The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1922-08-15
TOPEKA STATE JOURNAL
Information Bureau
FREDERIC ,. HAsKIN. Director.
Washington. d. @.
GERMAN COMPETITION NOT
FEARED

much has been said to the business
men of the United States and other
countries about the bugbear of Ger
man competition that the department
Of commerce has made a special in
vestigation OF the subject. 1t has led
to the conclusion that there is moth
ing to fear from Germany in the for
eign trade field.
The basis of this conclusion is the
high cost of production of German
goods which compete with American
goods in the worlds markets. The
facts assembled by the American gov
eminent make it clear that stories
of extremely low costs of production
in Germany are erroneous and that
the American workman'S job is not
menaced by the competition of the
Teuton.
What makes the German cost of
production appear low and what has
enabled Germany to make show of
competing with the United States,
Great Britain ind other foreign trad
erS with indications of success, is the
fact that German industry is subsi-
died in various ways These sub
sidiSI. 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 pro-
duetion cannot be Iessened by such
bookkeeping legerdemain. If the
German government is subsidizing in
dustries in order that they may pro-
duce cheaply. Germany is none the
less paying the cost because the tax
payers must furnish the funds with
which to pay the subsidy.
The railways of Germany have been
subsidized to the extent of 35,000,-
100000 marks a year. This has meant
that the government has paid to the
railroads what overwise the industries
would have had to pay, adding the
amount to the cost of production of
the products. Nearly 100000, 900
marks have been paid in the last year
as subsidy to the telephones and tele-
graphs. Here again the industries are
spared a cost by virtue of its assump-
aion by the government.
Public utilities have received bill
lions 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
subsidy to the industries producing
German goods has been the body of
laws limiting the prices of goods for
internal 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
strictive laws which have forbidden
landlords to increase rents, the pro-
portion Of weekly earnings paid for
rent has decreased materially.
1T will be seen that If a manufac-
turer's 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 upon the government
authorities to permit increases in
hut N OF with
statement that to increase rents would
mean a general increase of wages and
a consequent increase in the cost of
production OF German goods.
1t is recognized that these condi-
lions cannot long obtain. The tax
payers and the landlords will weary
of paying large percentage indirectly
of the cost of production of the Ger
man factories. The German people
have stood solidly together in attempt
enable Germany to re-enter the for
eign trade in such a way as to under
sell the United States and other COM
petitors, but 1t is apparent that the
farce cannot continue indefinitely.
The government experts who made
the investigation of German produce
ton costs assert that the situation is
based on so false an economic struc
ture that 1t must collapse soon and
that the longer the subsidized indus
tries operate. the sharper will be the
reaction. One special report described
the hectic prosperity which these fic-
low production costs stimu-
lated as a Catastrophe BOOM"
Value of Marks Important
The value of the German mark has
been falling rapidly in international
exchange. but it has not fallen so
repidly within Germany. This means
that Germany has enjoyed foreign
trade for another fictitious reason.
De-
could, with small amount of their
own money. pay substantial sums in
marks. The marks are worth more in
Germany than anywhere else. There
fore it has been desirable for Tor
to buy German goods and de-
sirable for German industries to con-
tinue this trade. But it is impossible
TO maintain a one-way trade. Ger
many must buy as we'll as sell and in
buying the tables are turned. While
the declining mark favoFs sales of
German goods, it make 1t more and
more expensive for Germany to buy.
The process still is going on. but it
shows signs of the inevitable explosion
which will bring sorry end to the |
whole cycle. This collapse will drive |
Germany out of the worlds markets, !
n the opinion Of the government. ex- |
Derts. She will be able to re-enter
until she passes thru trying period
If deflation and readjustment which !
Will bankrupt thousands. She has no |
financial strength to Withstand the |
ihock. 1t is obvious that no one in |
Germany is saving money, for saving |
appears to be the most Grant folly. I
T a man has ten marks which by to- |
morrow will have the purchasing i
power of only nine, because of the |
progressive depreciation, he has no in |
lucement to save. Instead, he is |
lager to turn his ten marks into some |
angible article while he can.
1t is reported that some Germans |
lave bought as many as twenty over |
oats. suits of clothes, and other simi- |
ar mmod ties for the purpose of |
,etting rid of their marks before they |
lepreciate. The life savings in marks ]
Il pre-war workmen would not sup |
,ort him for a month, perhaps not a 1