Euro)ean economic community. The currency order can remain Kust as untouched by it as any other economic area. We tried to show that after two and a half years of war we ha(e made some im)ortant ste)s towards establishing a degree of unification for the currency, as well as )olitically for the Euro)ean continent. .n accurate )arallel to this is the

German ustom+s Union of $'#B, which de(elo)ed the economic area of Germany. Now on a totally different )olitical le(el, Euro)ean co6o)eration is being brought about by the modern instruments of settlement agreements, Euro)ean economic treaties and the new order of the Euro)ean currency bloc. The o(erriding aim of the monetary and )olitical reform of our continent is a far reaching integration of credit markets and the regulation of inter6national transactions between each Euro)ean country, which is as free and non6bureaucratic as )ossible. .bo(e all this, there stands the o(erriding task of establishing an economic area with full em)loyment and safeguarded su))lies.

0amphlet 23>

Euro+ean )rade and Economic )reaties = by !r" $arl $lodius, %mbassador of the Forei#n ?ffice, Berlin, )he Period of the ?ld )rade Policy
Trade )olicy has undergone maKor changes in the last &%6#% years, which u) to $A$B was used to describe the settling of basic economic issues between indi(idual economies. .round the turn of the century, a classic ty)e of treaty only co(ered three im)ortant areas= right of settlement i.e. the indi(idual+s right to trade freely, duty issues and trans)ort issues, es)ecially shi))ing ones. The trade treaty was not generally decisi(e for the sha)ing of economic relationshi)s, but there were some, which actually had Juite radical effects, such as the German6.ustrian Treaty at the start of the century. The de(elo)ment of economic relationshi)s between two countries was, in general, not affected significantly by trade treaties. !f course, a good treaty could strengthen one of the )artners and (ice6(ersa. In any case, the function or ty)e of these treaties scarcely determined the o(erall functioning of economic life. The first maKor change came in $A$B when all )artici)ants in the war became interested in ha(ing state control of their economic relationshi)s. This entailed allowing e7)orts of (ital goods and the im)ort of non6(ital ones for the war. haotic years followed the war in the absence of )ractical trade )olicies until $A&B. Euro)e+s economic fate then was determined by Germany. It is a remarkable omen that it was not clear, at first, to those at the time that e(en the (anJuished Germany was not strong enough yet to make an im)act on Euro)e. 9rom $A$' onwards, Euro)e+s economic de(elo)ment de)ended on Germany, not England or 9rance. Euro)e+s economy remained sick as long as its heart was sick, as long as economic chaos )re(ailed in Germany, and as long as the drift towards economic catastro)he remained a )ossibility. The first ste) towards reco(ery was the creation of the stabilised -ark in $A&#. 9rom $A&B onwards, there began a normal )eriod of international economic relationshi)s, )articularly in Euro)e. 3etween $A&B and $A&A6#% there was the tem)orary im)ression that these relationshi)s would re(ert to the methods and structure of )re6World War I times. Germany+s treaty with Italy in $A&H was the first one it e(er signed with a maKor nation on the basis of economic eJuality and its outline was not so different from one of the classic treaties of )re6war times. The same is true of the treaty with 9rance in $A&I. .t the centre of these treaties was the institution of the customs office with which one e7)ected to control the flow of goods between countries.

The second maKor colla)se came with the world economic crisis )reci)itated by the crisis at the New Dork 8tock E7change in No(ember $A&', followed by the colla)se of the redit Institute in >ienna and of a maKor 3erlin bank in $A#$. Then came the most (isible e7)ression of colla)se with the de)reciation of the English ?ound in 8e)tember $A#$. What has been termed as the world economic crisis was brought to an end by a world leading )owers+ decision to de(alue, which was followed by lots of other countries, leading Juickly to the formation of the so6 called 8terling bloc. It was at this time in $A#$ that the )eriod of old trade )olicy Fi.e. control by treaty of basic )rinci)les while lea(ing the rest to free initiati(eG came to an end and ne(er to return. It is a (ain e7ercise trying to )ro)hesise about )recise facts but I still would like to say that the )ossibility of such a )eriod returning is not (ery strong. They, whose res)onsibility it is to direct )olitical relationshi)s, need to consider how to re)lace these original methods, conce)ts and structures. I do not share the (iew that theoretical )lans can sol(e international or Euro)ean economic )roblems. .dolf /itler+s Germany has constantly refused to attend international conferences and )artici)ate in any collecti(e solutions since $A##. !ur $H years+ negati(e e7)erience in the ?eo)le+s 9ederation in Gene(a took away our desire to re(ert to those methods and so I belie(e that Euro)e+s future sha)e will not ha(e its economic )rogramme decided at a conference with IH or A# delegates. Instead the Euro)ean nations will slowly arri(e at a closer alliance and a clear )icture will emerge from a number of indi(idual treaties between nations. It is im)ortant that each decision is made taking into account the reJuirements of the day and, es)ecially now, those of the war. What must, though, emerge from it all is a line, a )olicy, a )rogramme and a new future for Euro)e. This is the only safe and )ractical way to reach a concrete result, while a(oiding discussions about theories, )rinci)les, )ossibilities etc. What actually sha)es things is what one does on a daily basis in )ractice.

<erman Economic and )rade Policy since ./DD

The methods ha(e changed since $A#$, when England chose to de(alue and Germany, in its way, chose to create a controlled economy. The first ste)s were made with the $A## takeo(er by the National 8ocialists. The first systems for )ayment and foreign currency control were created by the central Euro)ean countries and around the same time .ustria, /ungary and 3ulgaria carried out the first foreign currency regulations. Then Germany signed the first settlement agreements with its friends and neighbours in central Euro)e. The basis of the )ayment agreement was sim)ly that each )artner makes a transfer in his country and then each account is credited or debited, as long as the amounts balance and the same amount is transferred. /owe(er, it becomes more com)licated as the ga) between the two countries+ trade )erformance grows.

3efore, it was )ossible for free foreign currency to be used for balancing out )ur)oses. If I sign twenty treaties with twenty countries, then some of them will tem)orarily ha(e to suffer and that is why, immediately after the transfer system was introduced, it was necessary to introduce bridging finance. There are also many )ossibilities to balance out by triangular clearings between three countries. This transfer system, which was constantly e7tended from $A#$ onwards, showed that good things can come out of bad. The controlled economy, which we introduced in $A##, relies, as far as Germany+s relationshi) with other countries is concerned, on the control of the transfer system. 9or this, it is necessary that state measures are taken so that the (alue of e7)orts and im)orts remain close to each other or, at least, that im)orts do not e7ceed e7)orts. .fter $A## the firm e7ecution of such a system was one of the main foundations of the ,eich+s internal German economic )olicy. It is an old law that says a burgeoning economy tends to attract im)orts and to im)ede e7)orts and (ice6(ersa. .s a result, a country that has high unem)loyment and is going through a bad de)ression internally can a))ear to ha(e a handsome balance of )ayments and trade balance. 9or a while there were Juite *)rominent+ )oliticians, financiers and economists in Euro)e, who were (ery )roud of this fact and who belie(ed that such a result was actually the goal of all wise economic )olicies. on(ersely, a booming economy can ha(e an ad(erse effect on the balance of )ayments and trade balance, as the demand for im)orted goods, such as for in(estment goods, rises. .nd after a )eriod of de)ression, )eo)le in em)loyment want to acJuire goods again. These were the factors that led the liberal economists and )oliticians of the old school to e7)lain again and again that there can be no true economic reco(ery, which is inde)endent of economic cycle theories. !ne of the most remarkable things was that for a long time the )re(ailing theory of economic science was to describe this coincidental situation as the thing most worth stri(ing for, whereas human effort, )ros)ects and energy were deemed most worthy of condemnation. There was no harsher criticism for the re)resentati(e of this liberalist school than if he would ha(e said that the reco(ery of a country+s economy does not corres)ond with our ideas about a real trade cycle, and as it is not real, it must colla)se. To me, it sums u) the difference between the )erson who works to earn money and the one who wins it in the lottery. The same is true when in relation to the economy. It was incredible how .dolf /itler dared to heal and strengthen the German economy, going against all e7)erience and )rinci)les. 8uccess should not ha(e ha))ened, as it went against the holy )rinci)les of science. Indeed success was achie(ed in nine years and further success is e7)ected. The Juestion now is how the ad(erse side effects caused by the heating u) of the economy can be )re(ented from affecting e7ternal relationshi)s. The only way is if

the control of the state a))aratus is strict and reliable, ca)able of blocking e7ternal countries only when there is a risk of im)orted goods e7ceeding e7)orts. In addition, tem)orary restrictions on tourist (isits abroad may be a))lied, or to ensure that the su))ly of goods on the internal market is not e7hausted. What has to ha))en is that the local manufacturer is forced to make a certain )ro)ortion of his out)ut a(ailable for sale in e7)ort markets whate(er his circumstances. 3ack in $A#$ and then again in $A## we had to gi(e oursel(es the o))ortunity of creating demand in our own market by )lacing )rotection around it. .t the start, the effect was only felt in Germany but later the effects were felt internationally. We certainly could not allow the de)ression surrounding Germany to affect our economy. It is good to recall now and again what ha))ened, because the ty)e of foreign currency )olicy and control that we o)erate brings with it considerable restrictions and difficulties for the indi(idual. 9rom my lengthy e7)erience in such internal )ositions I know full well the ramifications for the free economy, such as the bureaucratic burden and hindrances. .gainst that, though, consider all the great successes we ha(e achie(ed since $A## with our o(erall trade )olicy and internal economic )olicy= the com)lete eradication of unem)loyment, a huge increase in the out)ut of raw materials and finished goods. These results ha(e to Kustify the sacrifices that ha(e had to be made. The other )art of our )olicy has been to carry out a lot of re)air work, which has been )ossible by im)lementing control of foreign currencies. This has included e(erything relating to business with other countries= transfers, transactions, insurance, sea freight, rail freight, )ost, )hone charges, su))ort )ayments etc. EJually im)ortant are the )ayments of workers+ sa(ings, which also need to be controlled.

$han#es to )rade Policy $aused by the War

The )rinci)les of Euro)e+s trade )olicy today generally tend to follow along the lines of de(elo)ment as described. The war has brought an element of change as those countries in(ol(ed in the war are forced to take central control of im)ort and e7)ort and the distribution of raw materials, ensuring su))ly of (ital materials for the economy. In our case, this measure has brought about a steady increase in munitions out)ut. Germany has managed to sol(e e(erything in the s)ace of Kust two and a half years and this bodes well not only for our future but also the future of other countries fighting alongside us.

)he Re&ersal of the 5a3 of 'u++ly and !emand

<uring the war negotiations about trade, )olicy issues ha(e had to be )ut back to a great e7tent. .ccording to the old trade )olicy it was im)ortant to create sales markets i.e. the acti(e )erson was the one wanting to e7)ort, whereas the )assi(e one had to assert himself in order to obtain the goods. Now, though, the e7)orter has to fight to sell to the customer, meaning a re(ersal in the law of su))ly and demand.

)he Auestion of 5abour !e+loyment in Euro+e

This is becoming increasingly im)ortant for our Euro)ean )olicy. @ust as it ha))ened with raw materials, like coal etc., it has been increasingly necessary to achie(e a balance in labour i.e. to *suck u)+ workers in areas of high unem)loyment and de)loy them where there is a lack of man)ower. In Euro)e, hundreds of thousands of workers ha(e (olunteered to mo(e to a Kob in order to create a balance in Euro)e.

)he Problem of )raffic

This is an im)ortant subKect for Euro)e+s trade )olicy, but one that is affected greatly by the war. .s a result of the difficulties caused for sea freight, Euro)e+s internal routes and rail freight ha(e become more im)ortant. Establishing whether a raw material is a(ailable somewhere and if it can be trans)orted to the reJuired )lace are eJually im)ortant matters. The achie(ements in this area by the ,eich ,ailway are Juite e7traordinary, because almost all freight, due to geogra)hical reasons, has to cross Germany in either a north to south direction or east to west. The lack of freight trans)orted by sea means that Germany+s railway has had to take a lot of it. -oreo(er, it should be said that other countries like those in the south6east ha(e made e7traordinary achie(ements in the last year, es)ecially with the ad(ance on ,ussia.

Effects of the En#lish Blockade on Euro+e

In this conte7t it is interesting to assess the effects of the blockade on Germany and Euro)e. When war broke out our o))onents, 9rance and England, lost a large amount of their e7)ort (olume with Germany. 9or both sides, significant )ro)ortions of their e7)ort business were lost. 3esides that, England immediately lost a large )art of its Euro)ean trade while Germany lost the maKority of its o(erseas trade. <ue to the increase in the internal Euro)ean commerce o(er the last two and a half years, most

countries+ e7)ort trade figures ha(e reco(ered to )re6war le(els des)ite being in(ol(ed with fewer foreign markets. /owe(er, account needs to be taken of the effect of inflation, say #%R, but e(en so, the result is that between the Euro)ean countries Fincluding GermanyG the commercial (olumes are roughly the same now as before the war. Germany+s trade with Italy has increased fi(e6fold in the last three years. This )ro(es one of my earlier )oints about the benefit of foreign e7change control that it has brought about a greater intensity to our relationshi)s than the slow and difficult way of negotiations and conferences.

Princi+les of Euro+ean $o=o+eration )he Euro+ean Re#ional Princi+le

There is a sim)le )rinci)le that says that what can be bought in Euro)e should be bought there, Kust as what can be sold, should be sold in Euro)e as long as a there is a demand that needs to be met. If each economy and )erson follows this )rinci)le, then an economic entity can be almost totally created without the need for treaties, agreements etc. We ha(e signed agreements with sough6east Euro)e in this regard and a treaty with ,omania in $AB% under which Germany has committed to take u) ,omania+s grain sur)luses after the war at )rices that are )rofitable for ,omania regardless of world )rices. !ther )roducers of agricultural )roduce would be treated similarly. 3etween them, Germany and Italy are able to absorb the entire sur)lus of grain of Euro)e. !(erall one can say that in this area Euro)e is balanced, which means that there is no worry that Euro)e cannot feed itself or that, like now, intensi(e agricultural cultures in the south6east ha(e to be reduced because of artificially high )rices due to a market change. .n adeJuate su))ly for Euro)e will be assured later by the economic inclusion of and co6o)eration with ,ussian areas.

Euro+es Economic (nde+endence

The second )rinci)le of economic co6o)eration in Euro)e is this= Euro)e has to be made economically inde)endent enough for it to li(e. It would be too idealistic to belie(e that Euro)e can li(e the same way as it did with free trade, if it wanted to make itself economically inde)endent. That has ne(er been the idea of a Euro)ean community and nor should it e(er be. The essence of this )rinci)le of Euro)ean co6o)eration is that all nations of Euro)e and its economic scientists must endea(our to ensure that Euro)e is ne(er forced to star(e again by a )ower outside Euro)e. 9or Euro)e+s fate in future, this may be more im)ortant than whether its eJui)ment is one or two )oints stronger or weaker

than its enemy. !ne could belie(e that the )ossibility of an attack on Euro)e would no longer e7ist, if certain )owers outside Euro)e ceased to say= we Fthe non6 Euro)eansG lack the military might of the old nations of Euro)e, those bearers of military (irtues and traditions, and geogra)hically we are not in a )osition to conJuer Euro)e, if it is unified, but we ha(e always got the )ossibility to force Euro)e to star(e and regardless of all else. War or no war, (ictory or defeat, sometime this Euro)e will become noticed. Therefore the most im)ortant thing for the security of all of Euro)e that has to come out of this war is that it no foreign force can threaten it. What Euro)e will do with its new6won freedom is a Juestion, which its )eo)le ha(e to decide among themsel(es. The fundamental thing is that it, at last, achie(es inde)endence for itself.

Euro+e and the <lobal Economy

The third )rinci)al issue concerning Euro)e+s fate its e7ternal relationshi). The (iew is often heard that it would detract from Euro)e+s )osition in the world economy if such a )rocess of *intensification+ in Euro)e took )lace. This (iew is false because large economic entities ha(e always )ro(ed to be stronger and more )roducti(e than small ones. It is an old low of )hysics that states that the sum of all the )arts is stronger than the indi(idual )arts and this a))lies to )olitics as it does to other things, es)ecially the economy. Until the ad(ent of the ustoms Union, Germany was an economic area s)lit u) into o(er one hundred small areas. To tra(el from 3erlin to ologne meant crossing &% or &H boundaries, so no one can say today that Germany has not become a stronger economic unit by abolishing its internal boundaries 6 Juite the o))osite. 3etween $'%% and $'#: when the ustoms Union was introduced Germany was relati(ely uninteresting economically to the world. When ca)italism in England created the large modern factories, we were way behind. The u)swing came here when the ustoms Union created the first ste) to forming an entity and "ist wrote his genial work. The ste) towards an economic entity was also towards a )olitical one. 9rom $'I: onwards, Germany+s )osition in Euro)e and the world grew, which would ha(e been unthinkable if its internal boundaries had not been abolished. The U8. is another e7am)le of a large economic area coming together to create a strong economy with )urchasing )ower and e7)ort )ossibilities. It could ne(er be what it is today if there were still the $# inde)endent states. Its economic strength and interest in the world stems from the creation of this large economic area. This should hold true in the future and closer economic ties in Euro)e should lead to a strengthening of the Euro)ean area in relation to other continents, Kust as Germany+s economic fusion led to stronger German commerce. 9urthermore,

)urchasing )ower throughout Euro)e will grow, so there will be no worry whether Euro)e will be interesting as a )artner for the rest of the world. I ha(e already established that Euro)e should not become inde)endent in the sense that it can meet all of its own reJuirements, rather Euro)e should be sha)ed so that it cannot be star(ed of food or raw materials. .s long as it can )roduce a minimum le(el on which to e7ist, the surfeit can be used for e7)ort )ur)oses outside Euro)e when li(ing standards rise.

(nternal Pre=$onditions of a Euro+ean Economic $ommunity

/a(ing handled Euro)e+s global )osition and the most im)ortant )rinci)les for closer economic co6o)eration in Euro)e, I want to take the )ers)ecti(e of our )artners in Euro)e. It is known that )eo)le tend to be reticent when they are faced with economic change and it is remarkable to note the number of great re(olutionary minds and )ioneers that there were in our economy and other economies while the official o)inion still remained conser(ati(e. When 3remen Koined the ustoms Union, the (iew )re(ailed for many years there that its trade would die. We can remember how long 3remen remained an outsider in the ustoms Union because the local )eo)le )referred the city to act as a tem)orary bonded6warehouse facility for .merican goods en route, say, to Norway, rather than the consignment ha(ing to enter the German customs area. Instead, 3remen should ha(e acted as the )ort for all of the '%6$%%million )eo)le. When in $A#$ the ustoms Union of Germany and .ustria was )lanned des)ite the obstacle of the 9rench *diktat+, there were many bra(e German souls in >ienna at the time that told me that it would be the ruin of .ustria. In $A#' I made a )oint of reminding them of their words when unem)loyment disa))eared, when most factories doubled their )ay rolls, when the only concern was about raw materials and building enough factories. <es)ite the .ustrian e7)erience, there are still those who say that it is im)ossible to run an economy if it is incor)orated in a customs union where there is a )owerful industry like Germany+s. The mistake is in belie(ing that the new conditions would be the same before and that it would be difficult for the small nation to sur(i(e ne7t to the larger one with its )roduction ca)abilities. It is amazing that the e7)erts in the small economy lack the imagination to see that it then forms )art of a large economy. In discussions about the )roblem of Euro)ean integration we always come across these limitations in the thinking )rocess. The issue of foreign currency control is going to be an im)ortant Juestion for the sha)ing of economic life in Euro)e. In my introduction I broadly described the

de(elo)ment that led to today+s trade )olicy and how foreign currency control began as an emergency measure and ended u) being an effecti(e tool for controlling foreign trade. E(en today duties or contingencies )lay no )art. Instead the transaction control is the only trade control used between countries. When someone talks about a future Euro)e this is the most im)ortant thing. The remo(al of duties is not so im)ortant, as it )lays no significant )art today, but it may regain im)ortance at a later stage. I am con(inced that in the foreseeable future we will no longer ha(e what was called foreign currency transactions. I fully welcome that because the disad(antages of it, such as loss of )lanned control of the economy, would be greater than the )ossible ad(antages to be gained by indi(iduals. !n the other hand, it is worth trying to loosen a little the tight mesh in which economies e7ist today. Today we ha(e got to a )oint where we ha(e created bilateral treaties that effecti(ely guarantee all transactions. <uring the war only a few items, such as lu7ury ones, were e7cluded. .t discussions abroad I am freJuently confronted with obKections to Euro)ean co6o)eration that are Juite irrele(ant. The war is ob(iously the base cause of such thoughts, but certain effects of it ha(e nothing to do with Euro)ean co6o)eration, instead they are to do with the war and the blockade. The main difficulties cited are to do with raw material su))ly e(idenced by shortages and food rationing. In fact, the Euro)ean economy is the wea)on against this blockade. If we ha(e failed to remo(e the effects of the blockade today, then the successes we ha(e had so far are thanks to the Koint efforts of all the nations of Euro)e. It is wrong to belie(e that the )resent shortages are related to Euro)ean )lanning, instead they would be worse without it. 9reedom will return more and more after the war, so, although we may still ha(e foreign currency controls to some degree, it will be )ossible to tra(el, li(e and trade in Euro)e as we did before the time of controls. In the Euro)ean system we will ha(e a form of clearing that e(ens out the )eaks. 9or the indi(idual interested in this for his commercial needs and acti(ities, a situation is almost re6created which is barely different from the situation of free foreign currency control.

Ways to %chie&e Euro+ean $o=o+eration

.t the start I mention that we National 8ocialists are not )articularly enamoured of collecti(e international conferences. !(er the last twenty years I ha(e )artici)ated in many international negotiations with (arious Euro)ean nations. -any were fruitless, others Kust initial ones or attem)ts to negotiate4 but one thing is certain and that is that the ones that had a )ositi(e outcome were those trying to achie(e co6 o)eration between one state and another, rather than collecti(e ones. 3y creating a network of nations in Euro)e co6o)erating with one another, a fabric is formed. This fabric is stronger than a so6called skeleton agreement with certain )rinci)les containing a list of )ro(isos, rendering its actual a))lication no more

than an illusion. 9rom an intensi(e one to one relationshi) it will be )ossible to mo(e on to three6way treaties and to reach com)romises between the indi(idual nations. 3y carefully bringing about bilateral treaties, Euro)e will slowly start to distance itself from the outside world with which close treaties concerning goods, foreign e7change and traffic will not be e7cluded. !(er the years Germany has endea(oured re)eatedly to form friendly agreements with lots of go(ernments. . good e7am)le of this is the one with south6east Euro)e, with whom we ha(e tried to form a com)romise and a closer tie since $A##. !ur desire was to )re(ent the farmer in the south6east from li(ing in )o(erty, and a condition unworthy of the whole Euro)ean economy. I belie(e that .dolf /itler+s great actions to sa(e the German farmer will go down in the annals of history and also that )eo)le in Euro)e will start to realise how he also sa(ed the Euro)ean farmer. I know that we are still not yet able to bring the farmer in the south6east of Euro)e u) to the le(el of the one in the north where the economy is more intensi(e and )rices and li(ing standards are higher. /owe(er, a start has been made with changes (isible in (illages in the south6east where wealth has grown, li(estock has increased and )roduction is more intensi(e. I belie(e too that we will ele(ate Euro)e in general to a le(el higher than e(er before. When we started this )olicy in $A#&U## we came across a lot of resistance, sce)ticism and distrust, not only in Germany. Two treaties, one with /ungary in 9ebruary and with Dugosla(ia in -ay $A#B, set standards in the agricultural sector. These were the first treaties in which we granted unilateral )references and it is clear that we ha(e to )ursue further the route of com)romise. "et us now take a look at certain (ery wealthy countries in the north of Euro)e. There one sometimes hears the argument that things are so good with them that Euro)e would ha(e to come u) to their le(el first. It is clear that that cannot be the obKecti(e of a community6led Euro)ean economic )olicy. -ar7ism got it wrong in that it did nothing to ele(ate those lower down the order, whereas a social economy, in our sense, should use all the a))ro)riate measures to ele(ate the lower social classes. In the same way, the Euro)ean economic community has the aim of ele(ating those countries left behind economically due to historical, geogra)hic or climactic reasons to the le(el of the other countries. @ust as has ha))ened u) to now, it will become a))arent that the only country that contributes to the scheme will itself benefit from it more and more. The o(erall effect will be a strengthening of Euro)e+s )osition in the global economy. We Germans are con(inced that this outcome of Euro)ean economic co6o)eration and economic isolationism will be, and must be, one of the most significant results of the war. We also belie(e and ho)e that )eo)le from Euro)e, who without e7ce)tion are fighting on our side, will work together with us in the same s)irit to

achie(e a new Euro)ean economic structure. !ne thing is certain= a truly )eaceful Euro)ean economy can only come about through (oluntary and Koyful co6o)eration between all )artici)ating nations. The aim of a war cannot be to achie(e something in this area with force and (iolence, but it can be the obKecti(e of our statesmen to act as )re)arers of the way, )ointing out the o))ortunities to be gained from building a Euro)ean economy. .fter the war they will lea(e others to construct and e7tend this home where there is (oluntary co6o)eration between all the nations. The )roKect+s success rests on e(ery nation+s belief that such a de(elo)ment is in their interest as well as Germany+s, so that a Euro)ean )olicy Fnot Kust of one nationG is )ursued, which at the same time ser(es the good of each indi(idual nation.

0amphlet 239

)he Basic Auestion: Euro+e = <eo#ra+hic $once+t or Political Fact by Prof" !r" einrich unke Economics $ommittee %d&iser of the 4'!%P, President of <ermanys Economic Publicity %#ency 4e3 5earnin# and )hou#ht
8ince the start of World War I, Germany, Euro)e and the whole world has had an obKect lesson in economics and economic )olicy full of truly bitter e7)eriences for all concerned and which, on the other hand, )ro(ides new )ers)ecti(es of unimaginable magnitude. True, crises ha))ened before the world war4 the wealth of great nations+ had been wi)ed out by (iolent conflicts and in the .merican i(il War, economic warfare emerged as a new wea)on. 3ut the last &H years ha(e shaken the s)iritual and )ractical structure of the economy in such a way as no other )eriod. In .ugust $A$B, the world held as absolutely true the belief that the economy was something that e7isted on its own and was a law unto itself. It was the ?resident of the Issuing 3ank and the men of commerce, )rofessors and lay6)eo)le who noted from the ine7orable increase in global trade both the signs and the nature of a new economic era. Now, &H years later, the economy has become controllable, one used to ser(e its )eo)le, and now e7)erts and theoreticians are in(ol(ed in gaining more knowledge about economic and )olitical life. We in Germany had to deal with the )roblems of economic reconstruction (ery early on, so we were the first to get away from the idea of e(erything being determined by the automatic laws of economics. It was National 8ocialism that was first to recognise that work re)resents the foundation and wealth of a social economy. This means that work has to be the corner stone of any future moral order. /ere, then, is the .rchimedes ?rinci)le that can turn the whole ca)italist economy u)side down. We ha(e also learned that the main tasks ahead can be recognised and affirmed without the belief that they can ultimately be achie(ed. What is reJuired is a clear understanding of what stands before us, without which the desire to tread new economic )aths will ne(er be )resent. In $A&# in Germany the e(er6de)reciating reichsmark created a feeling of im)ossibility and moral derangement. The creation of the *stabilised mark+ was an une7)ected miracle for most of us. In $A#& we all saw that we had to sol(e unem)loyment, but the old doctrine failed to see any )ossibility of doing this. It started with the crystal clear understanding of a few )eo)le about economic )rocesses, then the faith of many )eo)le and the iron resol(e of one indi(idual who sought the solution of this massi(e task, which flew in the face of all )re(ious e7)erience.

Today we are faced with similar tasks together with the other Euro)ean nations, such as rebuilding the Euro)ean economy, mobilising our agricultural sector, industry and trans)ort. 8ol(ing these )roblems kee)s )ro(iding us with new )ers)ecti(es and challenging the theories and )ractices of the )ast. Two things a))ear necessary to us now= firstly, e(eryone needs to be made aware of the tasks that face us. Therefore it )leases me that it has been )ossible for our leading e7)erts to discuss here the economic )roblems of labour de)loyment, agriculture, industry, trans)ort, currencies and Euro)ean co6o)eration. Then these tasks ha(e to be recognised, understood and carried out unanimously. This is the most difficult thing. In this )eriod of new thinking it is more im)ortant than e(er before to create a link between word and deed, because the effecti(e solution of a )roblem relies on it first being unanimously recognised. 9inally I want to make some basic obser(ations about the situation today regarding the economic )roblem in Euro)e and try to establish a direction for the solution of the )olitical and economic )roblems. In doing so, I ho)e to make a significant contribution to the )roblem of our enlarged area. To me they a))ear all the more im)ortant when this im)ortant conce)t lies hidden under other issues and is e7)osed to the same dangers.

)he 'tartin# Point for the Euro+ean )ask )hree Eras

In considering this Juestion what has to be held true is that the creation of the Euro)ean economic community is a totally natural manifestation of the regeneration of the old continent. . Juick look at the last BH% years since hristo)her olumbus landed on the oral Island in the West Indies shows this clearly. 9irstly there is an argument that Euro)e li(ed u) to $AB& from its own energy and built u) its own great culture and economy. This fact remains beyond doubt. In )urely economic terms, the disco(eries had absolutely no significance for the Euro)ean economy for the centuries )receding us. The only e7ce)tion being the im)ortation of s)ices and )recious metals. In his book *,ecent World /istory+, <ietrich 8chXfer, in agreement with e(ery other historian, Juite rightly says, 2 The New World, which today is flooding the !ld World with its )roducts and threatens to kill off )roduction in Euro)e, has nothing to offer its disco(erers. The animals it uses to create a large )art of its wealth emanate from Euro)e. -aize was the only indigenous ty)e of cereal to

.merica, which along with the )otato were the only two cro)s that the New World could su))ly to the !ld World. It is well known that it took centuries until these cro)s grew in sufficient Juantities to feed local )o)ulations. E(en the tro)ical and sub6tro)ical )roduce, which .merica sells today, were totally lacking in the first one hundred years after its disco(ery or were only a(ailable for e7)ort on too limited a basis to )roduce a )rofit. 8ugar cane brought o(er from Euro)e was first grown in Tahiti, but after the three centuries of 8)anish ownershi) the yields still remained limited. Euro)eans, we know disco(ered tobacco in .merica, but took time to de(elo) a liking for it. 8o there was absolutely nothing in the beginning that could be traded )rofitably or in sufficient Juantities. Emigrating to India was im)ossible, whereas to .merica it was )ossible on a limited basis.5 The e7)loitation of the o(erseas territories only actually ha))ened in the last century and a half, made )ossible by Euro)ean )eo)le and their in(entions, which turned these territories in to an o(erseas Euro)e. White )eo)le crossed the 2)ond5 and were followed by machinery, the railways and other means of trans)ort. .ll Euro)ean nations worked together in this task. Germany, abo(e all others, )ro(ided the New World with its organisers, soldiers and workers. It was undoubtedly an im)ressi(e achie(ement within Kust a few generations to )ro(ide an entire new world with a new )o)ulation, a new s)irit, a new culture and ci(ilisation. We still belie(e that it was only in the $Ath century that the o(erseas territories became truly significant for Euro)e. What we must also acce)t is the fact that the achie(ements of Euro)e o(erseas were accom)anied by its disintegration. Three facts immediately stand out= the emergence of the global economy s)elt the loss of Euro)e+s economic so(ereignty4 the amassing of huge colonial )ossessions led to the destruction of the ,eich4 and the success of the .nglo 8a7on economic )rinci)les signified the end of the Euro)ean economic community. Three theses, then, that should be easy to demonstrate.

)he $haracter of the <lobal Economy

I mentioned that Euro)e+s economic so(ereignity was destroyed by the emergence of the global economy. It cannot be denied that Euro)e lost all interest for its )eo)le in a (ery short s)ace of time due to the wonderful o))ortunities o(erseas. E(en at the start of the $A th century, it was )ossible to trans)ort the entire cotton cro) of the U8. on board one shi) since the out)ut was so small then. -ore and more ra)idly Euro)e+s food and raw material basis mo(ed to the New World and to other continents, so that we soon became de)endent on that which we used to make oursel(es. 8uddenly our cereal and our cotton became .merica+s cereal and cotton and e(eryone said= 2 What does .merica ha(e to sayM5 9or thousands of years before, though, it had been (ery differentN

This de(elo)ment would ha(e )osed no danger if the new global economy had re)resented something real, something lasting, that ga(e all Euro)ean nations the same o))ortunities. Not so, this one li(ed off the world )ower of England and turned the other Euro)ean nations into )ro(incial areas of the English Em)ire. Today all this is e(ident to us, strange as this may sound, as we now recognise that the creation of a global economy can ne(er be eJuated with the society of any nation. The domestic, urban and social economies are all su))orted and formed by somebody. 9amily, community, nation. .s long as mankind, in the )olitical sense, remains no more than a conce)t, the global economy will not become reality. Instead it will remain de)endent on )olitical )ower for its foundation and order. What the global economy means and how long it will sur(i(e de)ends on its creator. We can see clearly that our efforts to establish labour di(ision throughout the world ha(e undermined our (ery own e7istence.

Political Weakness of $ontinental Euro+e due to the (dea of En#lish World 'u+eriority
The decisi(e )oint is that Euro)e+s loss of economic so(ereignty entailed the loss of its )olitical so(ereignty. .t the time of the disco(eries around the world, the )olitical order of our continent began to decay. The German ,eich had )ro(ided this order for centuries, which had guaranteed its social, cultural and economic (alues. .s the ,eich fell a)art, the em)hasis mo(ed out to the nations on the edge of Euro)e 6 to 8)ain, 9rance, /olland and finally to Great 3ritain. What is really decisi(e, though, is that Great 3ritain belie(ed that the only way to create and maintain order o(erseas was to render Euro)e )olitically weak. The English ?rime -inister, 8alisbury, for e7am)le said in substantiation of the 3alance of ?ower ?rinci)le In Euro)e, 2We do not seek to di(ide territories, but to break down any dominant )ower.5 -r. Eden echoed these words in No(ember $A#:= 2The e7tent of the )olitical em)ire+s res)onsibility in the world necessitates its close in(ol(ement in Euro)ean affairs. Through its free )osition, England has come to acce)t three main )rinci)les in its relationshi)s with Euro)e. $. &. #. No )ower can be allowed to challenge its natural su)eriority in the North 8ea and the English hannel. 8mall nations must ne(er be allowed to fall into the hands of large )owers. "arge )owers must not be allowed to gain su)eriority in continental Euro)e, as this would )ose a threat to Great 3ritain.

Thus we see that England regarded Euro)ean )olitical weakness as a )re6reJuisite for its economic dominance and also that the Juestion of Germany does not feature at all. E7)ressed more succinctly, all of England+s global economic )lans will endea(our to Juash Euro)e+s attem)t to regain its )olitical and economic so(ereignty with e(ery means a(ailable.

Britains !ominant )heory about the Modern 4ational Economy

9ollowing on from the abo(e two )oints there then came the infiltration of Euro)e by the .nglo68a7on economic (iew, which disguised itself as the modern global economic theory and was thus widely obser(ed. It re)resented the following )rinci)les= $. -arket forces determine e(erything that ha))ens on earth. ?rice is res)onsible for regulating economic affairs and decides the fate of nations and indi(iduals. It re)laces the need for social ideals, moral ties and state reJuirements. The owner of ca)ital is in control of economic goods, )roduction and consum)tion. a)ital re)resents the commanding )osition in our economic life. International freedom of mo(ement is the be all and end all. E(eryone should be able to settle where they see the best )lace for their commercial acti(ity i.e. where there seem to be the chea)er )roduction conditions and the lowest trans)ort costs.

&.

#.

There is no doubt about the huge significance of these three )rinci)les. The world has )ractically li(ed and breathed this (iew without looking at its foundation and detecting its side effects 6 until they were re(ealed to e(eryone by the great economic, )olitical and s)iritual crisis. In my o)inion, the English economy is determined totally by this )re(ailing .nglo68a7on economic (iew, as England+s economic greatness ultimately relies on the belief of its )eo)le in the rightness and singularity of the 3ritish )rinci)les. Thus, either consciously or unconsciously, England guided the economic de(elo)ment of all nations along it own lines. E7)erts were dominated by this )owerful theory. The dominance of the "ondon 8tock E7change and the hegemony of the English ?ound were also the e7)ression of England+s s)iritual )ower, Kust as the old economic science of England was. It is also true that e(en u) to our time there was the belief that ca)ital sha)ed the economy and that the theory of com)arati(e costs was the )i(otal instrument of global economic theory. .s a result, )eo)le failed to recognise what really sha)ed their li(es4 and that is )eo)le and room 6 not international markets. What also ha))ened was the automation of Euro)e. In a farming (illage it is taken as understood that e(eryone de)ends on each other and hel) each other, but in Euro)e each nation, each

)erson+s Kob and each business li(ed Kust for its own interest. Euro)e had become a geogra)hic conce)t.

)he Foundation of the Euro+ean Economic $ommunity

Now, though, Euro)e cannot e7ist )urely as a geogra)hical conce)t. Instead, its foundation of e7istence lien in its )olitical )ower and its consciousness of )olitical unity. I will totally ignore the fact that geogra)hers cannot e(en define Euro)e )ro)erly. arl ,itter, the old e7)ert on geogra)hy, concluded that Euro)e, as the ruler of the other continents, 2could Juite rightly )ro(ide the highest classification concerning the world+s historical and )olitical condition, )lacing it into two main categories= aG the Euro)ean world, to which e(en the euro)eanised one belonged.

bG the non6Euro)ean world, which was not ad(anced to the le(el of Euro)ean ci(ilisation.5 ,egarding the Juestion of the boundaries of the Euro)ean continent he said, 2 the eastern border has been decided by the de(elo)ment of history5 and 2 Euro)e+s natural border coincides with that of its )eo)le, its way of life and ci(ilisation.5 Today our "eader himself has again )ointed out that Euro)e has no geogra)hic definition, Kust a national and cultural one. To him, its borders are sim)ly defined by the West+s history to date and he )ointed to Euro)e historical emergence, which originated from that island in Greece, coming (ia the ,oman Em)ire to the west. To him, Euro)e was the area 2of a family of )eo)le, amongst whom the )olitical organisation and obKecti(es might be Juite di(ergent and different. In blood and cultural terms, though, it re)resents o(erall a unity that is com)lementary to itself.5 9rom this realisation that Euro)e is not a geogra)hical conce)t a number of conclusions ha(e to be drawn, which are of crucial im)ortance for the future economic and )olitical co6o)eration of the )eo)le of Euro)e. $. Theoretically, conce)ts such as an enlarged area and its economy ha(e to be reKected because they are (acuous and undefined. Nothing is said about the area itself, other than it is of a )articular size, one larger than has been generally the case. We are not hel)ed by the mere introduction of an unsubstantiated conce)t in economic arguments.

&. The decisi(e things in the new unity of Euro)e are the ty)e of co6o)eration and way of li(ing within this unity. Im)ortant )olitical conclusions stem from this statement. 9irstly, that it is only )ossible for Euro)eans to li(e a Euro)ean life if the struggle between nationalities of this area is limited to the s)iritual s)here and nothing

else. Then there is the s)iritual and )olitical solidarity, e(en a community relating to the area which is the decisi(e feature of the new structure. 9inally, that the only aim of economic co6o)eration can be the Euro)ean economic community. #. The decisi(e economic and )olitical conclusion, therefore, is that Euro)e does not become, say, a so6called enlarged area in the sense of a smaller global economy )er(aded by the old .nglo68a7on economic laws. Instead the Euro)ean economic community has to be sha)ed according to new )olitical categories, so it will look different to the economy of the )ast.

$ate#ories 3ithin the Euro+ean Economic $ommunity

Euro)e, the geogra)hical conce)t, is therefore in the )rocess of making room for a )olitical fact. The decisi(e economic categories of this de(elo)ment will consist of re)lacing the indi(idual with society, global market with li(ing area F*"ebensraum+G, ca)ital with organisation of the work)lace. The success of these three )rinci)les will herald an economic and )olitical de(elo)ment of re(olutionary magnitude.

)hree Princi+les
'ociety Re+laces the (ndi&idual This means that an economy+s obKecti(e becomes totally different and the unbridled urge to earn money is no longer the regulator of the economy. In its stead is the controlling authority of the community, which safeguards the tie between economy and society. This must be ke)t se)arate from the organisational restrictions, otherwise damage will be caused. 5i&in# %rea Re+laces the <lobal Market To clearly differentiate between these two conce)ts, it is best to com)are the (iews of their two great )ro)onents= that of .dam 8mith and 9riedrich "ist. .ccording to .dam 8mith+s theory of free trade through free com)etition each country )roduces those goods which it can )roduce best i.e. most chea)ly. Each country can then buy most efficiently and sell to best ad(antage. 9riedrich "ist, on the other hand, held that di(ision of labour within nations, and not between nations, brought about the best )erformance. 9or him, an economy does not consist of mathematical (alues or e7change (alues4 rather it grows from the a(ailability and use of latent )roducti(e forces among the )eo)le and is synonymous with the awakening of all the )roducti(e forces of the nation. The following table ser(es to show the two o))osing economic (iews=

%dam 'mith represents the mar2et theory$

whose highest (alue is the (alue of the market or the e7change (alue, international labour di(ision is the route to wealth, the aim of .dam 8mith and of free trade is harmony between all indi(iduals, .dam 8mith+s thinking is cosmo)olitan,

Friedrich 5ist represents the producti1e %orces$

theory

o%

whose highest (alue is the )roducti(e force, confederation, i.e. the )ooling of )roducti(e forces is the route to wealth the aim of 9riedrich "ist is the de(elo)ment of the energy of the )eo)le 9riedrich "ist+s and our thinking is )olitical.

There can be no doubt that the two economic (iews are theoretically and )ractically )oles a)art and that is why the outcome of the )resent struggle will be of utmost im)ortance in economic and )olitical terms for e(ery Euro)ean nation. . note about the conce)t of li(ing area itself, which I ha(e briefly outlined as follows= to Germany, its li(ing area is= $. &. #. . sufficient area for it to be able to li(e and grow in an enclosed settlement in Euro)e. The shift in focus of Germany+s economy to within its actual national area. The recognition of the de(elo)ment of a mainland Euro)ean economic community, which allows the utilisation of its inherent economic forces, and ensures mutual su))lementation through economic achie(ement between friendly neighbouring nations. The e7tension of a colonial economic area, such as is common and )ossible elsewhere in the world.

B.

We see from this definition that li(ing area is not identical to the area of the nation. We also see that the liberal (iew, which says that economic su))ly is totally inde)endent of the )olitically go(erned area, is erroneous and can be reKected, in the same way as the mercantile (iew of the identity of the national and economic area is reKected. This (iew of li(ing area clearly establishes the economic relationshi) with the other nations of Euro)e, for if we demand li(ing area for Germany, this also affirms li(ing area for other foreign nations. The aim of the theory of li(ing areas is sim)ly to form a new Euro)ean order, which guarantees all nations its own li(ing area.

)hinkin# in the Work+lace Re+laces the )heory of $a+ital .s I said before, here lies the .rchimedes ?rinci)le, which gi(es us )ower to construct once again a new culture, a new economy on our continent. 9or ages, it has been recognised that work is the source of wealth, a fact only o(ershadowed in more recent generations by a fateful su)erstition that said that ca)ital somehow had some determining influence on work. 9rom this was born the unhealthy conseJuence that a nation could ha(e too many workers. !nly falteringly do )eo)le start to realise again that the limit of a nation+s wealth de)ends on its ability to organise its work. It is ob(ious that these three )rinci)les, mentioned abo(e, will ha(e their )ractical effects. I ha(e to )oint once again to the e7am)le of the re(i(al of the south6east Euro)ean economies after $A##. This shows how new methods used in these countries )roduced real indis)utable successes. Dou see, Germany did not suffocate its )artners there with financial de)endence, or make them financially indebted. No monocultures were demanded or caused4 )rices were not held down. Germany Kust bought goods, )aid for them )ro)erly. Germany released and de(elo)ed the )roducti(e forces in these countries in the sense of 9riedrich "ist.

% 4e3 Era
The final constitution of the Euro)ean economic community could be something along the following lines= 9irst of all there will be a general change in ways of )roduction through the utilisation of )roducti(e forces of the )eo)le. What is )roduced will be determined by the energies of the nation and its area, not by the )rice that the world markets will )ay. !ne could )erha)s say that freedom of work re)laces freedom of the economy meaning that those national monocultures that are controlled by )rice would )ractically come to an end. It cannot make sense to Koin all the Euro)ean countries through a customs union Kust to build a smaller (ersion of the English global economy full of the same mistakes. ustoms unions are a useful means of remo(ing unnecessary difficulties between two national economies of the same le(el, if reJuired. It would unnecessarily disturb and Keo)ardise the natural coalescence of the Euro)ean economies if customs barriers were suddenly remo(ed in Euro)e today. !n the other hand, the obKecti(e of future economic co6o)eration is to create a community of li(ing s)ace i.e. it cannot be, say, the task of the new economic )olicy to destroy monocultures and re)lace them with im)ossible insularities. If the German ,eich had )ulled back the em)hasis of its economy to its national area then that would send a strong message to the rest of Euro)e. The small nations of Euro)e must ne(er remain in any doubt that they too are de)endent on their neighbours and must take them into consideration. In $A#& 8ering rightly )ointed

out that the strength of the .merican economy would break as soon as customs barriers went u) on all of the B' states+ borders, as in Euro)e. Not only that, that the Euro)ean nations would run the danger of being su))ressed economically and losing their )olitical inde)endence if, one day, a new structural grou) came along and sto))ed the economic deterioration of the indi(idual nations. There will be two fundamentally new manifestations in this Euro)ean economic community= full em)loyment and self sufficiency in essential goods. 9or me, there is no doubt that the e7)eriences of the German )eo)le will lead them to teach other nations ways to achie(e higher em)loyment. Nor do I doubt that the success of Euro)ean tasks, which are determined by the e7)loitation of large )arts of the continent, will call into )lay energies, which can be barely imagined today. In doing so, as 3ernhard 1Ehler once said in relation to the German )eo)le, the )eo)le of Euro)e will liberate themsel(es from )roletarian restlessness and build a new life for themsel(es. EJually im)ortant will be the reJuirement that essential goods must always be a(ailable if this reJuirement is ado)ted as a )rinci)le in )eo)le+s consciousness, and thus ado)ted into the )ractice of the economy. The reJuirement is itself final, because what other meaning could the conce)t of li(ing area ha(e other than )ermanent access to essential goodsN The de(elo)ment of all inherent economic forces of a nation and their su))lementation by friendly neighbours are therefore the normal economic foundations and the necessary links in the security chain of a nation. learly, these effects of the Euro)ean economic community will herald a totally new era for Euro)e and the im)lementation of the new )rinci)les will ha(e many obstacles to o(ercome. The de(elo)ment of many )rocesses of economic control and economic trade between nations shows the careful a))roach to sol(ing )roblems that is necessary. The difficulties in Euro)e are in )eo)les+ mind, not in the economic world. Today it )robably would not occur to anyone to take deli(ery of the earnings for a community and di(ide it u) until that money is used. It would all be worked out on )a)er and each )erson allotted his amount. E(en u) to $%% years ago, for e7am)le, brick workers had their earnings distributed, where the *-eister+ used to take deli(ery all the money and )lace it in a )ot before his colleagues. Then he and the foremen would take what and this was ke)t se)arate from the amount in the *)ot+. Then, starting with the *-eister+, each worker would take their coin in turn. The distribution of the small sil(er and co))er coins continued until the money had finished. The workers tended to watch the working out on )a)er with distrust, as it could be wrong. /owe(er, there was no error in this method of calculation. Nowadays we tend to laugh at this method of )ayment, because it is different to what we are used to. !ur attitude towards many management related issues related is influenced by the same ty)e of distrust, but e(entually it will gi(e way to a greater le(el of understanding.

Going back to the )roblem of clearing )eaks, it is understandable that there are still those )eo)le who regard them with dee) distrust. They would )refer to be in the )osition of those brick workers, being )aid bit by bit, whereas in reality the situation is clear= $. It goes without saying Germany is at the moment struggling to meet its contractual obligations in the way it did before, because it is stri(ing to achie(e a final (ictory. 3esides that it must be obser(ed= &. #. Early on in the war Germany trusted its neighbours to deli(er later. /ere the word is *trust+. E(en longer ago, the indi(idual nations were creditors to foreign countries, but with the difference that settlement was to be in gold and foreign currency.

8o basically nothing has changed e7ce)t for the fact that today this ty)e of settlement system would be e7traordinarily difficult, because (ery few nations regard this method as acce)table and )ractical. If gold and foreign currency were a(ailable then there would be no hesitation in entering these (alues in the balance sheet and to claim as co(er for cash. .n agreement made in a treaty is today considered by indi(idual )artners as a risk or a burden because their e7)ectations ha(e already been dashed. B. This is the decisi(e )oint. Today the German economy continues to su))ly incredible Juantities of goods and its ca)acities still easily e7ceed the demands that are being )laced on it.

The )roblem regarding clearing )eaks that I mentioned basically relates to decisions to do with the new Euro)e. The significance of the )ower of Germany+s economy sets the conditions for the game that has now started. Dou see, management is all about balancing out, but you can only do that if you ha(e the a))ro)riate o))ortunities. 3eyond that, the )rereJuisite for bringing about and de(elo)ing the Euro)ean economic community is making )eo)le familiar with the new world of ideas.

)akin# a 5ook Back to the Past and to the Future

!n our way to creating a community with li(ing area we must not get di(erted by the minor obstacles. . Juite unusual stage has been reached on our way to the new Euro)e. "ooking back we can clearly see as follows= we could recognise common Euro)ean )roblems through our shared )light. It started in No(ember $A#& with the Euro)e ongress in ,ome to discuss the subKect 2The Euro)ean risis5 and to re(iew s)iritual unity, economic domination and the continent+s cultural Juestions.

Then last year in the autumn the anti6 omintern ?act was formed in 3erlin. That is real )rogress in engendering the )hysical forces of Euro)e in the fight to maintain Euro)ean cultureN 9or me there is no doubt that no nation in Euro)e can a(oid the great Juestion which is being fought o(er today. -ore im)ortantly though, our shared )light brought about s)iritual and )olitical mo(ements of the same orientation throughout the di(erse nations in Euro)e. .lmost simultaneously and inde)endently of one another, men in all Euro)ean nations rose u) and formed grou)s, fronts and mo(ements. This was sim)ly an e7)ression of the time that had come. They formed new ideas and, in the most im)ortant countries, ga(e the state a new face. I deliberately refrain from citing e7am)les. .greement is so )rofound that the one )arty system is the new )olitical form that is right for Euro)e, in contrast to the multi6)arty one. In the area of economic control such unity also )re(ails. In this time of disru)tion, difficulties and defence that we ha(e to face it is only natural that we kee) remembering our shared )ast. !ur common cultural basis will slowly grow into a Euro)ean consciousness. The decisi(ely im)ortant thing that is going to ha))en on our way to a new future for our old continent is co6o)eration. ?russia, and with it the ,eich grew from the colonisation of all those of German origin. I belie(e that nothing will )romote and sha)e the Euro)ean economic community more than future co6o)eration with the east Euro)ean nations. There is no doubt about the seriousness of the hour, nor the great o))ortunities that e7ist for the whole of Euro)e. Today we are fighting for our (ery li(es. -uch of what was created o(erseas by Euro)ean )eo)le is now lost. 9ate has left us with home, family and work, which are now being defended in Euro)e by us. It now de)ends on us whether we can once again build a new world and safeguard a new life and wealth for oursel(es. .head of us the outlines of this new world can be made out. Whether we build that land oursel(es, or not, is u) to us. It de)ends on our will and how we de(elo) and utilise our strength.