February t, tqt/ 
LAND & WATER 
II 
sufticient attention to practical considerations. Fallacious 
as the argument is, it contains a certain amount of truth. 
<~.ermany has herself realized the position in which she 
would be placed if her imports were entiiely unrestricted, 
and she has consequently prohibited the importation of 
various articles, mainly those that would be classed as 
" luxuries." The more the balance of trade is against 
her, the lower would be the value of the mark in the 
countries from which she is obtaining the goods, and the 
\alue of the mark is at once the external sign of an adverse 
balance and of declining credit. 
It is interesting to notice in this connection some of the 
measures which she has taken to try and redress this 
balance in her favour. Only in the last few days all 
imports into ( Germany of goods from neutral countries 
have been placed mider the control of a special govern- 
ment department, and it maybe assumed that the object of 
this new department is to raise the value of the mark 
in the adjoining countries. (Germany has besides tried to 
reduce the cost to herself of what, if her people are to 
live and she is to have the means of carrying on the war, 
she is bound to import. With this in view she lias in 
the various countries adjoining her establislied as buying- 
a,gencies branches of the Zeutrale ICinkauf (iesellschaft 
(more generally known as the Z.K.(i.). Bv means nf 
these agencies she is able to restrict the conijietition of 
one buyer against another, and by creating what may b(^ 
<'.alled a buyer's monopoly, she is able not onlvto organise 
the purchase of the foodstuffs and other desirable goods 
that the market can proxide, but also to depress the 
prices of what she buys and so diminish the amount of 
iier indebtedness. 
Germany has also taken steps to enhance the value of 
the goods exported in exchange. Exporters have been 
comj)elled to_ raise very considerably the prices of the 
goods they are offering, and they have besides been 
obliged to quote the prices of their goods not in marks, 
but in kroner, florins or francs, as the case may be, thus ' 
avoiding the loss resulting from payment in their own 
depreciated currency. 
So far then as the value of the mark is dependent upon 
the balance which Germany is able to maintain between 
the value of \vhat she imports and the value of what she 
exports, it has been shown that on the debit side of the 
account must be entered all that Germany can persuade 
her neighbours to supply her with in the way of food, 
feeding-stuffs for cattle,, fertilisers for her "soil, raw 
materials of every kind for her manufactures, and articles 
partly or completely finished. ]Vluch as she would like 
to reduce this debit to the smallest possible dimensions, 
her needs are so great and so urgent that she is boimd to 
strain every nerve, to exert various forms of pressure 
on her neighbours, and to resort to everv possible 
stratagem in order to increase her imports', with the 
result of ever increasing her indebtedness to the various 
neutral States from which she can draw supplies. The 
only way apparently in whi(ii she can diminish the debit 
side of the account is by rigidly excluding all luxuries 
and by reducing in every possible way the cost of the 
imported goods. That the debit side of the account is 
not larger is due, not to Germany's moderation or self- 
denial in the matter of imports, 'but to the pressure of 
our blockade. .Month by month the amount that Ger- 
many is able to import diminishes, diminishing it is true 
at the same time her indebtedness, but depriving her of 
the supplies without which she is sorely crippled. 
The Credit Side 
It will thus be readily seen that if Germany could 
mamtam licr exports to the countries surrounding her, 
the adverse trade balance against her would by degrees 
be wiped out and the exchanges tend more and more to 
return to normal conditions. But such has not proved 
to be the case, and the explanation will be found in the 
credit side of the account to which our attention must 
now be directed. On the credit side must be entered the 
goods she exports, the securities she is able to sell in 
neutral countries, the gold she can from time to time part 
with, and even the jewels which the Gcrm.ui people have 
sent abroad for realisation. 
The ntost striking feature at the present moment on 
this credit side of the account is the reduction in the 
amount or, r,orman\''< exports wliirli ma\- be regarded 
as one of the main causes of the continued depreciation 
of the mark, and at the same time as a valuable means 
of gauging Germany's economic position as a whole. It 
is only natural that she should try to conceal or to explain 
away as far as possible this diminution of her exports. 
She would like it to be supposed that it is due entirely 
to the stringency of the blockade wliicll prevents her 
supplying her usual markets overseas. " We cannht 
pay for om* imports with our exports," she would sa\', 
" because the blockade has cut us off from oiu" many 
customers in Asia and America." But th(^ blockade has 
been effecti\-e in this direction practically since the 
beginning of the war, so that an explanation must be 
found elsewhere for the falling off of her exports in the 
last few montlis. The real cause is to be found in the 
rapid decay of Germany's productive capacity. 
The production of goods for export in\ol\es : 
(a) An adequate supply of raw material, much of wliich 
has to be. imported, but, which owing to 'the blockade 
cannot now be imported. 
(b) Labour for the production of sncli raw material as 
riprmany lierself can ])rovifl('. 
(i:) Lnbour for the extractifiu of (1m> conl which ji.is iu 
the past two years helped to swell considerably the vfihune 
of hor exports, and wl)ich besides is necessary for Iceeping 
Iter factoricii and her railways going, 
(d) l.ahonr for the jiroduction of manufactured articles. 
The maintenance of her exports, therefore, may bo 
said to be depr'udent on two main factors — raw material 
and labom-. The latter of these is perhaps the one that 
it is most important to enlarge upon here. The man- 
power a\-ailable for maintaining exports .is limited by two 
main considerations : 
(i) The total man-power existing in the country. 
(2) The amount ol' man-powor licing utilised for other 
purposes. 
Roiighly speaking, the ]nan-power of Germany is being 
utilised in four ways : 
fa) In meeting the requirements of her navv and in main- 
taining at fullest jiossiblc strength lier arnues distributed 
on the various fronts, in depots, on lines of communication, 
on neutral frontiers. 
(h) In su]>plying the needs of army and navy in'thc maltcr 
of munitions, food, and clothing. 
(c) In supplj'ing the needs of the civil population. 
(d) In the production of goods for export. 
It is e\ident then that the labour power available for 
maintaining the balance of Germany's foreign trade must 
be regarded as a residue left over when the three first 
needs have been satisfied. Losses in the field must be 
made good, and more than made good as new- campaigns 
have to be undertaken. The demand for munitions is 
an ever-increasing one. For both of these purposes man- 
power must be withdrawn from the only possible sources 
-the men engaged in supplying the needs of civilians 
and those occupied in manufacturing for customers in 
the adjoining neutral countries. That this withdrawal 
of men is in fact taking place, and that exports are iu 
consequence falling off, can easily be demonstrated. 
By a recent law all the labour power' of the country, both 
male and female, was conscripted. ^Vomen ha\c taken 
the place ol men in e\-ery held of labour, and e\-en in its 
most arduous forms. The shortage of men has seriously 
affected the coal supply. The amount available for 
export has been veiy much reduced. The coal from the 
("rerman and Belgian coalfields which was exported frc^ely 
at earlier stages of the war, has now diminished in supply 
and the export cannot be maintained. Railway transport 
also is seriously hampered by lack of coal. 
All this tends to point to one very definite conclusion — 
the fall of the mark is largely due to the falling off of 
Germany's exports. This falling off of exports is itself 
a consequence of the shortage of man-power. Military 
losses and requirements are telling on industrial capacity, 
and it can only be a question of time before the point 
will be reached at which industrj' cannot be squeezed 
any longer, and the armies will be unable to maintain 
their present strength. 
Thcr(^ is another aspect of the case which if: is important 
not to overlook. The value of an\-thing is' very largely 
affected by the extent to which it is in demand. As tlio 
demand for anything increa.ses, the value lend-^ to rise; 
as the demand fliminishes the value tends to fall. Thi'* 
