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Excluded from these allotments were importers of goods Germany must have: wool, cotton, hides, furs, basic metals. But these importers are under direct Government supervision. Hence, last week's reductions at once set up a counter-wall against the boycott and tightened Nazidom's hold on private German business.
Red Wall, Last week a mammoth trial of in Communists on charges of "preparing to commit high treason,'' opened at Breslau. Soviet Russia's mounting resentment against Nazi abuse of Communists and Communism was reflected to a certain extent in the total of Russian imports from Germany in the first quarter of 1934: 21,000,000 marks as against 181,000,000 marks for the same period in 1932.
Debt Wall, Bound up inside Germany are long and medium-term private debts owed to foreign creditors of some 8,000,000,000 marks ($3,140,000,000 at current exchange) and an annual interest bill of about $195,000,000. Last week one of Germany's smartest bargainers, Reichsbank President Dr. Hjalmar Schacht, lowered the debt wall again at the end of a month-long haggle with representatives of Germany's U. S., British. French, Swedish, Dutch and Swiss creditors.
Dr. Schacht had boldly asked for a complete moratorium. He got one for six months, and considerable savings afterwards. He had tried desperately but failed dismally to bring the Dawes and Young plan loans into the haggle.
The new formula gives German creditors the choice of: 1) funding their due bonds at full value; 2) cashing them at 40% of the coupon value (subject to Germany's ability to pay anything at all), or 3) holding the original coupons with all original rights and the dim hope of cashing them some day.
Creditors' victories: 1) The funding bonds will be issued in the currency of the holder; 2) the German Government guarantees eventual payment in that currency.
Dr. Schacht's victories: 1) the 40% cash value figure was just half what U. S. creditors first demanded: 2) the creditors recognized the principle that Germany wants to pay but cannot.
Thoroughly dissatisfied, the representatives left for home to get the necessary approval of the creditors. President J. Reuben Clark of the Foreign Bondholders Protective Council called the new formula "not fair, just and equitable to the American bondholders," charged that certain European governments still had a chance to bargain for full servicing on their bonds. The Swiss and Dutch creditors flatly rejected the formula.
The German Press caught Dr. Schacht's cue and straightway began to howl against the exclusion of the Dawes and Young loans from the agreement and in favor of stopping the 'immoral" payments entirely after July 1.