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more than twenty millions in all, creates the impression in the world at largethat we are rolling in money. Not a single one of the victorious states hasembarked upon such an undertaking. That Herr Adenauer (chief burgomasterof Cologne) has built a marvelous hall, and boasts that it containsthe greatest organ in the world, produces the same effect. . . . The PressExhibition in Cologne was regarded as the most luxurious affair of its kindthat had ever been organized. Frankfort-on-Main was left with a deficit oftwo and a half million marks as a result of its Music Exhibition. Dresdenbuilds a Museum of Hygiene with the help of a Reich subsidy. . . . Pleasetell me what I am to say to the representatives of foreign powers whenthey tell me of these things awakening the impression that Germany wonrather than lost the war. I have no longer any answer to give to thesereproaches.This government spending stimulated private enterprise. Andprivate corporations began to borrow too. Industrial plants, modernstores, mining properties, railroads and utilities, all were built ormodernized with funds loaned by the banks. But the banks becameoverextended. The ratio of bank capital to deposits, which beforethe war had been four or five to one, became fifteen and twenty toone. Nevertheless, to the outside world here was the spectacle of aresurgent Germany astonishing her neighbors with the swiftness ofher recovery. After all, the debt theory was working. Many nowforget that while rich America was rollicking in the lush glory ofthe Coolidge New Era, Germany was basking in the sunlight of herrepublican new deal.The magic of the "new economics" worked for a little while—forñve years. But in the end the whole thing cracked up. But theapostles of the new economics said their theory had not had a soundtest. The trouble lay, they said, with the great external debt imposedby reparations. In a sense this is true. Germany was forcedto pay heavy reparation sums to her conquerors. But actually littleif any of it came out of her internal revenues. From September1924 to July 1931 she paid out 10,821,000,000 marks. But the moneyto make these payments she borrowed from abroad. Loans fromabroad totaled, according to Dr. Stolper, some 20 billion marks, orabout 18 billions, according to Dr. Angell. In addition around fivebillion additional marks were invested in German industry by96