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. Everybody in Germany was bitterly amused at this ingeniousproduct of statistical witchcraft.Everybody knew that to mend anold suit or coat, or even have alterations made would cost morethan a new suit or coat before the war.Or a patch on the sole ofhis shoe would cost more than a pair of new shoes had cost notlong ago. The new shoes or coat being unobtainable and the rations pur-chased at no more than a quarter above the former price being in-adequate to sustain life, these statistics had no validity.Moreover, the income of the average worker hardly covered thecost of the rationed foods.Only such industrialists who could pro-cure extra food for their workers, or who produced goods whichthey could give them to sell on the black market, could continue tooperate their factories successfully.Inflation of the currency, started by the Nazis, but immenselyincreased by Military Government at the beginning of the occupa-tion, when it handed over to the Russians the plates to print un-limited quantities of marks, further increased the economic chaosin Germany.Currency reform was delayed for years in the hope of coming toan agreement with the Russians.And when finally, in June 1948,it was instituted by the Western powers, it was carried out in asunjust a manner as could possibly have been conceived.All savingsbeyond a bare ten per cent were wiped out, and no provision wasmade for the widows and orphans and aged who had no othermeans of subsistence, or for the crippled veterans unable to work.A multitude of small industrial enterprises were ruined; the cityand state administrations were deprived of the funds out of whichthey had paid a dole to the unemployed and the millions of ex-pellees driven into Rump Germany.Charitable organizations lostpractically all their funds and post-office savings were wiped out.Currency reform, in fact, was like a drastic surgical operationperformed by a doctor who was determined either that the patientshould die, or recover the strength to cease being a pensioner of theWestern powers.For a time the operation seemed to have beensuccessful.The sick and the crippled, the unemployed and the un-employable were deprived of the means of existence.But the in-centive to work was revived for a time, and manufacturers andmerchants who had withheld their goods from the market so long HOW NOT TO TEACH DEMOCRACY 259as they could obtain no profit by selling them, brought them outnow that they could be exchanged for money which had acquiredreal values.And the peasants and farmers who had hidden theirproduce, or consumed it, so long as it could not be exchanged forthe manufactured goods they needed, brought food to the market,after the currency reform.This happy development was however short-lived.The slack wassoon taken up.Since Military Government failed to import suffi-cient raw materials to keep German industry producing, within afew months of currency reform hoarding began again, prices rose,and the workers found themselves worse off, or no better off, thanbefore currency reform.Moreover, dismantlement, held in abey-ance before currency reform, assumed disastrous proportions after-wards, so that the possibility of Western Germany producing andexporting the manufactured goods to pay for raw material imports,continually diminished.German suspicions of the good faith of America in allowing therevival of private enterprise, and the possibility of the Germansworking for their own support, were heightened by the currentrumors that the proceeds of German exports were being used toliquidate the debt incurred by the United States Army at the be-ginning of the occupation when we not only allowed the Russiansto print unlimited quantities of marks, but permitted Americansoldiers to exchange this paper (obtained by selling watches, ciga-rettes, chocolate, and other goods to the Russians) for Americandollars.Mr.Logan, the new chief of the Joint Export and Import Agencyfor Bizonia appointed in 1948, has to some extent re-establishedAmerica s reputation for honesty in dealing with German assets.He is said to have insisted on an accounting of all JEIA funds, tohave refused to use them to wipe out the American Army s debt,and to have insisted that we fulfill our pledge to utilize the pro-ceeds of German exports for the importation of food and raw mate-rials for the rehabilitation of Western Germany.But since Mr.Logan shares power with the British he is not in a position to pre-vent Allied control of Germany s foreign trade from being used toprevent German competition with Britain in the world market.The Germans consider JEIA to be a gigantic Anglo-Americancommercial monopoly which prevents Germany from trading with 260 THE HIGH COST OF VENGEANCEher natural markets and suppliers and forces her to buy and sellin the British Empire and the United States.German exporters andimporters under the foreign trade monopoly established by Britainand America are in fact only auxiliary agencies of an Anglo-Ameri-can monopoly of German trade.The Germans naturally consider that Anglo-American controlof their foreign trade must preclude any possibility of their becom-ing self-supporting, and say that whenever they can offer goods atlower prices than the British, they are refused the right to exportthem.They also complain that since they are not permitted tosend their own commercial representatives abroad, they have nopossibility of developing export possibilities wherever Germanscompete with their conquerors
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