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In the construction of locomotives, a field monopolized by the Borsig and Henschel combines, output at the height of the boom was only 5 per cent of capacity. Later, in World War II, when Henschel specialized in "Tiger" tanks and 88-millimeter guns, the formerly idle capacity came into its own. Unfortunately, the bondholders who put up the money for these increases in heavy industrial capacity never got the benefit of the supposed "strength" and "soundness" of the companies. The low output in relation to the large capacity meant a huge unpaid debt to foreign investors who had bought the bonds.

The extra costs of the long overseas haul were offset by German government subsidies and indemnities. The purpose of this German strategy was destined to become clearer as the postwar adjustments of the 1920's unfolded. During the first years after the war, when coal was scarce in Europe, the German coal producers held the whip hand over France. Since the cost of coal accounted for three fifths of the cost of French pig iron, whoever controlled the cost of coal could control the competitive fate of French iron and steel.

J. O. Outwater, president of the Steel Export Association, and William B. Todd, who were to work together with the British group through Mr. Ian F. L. Elliott, representative of Sir Andrew Duncan's British Iron and Steel Federation. Mr. Elliott was to turn up several years later as a representative of the United States on the international control authority for the German Ruhr; but at the time his was just one name among many. More important to us at the moment was the tie-in between Luxembourg and Germany.

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All Honorable Men (New World Order and the rise of Hitler) by James Stewart Martin


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