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POLAND'S ECONOMIC IMPASSE1

BY E. VARGA

[THIS article was written a few days quickly accommodated themselves to before Pilsudski's coup d'état.]

POLAND'S business depression, which has now lasted without a break for two years, has become increasingly serious during the last three months. Its present phase has several peculiar features. During the earlier stages of the crisis the stagnant market for Polish manufactures, and the unemployment that accompanied it, were ascribed to the stabilization of the currency. But to-day stabilization is a thing of the past. After a period of minor fluctuations late in March, the dollar suddenly began to mount higher during April, until it reached ten and eleven zloty, which is equivalent to a depreciation of fifty per cent in the value of the latter unit. Remarkably enough, however, this fall in the value of the money did not bring with it the usual symptoms of inflation, for it was not the result of an increase in the circulating medium. In fact, between December 1925 and March of the present year the total circulation of bank notes and treasury bills, taken together, actually decreased in round numbers from 815 million zloty to 773 million zloty.

Consequently we are in the presence of acute depreciation without an increase in the circulating medium. The dollar is rising, although there is a great scarcity of local currency. On the other hand, however, prices have

1 From Die Rote Fahne (Berlin official Communist daily), May 16

the fall of the zloty. In other words, Poland simultaneously exhibits the contradictory symptoms of a stabilization crisis with a shortage of capital and credit, and of an inflation crisis with a sudden rise of prices.

Foreign exchange has gone to pieces, although a favorable trade balance has been secured by increasing exports and ruthlessly discouraging imports. Between July 1925 and February 1926 imports declined from 173 million zloty to 69 million zloty, while exports simultaneously increased from 87 million zloty to 131 million zloty.

As the result of the high prices at home, caused by the rapid adjustment of quotations to the foreign rating of the zloty, plus the lack of a circulating medium, Polish manufacturers are unable to compete in foreign markets. The increase in exports, consequently, is due to larger shipments abroad of agricultural products. In fact, so much grain has been sent out of the country that a serious food shortage is feared before the next harvest is gathered. On the other hand, the Government's Draconic measures to curtail purchases abroad have reduced the imports, not only of luxuries, but also of essential raw materials, so that Polish manufacturers are seriously embarrassed for want of metals, wool, and cotton. This applies to industries employing iron and steel, and in a higher degree to the textile manufacture. In fact, so serious is the situation of the spinners that several firms have migrated to other

countries. Some twenty of these, though mostly smaller enterprises, have removed to Rumania, taking their skilled operatives with them; and we now hear of proposals to move several factories from Yugoslavia. Considerable sales of idle textile machinery have been made by local spinners and weavers to French manufacturers, and also to Italian firms. Simultaneously the title to other factories is passing to foreigners. Already one of the largest woolen mills in Lodz is in the hands of its foreign creditors, to whom its owners were hopelessly indebted for raw materials.

As a result of this industrial crisis unemployment is mounting rapidly. The number of idle workers officially registered increased between November 1925 and March 1926 from 219,000 to 354,000, which indicates that about four industrial operatives out of every ten are without a job. This does not tell the whole story, however, for more than half of the people nominally employed are working short time. As a result, riots of the unemployed, some of which are attended by bloodshed, occur almost daily; for only a part of those in enforced idleness are on the dole. Since Poland has a favorable trade balance, and since there has been no inflation of the currency, the fall of the zloty can be explained only by the hopeless condition of the public finances and the failure of the Government to secure loans abroad. The Budget is in a deplorable state, in spite of strenuous efforts to economize. Although, according to official figures, public expenditures have been cut down within three months from 217 million zloty to 122

million zloty, the revenues have shrunk during the same period from 181 million zloty to 114 million zloty. The Treasury is absolutely empty, and it is a serious problem to find money to pay the salaries of the Government's employees.

Negotiations between the Polski Bank and an American consortium for a loan guaranteed by the tobacco monopoly have fallen through. Professor Kemmerer, to be sure, was most optimistic as to Poland's financial future, but his opinion extracted no money from the pockets of doubtful bankers. Consequently the supply of foreign bills in the Polish Central Bank is completely exhausted. Since Polish exporters naturally prefer under present conditions to keep most of the proceeds from their shipments on deposit abroad, the demand for such bills inevitably exceeds the supply. Eager bidding for them has therefore raised their price and depressed correspondingly the value of the zloty. Last February the Polish Bank pledged its gold reserves to the amount of a million pounds sterling to the Bank of England in order to satisfy the exigent demand for foreign bills. The Government hoped by this measure to peg the zloty at 7.30 to the dollar, which was its value at that date; but the effort proved futile.

Consequently Poland's Poland's economic situation is extremely precarious. It is no exaggeration to say that her business mechanism is completely out of gear. Her experience certainly affords an interesting object lesson for other countries that are trying to stabilize their currency upon a gold basis.

BISECTING THE ARCTIC 1

BY F. RAMM

[THIS is a translation of a private telegram to Neue Zürcher Zeitung, dated, 'On board the Norge in the vicinity of Nome, May 14."]

ON Thursday morning at 8.55 A.M. the Norge rose with a cargo of twelve tons, including fuel, from King's Bay, Spitzbergen. Before we left Amsterdam Island we corrected our compass by solar observations and wireless signals, so that, in order to facilitate our later radiogonometric tests, we might follow close to the meridian that passes through the King's Bay wireless station. We navigated through broad sunshine except for the last hour before we reached the Pole. This part of our journey offered nothing of especial interest, since all the land we sighted had already been flown over by the Amundsen-Ellsworth expedition last year. Our course was constantly regulated by radiogonometric checks, and by observations of longitude whenever the sun was in a favorable position.

By half-past two next morning we were able to ascertain by a successful solar observation that we had arrived over the Pole. Our vessel descended to a lower elevation. We throttled down the motors, and Amundsen, Ellsworth, and Nobile threw over the national flags of their respective countries. These were attached to sharp-pointed steel staffs, which stuck upright in the ice and remained there. During this ceremony the crew of the Norge stood

1 From Neue Zürcher Zeitung (Swiss Liberal Republican daily), May 17

with bared heads. The fluttering banners on the glistening ice below made a wonderful picture.

We circled over the Pole and turned in the direction of Point Barrow. Everyone was on the alert to discover land, for we were crossing a tract of the globe's surface more than twelve hundred miles long which had never before been seen by human eye. About seven o'clock we reached the Ice Pole, which is regarded as the most difficult point of access on the earth's surface, and shook hands joyously over our achievement.

Soon afterward a dense fog compelled us to ascend to a great elevation, but frequent apertures in the cloud blanket enabled us to see large stretches beneath. We were unable to make out any land. Heavy clouds gathered above us, and gradually sank down until they mingled with the fog below, compelling us to continue blindly through the mist.

This was the beginning of the most anxious part of our journey. We sank to a lower elevation, but encountered a snowstorm. When we ascended to get out of that, frost gathered on the cordage and outer metal portions of the airship and rapidly accumulated into a thick coating of ice. The cloud-bank was so high that we could not ascend above it without too great a sacrifice of gas. We kept experimenting, however, with different altitudes, keeping a sharp eye on the temperature and the ice accumulation, but found no level where we escaped this impediment

entirely, and so continued on our course as best we could. The ice that had gathered on our cordage and on the outside of the motor gondolas fell off in pieces, striking the propellers, which batted it against the vessel's side. Other ice, which had formed on the propellers themselves, was likewise hurled in all directions. Consequently we passed several hours of extreme anxiety, during which the whole crew was constantly on the watch to repair holes in the outer skin and the gas bags. Luckily the gas bags had been made extra strong in contemplation of this very possibility; but we could never be sure that they would hold out. We no longer scanned the pack ice beneath us with purely Plantonic feelings, but with a lively appreciation of the fact that it might become our only highway to safety. Finally atmospheric conditions improved somewhat and we were able to take a course beneath the clouds which was comparatively free from moisture.

Our magnetic compass exhibited erratic variations because the deviation kept changing. Now and then, however, the sun would pierce the clouds and enable us to take an observation. Our sun compass, which was fastened outside the gondola, had become a block of ice and was useless. Just as we crossed the Alaska coast a little west of Point Barrow, however, we were able to determine a north-and-south course by solar observations; but we did not know our latitude, because the fog had prevented our seeing the earth below to estimate our speed. Consequently, about forty-eight hours after leaving King's Bay, we took a course approximately parallel with the Alaska coast. A rising wind from behind increased our speed, but it was very misty, and the deep snow concealed the contour of the land; so we rose to a higher elevation, hoping to sight more favor

able atmospheric conditions farther south. Nothing resulted from this, and we later descended closer to the ground, although at some risk of driving headlong into a mountain-side through the dense fog.

We continued navigating more or less blindly in this manner until finally a lucky solar observation indicated that we were directly over Bering Strait. We now struck a moist air current which deposited ice rapidly on the outer envelope of the airship. This was a much greater danger than it had been a few hours before, because we had already exhausted our patching materials.

It was therefore decided to land at the first opportunity. We headed directly toward the east, but soon discovered that this carried us over open water and then across an ice field. Conditions seemed no better farther south. We therefore steered a little more to the northward, where ice conditions seemed to be better, but we made slow progress.

During the last night of our journey we signaled constantly, hoping to ascertain our position from some wireless station, but in vain. Finally we found ourselves again over land, and saw several Eskimo huts. We attempted to descend in order to inquire our position, but violent squalls prevented. Thereupon we ascended through the clouds to an elevation where we could ascertain our latitude by a solar observation. In doing so we drifted a considerable distance inland, so that we required a full hour to regain the coast after descending to a lower level.

The fog was now exceedingly dense, but we began to hear the wireless apparatus at Nome receiving signals from some other station, and were able to ascertain our approximate position from that. Conjecturing that we were about over Cape Prince of Wales, we turned northwest, following the coast

line; but the wind from the mountains 'was exceedingly violent and tossed us about incessantly, so that our barograph needle danced around like that of a seismograph during an earthquake. Again we lost our exact position, for the violent tossing of the vessel did not permit us to descend low enough to see the earth through the mist. As the wind continued to increase in force, we finally decided to land at Teller and not to try to reach Nome, as the terrain seemed to be fairly good at the former point. But we all knew what it meant to moor our vessel in such weather without assistance from the earth, and were prepared for the worst.

Our first supper in Teller was an unforgettable event. The hot coffee tasted like ambrosia, for every member of the Norge's crew had suffered intensely from the cold for hours at a time, especially when the fog was the worst and the air was filled with moisture. The moment we opened a cabin window to make an observation a dank, chill mist would pour in and fill the cabin, making the work of the observers, who had to manipulate their instruments with bare hands, exceedingly difficult.

No sooner was our ship safely on land than we tried to get into connection with the wireless station at Nome, in order to notify the world that we were safe. But the Teller station had not been working for two years, and we signaled for several hours without result. It was not until we had repaired our own sending apparatus, twentyfour hours later, that we established a connection. It was rather exciting during the interval to keep picking up signals calling for the Norge, showing that we were supposed to be drifting over the ocean farther south.

Amundsen, Ellsworth, and Wisting immediately left Teller, and will await

the other members of the expedition at Nome. We leave as soon as the airship is completely dismantled. Amundsen and his two companions drove out over the ice with dog sleds for more than twenty miles before they reached open water. A big three-ton motor boat which is to take them to Nome had to be hauled the same distance by dog sleds.

During our flight every member of the crew was so busy with his duties, navigating, steering, and attending to the wireless and the motors, that no one had time to think of danger. We now realize how narrowly we escaped destruction, and how largely we owe our safety to a combination of good luck and wise prevision. Probably we were in greatest danger when we were crossing Alaska at a low altitude in a violent northwestern storm and nearly lost our course. The big ship was carried along only one hundred or one hundred and fifty feet above the ground at a rate of nearly sixty miles an hour. The ice- and snow-covered landscape flew past us as rapidly as it does through the windows of an express train.

Before Amundsen left us, every member of the expedition offered him his services for a new exploration. Our leader answered: 'When I was a young man I made up my mind to travel over the whole world, to reach both Poles, and to make the Northwestern and the Northeastern Passages. I have done all that. Another generation can now take a hand.'

We have been hard at work taking the vessel to pieces and packing it in boxes to be shipped back to Rome, where it will be reassembled. It received only minor injuries during the landing, and can easily be rebuilt. But the first day was spent resting up from our seventy-one hours of arduous labor.

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