The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1921-12-25

The bug-a-boo about the ability
of German automobile manufactur-
ers to outdistance their American
competitors in the worlds markets
vanishes as soon as distinction Is
made between domestic and export
prices of motor vehicles" states l..
j. Ollier. member of the foreign
trade committee of the National
Automobile Chamber of Commerce.
in a recent interview. Reports
from abroad Indicate that German
factories are well occupied with
domestic orders.
THE. practice of the American
manufacturer is to quote export
prices that are practically the same
as those for motor vehicles sold
domestically. In either case the
prices are based on a uniform cost
of vehicle at factory.
In Germany, however, the pre-
war custom was to quote lower
prices for export trade than for
domestic consumption. Because of
changed economic conditions the
practice is of necessity reversed
now. and motor vehicles for export
must be sold at a considerably
higher price than would be re-
ceived in domestic trade.
Readers, seeing a list Of domes-
tic prices for German motor We
hicles and falling to realize the
difference between these and a.
port prices, come to a hasty con-
clusion that German manufacturers
are sure TO be most formidab BILE
competitors of the American motor
vehicle industry.
"A closer analysis will show Just
the opposite. A typical German au-
tomobile, supposedly OF medium
price, was recently quoted for sale
in that country at 10000 marks
The prevailing exchange rate of
the mark was then 1.3S cents, so
that the domestic price of the We
hicle figured s2.o70 in American
money. This, IL should be remem-
bered, is the equivalent of the
price charged in the domestic trade
in Germany, but not that stipulated
for export.
Since that time the exchange
rate of the mark has deprecated
further, which fact is offset, how
ever, by a practically proportion
ate increase in costs in Germany.
ITO ship this car abroad, appli-
cation according to the Berliner-
Boerse-Courier 343), would FIRST
have to be made for an export per-
NIT. Upon payment of a nominal
fee this would undoubtedly be
granted, but under the stipulation
that the sale be effected in gold
currency and the exchange thus
received made available TO the
Reichsbank.
This monopoly in exchange by
the Reichsbank has a direct rela-
ton to the reparation payments
that must regularly be made to the
allies. By having sole authority to
control transactions in gold cur
rencies, the Reichsbank is afforded
direct access to the money from
which 26 per cent must be obtained
for payment of the indemnities.
Incidentally II is also given certain.
means to bolster up Germany's
credit structure generally by secur-
Ing payments in a stable currency
rather than in money OF which the
value may depreciate considerably
at any moment
"A foreign purchaser would con-
sequently pay for a German auto
mobile a price fixed in a gold cur
rency and Increased sufficiently to
cover the export tax of IS per cent.
Instead Of 5000 as quoted to do
nestle users. the foreign purchaser
would actually pay s2,sOs.2O for a
car Of the type described above.
Judged on the basis of prices for
export rather than for domestic