The New York herald., 1921-07-31

purely by weight. Others were COM
puted on the sliding scale of the Ger
man paper mark, without always dis
tinguishing between paper and gold
values.
Germany Itself Injured.
This want of common policy some
times had disastrous consequences for
the Germans themselves. The Germans
prepared statistics to prove that the
country has favorable balance of
trade, to make Germany seem good
investment to American bankers. This
Vas easy to prove when imports were
reckoned in gold marks and exports in
paper ones. and when one mark was
taken to equal another one, no matter
of what sort.
But these same fantastical calcula-
tions were taken to the financial confer
ence in Brussels last December Here
the Germans intended to show-and this
contention was nearer the facts-that
German business was In a bad way
and that the country needed nursing.
rather than despoiling But they pro-
duced the deceptive optimistic figures to
prove their pessimistic contention. AS
late as the conference of London, one
of the foremost German experts said he
was going to the conference without
knowing what Germany is producing or
could be expected to produce in the next
five or twenty years.
Feeling about with cane in the
dark is therefore the common way of
drawing conclusions about German in
dustry to-day. When there are un-
wholesome factors like the printing Of
billions of paper marks-a currency
which. like alcohol. puts momentary
glow into the German Industrial body.
but which promises q ghastly morning
after. predictions become hazardous.
The recovery of German industry since
the armstice has been remarkable, but
in no branch is shown a vigor exceeding
that before the war. Application of the
peace treaty reduces German territory,
population and coal about ten per cent.
By the transfer Of Lorraine to France
Germany lost about three-fourths Of its
iron supply.
Trade Balance Wiped Out.
Before the war Germany had a
slightly passive balance of trade made
up by German shipping and returns from
foreign investments These have been
wiped out. Now Germany has an un-
favorable balance of about 100000. 600
gold marks annually despite all efforts at
rigid economy.
German after war exports can be
divided into two categories both as to
class and vigor-wares made from home
materials and wares made with imported
materials. Trade in wares made with
home materials has fiourished and Is
bound to continue to do so as long as
Germany has cheap labor. Such goods
are COAL iron and It's by products, potash.
glass and objects Of wood.
Germany also keeps similar freedom
in wares requiring high technical finish
where the value of the raw materials
they contain Is one Of the smallest items.
This would comprise art porcelains. SCI
entific instruments, optical wares, laces
and similar articles Of luxury.
Goods manufactured from imported
materials leave much opportunity for
stabilization Of present prices, as Ger
many must here pay high prices In de-
preciated currency for raw materials.
This makes the cost Of the finished ar
ticles much higher and less adapted to
compete with foreign wares produced
under fewer handicaps. In this cate
CORY textiles are most conspicuous.
There Is a constantly appearing ele-
ment in costs that tends to offset the
initial advantage Germany enjoys in
cheap skilled labor. This item comprises
rising taxation and trebled and con-
stantly increasing transportation
charges.
Huge Combines r1ourish.
Coal. chemical byproducts, electro
technical wares and iron and steel have
been grouped into a series of combines
in Germany which makes this cartella-
ton the most powerful on the Continent.
These trusts are interlocking. The own
ers have organized their factories hori-
zontally and perpendicularly to reduce
both waste motion and taxation. They
have control OF the domestic market In
price pooling cartels and agree on their
foreign sale prices.
The Germans making exception for
the coal stoppage in Upper Silesia, are
producing more coal than they did be-
fore the war. Germany sent 22.000.000
tons of coal to the account of repara-
tions to France, upsetting the European
coal market. In addition. Germany pro-
duced more than enough coal to meet
the demands Of neighboring states.
Although they lost their iron ore, the
Germans were at no immediate disad-
vantage here because they had large
stocks at hand and started buying from
the French when the bottom had fallen
out of the iron market so that they could
buy at ridiculously low prices
Ihen came the general industrial de-
preston. The German coal exporters
felt the pinch first. They found that tn e
French and Belgians were competing in
neutral markets against them with their
own coal.
The iron and steel people had orders
ahead carrying them over until spring
for iron and steel. They were also less
directly hit by outside stagnat!on be-
cause they could underbid most of their
rivals. Since February, however when
the Belgian crisis began, the Germans
find the Belgians are underbidding them
in many iron and steel wares.
Customs BARRIERS Erected.
Another factor enters which has been
a serious handicap for the German iron
and steel industries. Countries with
similar Industries began to feel the
effects Of German so-called "valuta
dumping" and put up customs barriers.
The British put radical stop to i'm
port of German wares with the pro-
visional so per cent. duty, modified now
to 26 per cent. Other allied countries.
including Czechoslovakia, took similar
measures.
The application of the sanctions in
February on the right bank Of the
Rhine in the heart OF the iron and coal
regions put a mass of petty obstacles In
the way of production. Factories belong
ing to the same firm were on different
sides of the new customs line. The Gel
senkirchen works for example could not
exchange their iron and steel metals
without aaipo fbroiiub all manner of