A Gloomy Outlook For those who attempt to read the
oracle of internal developments in Germany, however, the most interesting . parts of Dr. Schacht's speech were those which referred to the economic policy of which he is dictator. They were hardly cheerful. " Again and again we must tell the German people that they do not live in a land which flows with milk and honey " ; wage increases were quite impossible ; indeed, there were to be even more rigorous measures of economic conscription. All this is strange language for half-way through the third of the Farces promised low years. Dr. Schacht gave open expression to the alarm which has been rapidly spreading among _bankers and economists about the swelling size of the Government's debt. He was careful to condemn inflation as a suicidal policy, but he had to admit that the vast expenses of the re-armament programme were being • entirely met by the creation of short-term debt. Indeed, a credit inflation is well under way, as attested by the continued rise of prices. Dr. Schacht has shown himself a consummate technician, but by all the indications he is almost at the point where he must either refuse to finance further re-armament or else adopt more obviously inflationary methods. The choice will not be easy—if, indeed, Dr. Schacht has any choice:
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