Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1922-08-15

tition that the department or com
merce has made a special Investigation
of the subject. 1t has led to the con
~clusjon that there is nothing TO rear
from Germany in the foreign 'raue
field.
The basis of this conclusion is the
high cost Of production OF German
goods which compete with American
goods in the worlds markets. Inc
facts assembled by the American '
eminent make it clear that stories OF
extremely low costs of production IN
Germany are and that the
American workman's job is not men
aced BY the competition of the Teuton:
What makes the German cost OF
production appear low and what mas
enabled Germany to make a show OF
competing with the United States.
Great Britain and other foreign traders
with indications of success. is the fact
that German industry is subsidized IN
various ways. These subsidies. 1t is
true, enable certain lines of goods to
be exported at low figures. but in an
economic sense. Germany is the loser
and the actual cost of production can
not be lessened by such bookkeeping
legerdemain. If the German govern
ment is substituting industries in order
that they may produce cheaply, Ger
many is none the less paying the cost.
because the taxpayers must furnish the
funds with which to pay the subsidy.
The railways of Germany have been
subsidized to the extent of 35.OOO,OOO.-
900 marks a year. This has meant the
government has paid to the railroads
what otherwise the industries would
have had to pay, adding the amount
to the cost Of production OF their
products. Nearly 5000. 100000 marks
sidy to the telephones and telegraphs.
Here again the industries are spared
q cost by virtue Of its assumption by
the government.
Public utilities have received billions
in government subsidies and this means
that they have been enabled to charge
lower rates to industries for power.
Save Also In Rents
An extremely important indirect sub
sidy to the industries producing Ger
man goods has been the body of laws
limiting the prices of goods for inter
nal consumption and the rate of house
rents. BY keeping rents down, the
government keeps wages down and.
therefore. contributes to the cheapness
of production. Before the war. the
average German workman paid about
Is per cent of his weekly wages for
house rent Under the restrictive laws
which have forbidden landlords to in
crease rents. the proportion of weekly
earnings paid for rent has decreased
materially.
1t will be seen that if a manufacture
ers workmen have to pay only low
rents. the wages for which they can
afford to work need not be high. There
has been strong pressure from the
landlords to premit increases in rent
but this has been met with the state
ment that TO increase rents would mean
a general increase Of wages and a con
sequent increase in the cost of produc-
ton of German goods.
1t is recognized that these conditions
cannot long obtain. The taxpayers
and the landlords will weary of paying
ia large percentage indirectly of the
cost of production of the German fac
tories. The German people have stood
solidly together in attempting to keer
down production costs and enable Ger
many to re-enter the foreign trade in
such a way as to undersell the United
States and other competitors. but it i,
apparent that the farce cannot con.
time indefinitely.
The government experts who made
the investigation of German production
costs assert that the situation is based
on so false an economic structure tina.
it must collapse soon and that the
longer the subsidized industries oper.
ate. the sharper will be the reaction
One special report described the hectic
prosperity which these fictitiously low
production costs stimulated as a ga
tastrophic boom"
Value of Marks important
The value of the German mark has
been falling rapidly in international ex-
change, but it has not fallen so rapidly
within Germany. This mean that Ger.
many has enjoyed foreign trade for On.
other fictitious reasons. Foreign buy
ers of German goods could. with q
small amount of their own money. pay
substantial sums in marks. The marks
are worth more in Germany than any
where else. Therefore it has been de-
sirable for foreigners to buy German
goods and desirable for German indus.
tries to continue this trade. But i. is
impossible to maintain a one-way
trade. Germany must buy as well as
sell. and in buying the tables are
turned. While the declining mark ia
vors sales of German goods. it makes
it more and more expensive for Ger.
many to buy.
The process still is going on but il
shows signs of the inevitable explosion
which will bring n sorry end to the
whole cycle. This collapse will drive
Germany out of the words markets
in the opinion Of the government ex-
perts. She will be unable to re-enter
until she passes through a trying
period of deflation and readjustmen mi
which will bankrupt thousands. She
has no financial strength TO withstand
the shock. 1t is obvious that no ont
in Germany is saving money. for saving
appears to be the most Grant folly
If a man has 10 marks which by to.
morrow will have the purchasing power
of only nine. because of the progress
sive depreciation. he has no induce
ment to save. Instead. he is eager t.
turn his 10 marks into some tangib,,,
article while he can.
/ 1t is reported that some Germans
have bought as many as 20 overcoats
suits of clothes and other similar
commodities for the purpose of getting
rid Of their marks before they depre
ciate. The life savings in marks o.
pre-war workmen would not supper
him for a month. perhaps not a week
under existing conditions Of depre
ciated currency and high commodit,
jprices.
While Germany is working hard t.
restore her prestige in the foreign