With the near approach of the Stillhaltung conference in a few weeks to determine the future of the moratorium on repayment of Germany's short term obligations, the economic prostration of Germany is revealed more and more clearly by a nation disarmingly frank in dealing with its multitudinous creditors, particularly of the Western Hemisphere. Dr. Hjalmar Schacht, Governor of the Reichsbank, is never at a loss to deal with the financial situation, and has seen to it that Germany shall secure her place among debtor nations as a country on the very verge of financial catastrophe, one which must be handled with kid gloves by its creditors if anything is to be salvaged from the wreck.

Typical of the window dressing methods which have been brought to such a high degree of perfection by the wily Schacht in convincing Germany's creditors of here incipient bankruptcy, is the old reliable plea of a dearth of god wherewith to pay off the adverse balance of trade which is claimed as the root of her financial troubles. Now, no one can deny that Germany, so far as her export situation is concerned, is really in a bad way; but this is the ostensible reason, loud-pedalled mainly for foreign consumption, for her lack of the yellow metal, and not to be taken without several large grains of salt. Behind her poverty may be discerned foreign balances convertible into gold nestling coyly in vaults in New York and elsewhere, though, it must be confessed hardly collecting tarnish there. In support of this view may be adduced the seeming abundance of the wherewithal to purchase back her foreign bonds previously depressed first, by partially substituting scrip for gold payment on interest, and then defaulting entirely upon maturity of the securities.

With all due allowance for the depression which has struck Germany harder than most nations this sequence of events can hardly be said to be a natural outcome of the circumstances but reveals rather the master mind behind Germany's struggles to circumstances but reveals rather the master mind behind Germany's struggles to circumvent Versailles and her creditor nations. The result today has been all that Germany could have desired. In the eyes of the outside world she has managed to place herself in that invulnerable position, a virtually bankrupt debtor, while at home show has managed to appear sufficiently solvent to keep the mark at par and prevent another inflation. It mush be added that the threat of inflation is perhaps her strongest bargaining point, not only in U. S. but in Europe. Should inflation occur, even though moderately, Germany's adverse balance of trade might be changed overnight to a favorable one, mostly at the expense of France, and more particularly of England, which would see nullified the effects of her abandonment of the gold standard which revitalized here industries. Whatever the next few months may reveal in the way of world trade revival, it can safely be predicted that it will not be Germany which will below here horn loudest abroad so long as the hope remains of shaving another dollar from her obligations. WOTAN.