davidaulloa/AmericanStories huggingface dataset:
New-York tribune., 1922-03-19
Cost OF Production

Cost Of production is all clement that
ranks as a vital consideration in the
footing uD Of the return from any bust
ness. 1t is not commonly associated
with money and credit, and yet from
the banking standpoint it is a very real
factor. The manufacturer asccrtains
cost Of production by totaling up what
he pays for his raw material, the
wages distributed to labor, plant de-
probation, general overhead and other
items. and bases his selling price to
Yield a profit accordingly. The bank
ing institution that is soundly admin
lstcred has to follow a similar proce-
durc. In its case the raw material is
money, and the product it sells the
service Of money. or credit.
Banking institutions derive the raw
material with which they work mainly
from Two sources: investors and dc,
positors. Tive investors furnish the
capital with which the business is
started, tho dcpositors tho greater part
OF the working funds. Invested capital
requires q certain return and this
must be figured in the cost of produc-
ton. The important item, however. is
the cost of deposits.
as the start Of the war. banks paid
interest on only relatively small part
OF deposits During the war the ad
vance in interest rates. opening up
new earning possibilities, initiated 2
competition for funds. as represented
by deposits. that gradually broadened
New-York tribune., 1922-03-19
Shoe Men to Meet

The Retail Shoe Dealers of Greater
New York will hold their quarterly
dinner at Offers Restaurant, Thirty
eighth Street and Sixth Avenue, next
Tuesday night.
These dinners are confined strictly
to retailers. Andrew II. Melville, in
charge of the research department for
Vogue, will speak to the retailers on
"lnteresting Things Have Seen in
the Shoe Business"
Mr.. Melville has made survey Of
the situation and is in position to
give the retailers the benefit of his in
vestigations into every phase of the
shoe and leather industry. He has re-
Gently returned from tour Of the
country, where he has been gaining
first hand information Of business
conditions, particularly bearing upon
the shoe industry.
Another feature which will be intro
duccd at this dinner will be the open
forum discussion. This enables the
retailer to discuss his problems over
the round table and has been found to
be tho means OF threshing out prob
lens in manner that cannot be ac-
compliehed in any other way.
New-York tribune., 1922-03-19
Third of Pre-War Total

The value figures are even more
striking. From monthly average i'm
ports of 927, 10000 600 gold marks in 1918,
imports fell to 571 900 900 gold marks
, a month in 1920. and 5000, 900 gold
marks III 1921. Exports meanwhile
declined from S41 600. 900 gold marks
per month in 1913 to $4,000 gold
marks a month in 1910-20 ard 304,-
100000 gold marks IN 1921. In other
words German exports and imports
last year we're little more than one
third Of the pre-war figures.
The failure Of German exports to re-
spond to tie stimulus Of the depreciat-
ing mark exchange in 1921 has been
due to number Of factors, the most
powerful Of which has apparently been
the peculiar economic situation within
Germany itself. That this is the case
may be seen most strikingly by com
psrison OF the two boom periods which
Germany has experienced since the
armistice as result OF Il, depreciating
mark Xchange. The first occurred in
the fall and winter Of 1919-2O. and the
second in the period May December,
1921. The foreign trade statistics FOR
these two periods are given in the ac-
companying table. For better compari-
son with the pre-war figures the stats
tics OF paper marks are converted to
gold basis.
In the carliel. period the mark ex-
change tell from 7.13 cents in July,
1919. to los cents in February, 1920.
The result was q pronounced increase
in both imports aud exports. when
figured III paper marks. But when re-
dueed TO gold basis, imports show
substantial decline, from 1861 900 900
gold marks in July. 1919. TO 269 100000
zo.d marks in February. 1920. Exports,
however, show on the whole a substzn-
tial increase. This is displayed most
strikingly by the monthly statistics
Of the balance Of trade From an ex-
cess Of imports OF 89O,000,00O gold
marks in july 1919, tire unfavorabie
balance was reduced to 100000 gold
period o. depreciating mark exchange,
therefore, the behavior of the foreign
trade bore out the expectation OF eco
norljc theory. Exports were stimulated
and imports discouraged.
In marked contrast has been Ger
msny's experience with foreign trade
during the second period OF pronounced
exchange depreciation. May-Dccember
1921 Tire marx fell from 1.77 cents
2G As shown by the table. imports e;l-
banded enormously from MAY to Octo-
ber the imports in October reaching
the huge figure Of 1890 100000 paper
marks. or two and half tines the
imports for May. Exports expanded
more moderately from 1853, 900 900
( paper marks in Nav, TO 9.700,000 600
paper marks in October. When re-
/ duccd 20 a gold basis the cXports show
an actual decline, from 31o00Q.000 gold
marks in MAJ TO 276,o0o000 gold marks
in October.
New-York tribune., 1922-03-19

1t Is contendcd here that az the
coupons are payable TO French citizcns,
who automatically reinycst or spend
the money in the country, the people
are no poorer collectively than before.
Moreover. there is no danger OF sud
den drop Of prices ard lcssened tax
returns concurrent with a rising cI
change. as the government VIII con-
tinue regulating the cost Of living by
means Of tariffs, as at present.
On the other hand, an improved cur
rency would offer many advantages in
the interior. as we'll as in the relations
With the outside world, which arc not
mentioned by thc professor. The pub
lie services Of France, now costing
5000, 100000 francs annually, might be
progressively reduced toward TIE nor
NAL level OF 2,102, 10000 francs. r1ile
the cost of the restoration Of ha dev-
astatcd regions, totaling lo,0o0.000-
600 francs annually, would gradually
Undergo a sim reduction.
French prestige would be enormously
increased economically by being able
to purchase III neutral markets on
equal terms With other countries 8uch
essential requirements as cotton and
oil, which under the actual situation
arc only bought in minimum quaint
New-York tribune., 1922-03-19
Trade Halted

In both periods, therefore, the ex-
panslon IN the export trade has come
not during the sharp depreciation Of the
mark, but during the reaction from the
extreme low point, This is probsblv
an indication that very sharp depre-
cation in exchange, even in circum-
stances less unusual than those which
have existed in Germany, is not re-
garded by exporters as an unmixed
pressing. In fact, the extremely vio-
lent fall of the MARI last October and
November proved somewhat disastrous
to German exporters. With the ma~k
falling so fast exporters were afraid
70 quote prices and trade Was halted.
Al the same time German buvine Of
raw materials also slackened, and the
effects of this were felt as far away.
as India. Additional proof of the Ger
man exporters dislike Of very sharr
exchange depreciation is afforded b.,
the advices from our own consuls in
Italy. 1t has been reported thut Ger
man exporters are refusing to sell to
Italy except in lire, and that hence
forth orders will be filled only in terms
OF Italian lire, fat rate Of 20 lire to
100 MARKS being adopted for conversion
Of ali price quotations. If these terms
are not accepted all untitled orders will
be Cancelled. Here is proof that the
violent fluctuations of the mark within
Germany have rendered it hazardous
Tor German exporters to enter into
time contracts for the receipt Of paw
ment for exports priced in German
marks.
The principal explanation, however.
Of the failure of German exports TO
expand during the period OF exchange
depTeclation las year. and of the sub
sequent expansion of exports during
the period of rising exchange rates.
Doth movements being contrary to the
economic theory Of the subject, has
probably been the effect Of mark inf1a-
ton upon the German home market.
AS exchange rates deprecated exports
Diminished because a heavy wave of
home buying was stimulated through
the fear that the rising prices would
rise still higher, and subsequently
when the exchange improved exports
expanded by reason Of the cessation
OF the heavy home buying movement.
In October and November last wear
Germans were literally frightened into
heavy domestic buying bv the pros pect
OF never ceasing price increases. Com
plants against exporting were fro-
quent. Upon the consumers attack
ing the electrical foreign trade boa rd
for allowing excessive export. the
board published figures TO SHOW, that
there was no excessive export The
home consumer had bought everything
up. And the safe was true in most
other important branches Early in
December, when the foreign exchange
value Of the mark began to show un-
mistakable signs Of improveing, the
New-York tribune., 1922-03-19
keponds or Irade

y For fbo future. il remains still to be
seen whether the German export trade
VIII expand sufficiently to make pos
s'ble substantial payments on rcpara-
tIon account. If the exports should
increase 10 the prewar figure of TO-
o0o.0o0.000 gold marks, the annual
reparations charge under the London
Settlement would be about four and 3
half billion gold marks (2.000,OO0 O00
gold marks cash payment, plus 26 per
cont Of the cNports). Since German
imports amounted to about four and
a half billion gold marks in 1921, or
about 40 per cent Of the pre-war an
uual imports. reparati0n payment Of
this magnitude, even in the event Of
au expansion of German exports to
their prc-war level. could only be made
upon the condition of the imports re
manning virtually stationary at their
present figure.
Merely to state the case is to an
~Wer It. 1t is highly improbable that
German exports. consisting as they do
chiefly Of manufactured products, could
expand TO more than twice their pres
ent figure without substantially in
creased imports of the necessary raw
materials. The official German trade
statistics since the armistice have dis
played most paradoXical situation.
Complete statistics arc not yeS avail
.ble
For 1919 and The first Eve months OF
1920 trade data. in paper marks, were
presented by the German delegates TO
tic Brussels Financial Conference For
IS=7 complete statistics by weight are
available. but only for exports are the
values given. For January TO April.
1921, no figures at ali have appeared,
bat since that time we have had COM
plete statistics by value and by guam
tity for beth imports and exports. In
complete as the data arc. they are yet
fufiicieut to give the main outlines of
the situation. In quantity imports
have fallen from a monthly average Of
6 5.05S.000 metric tons in 1913 TO l,75O.-
oo0 i'm 1920 and 2,157,0O in 1921. Ger
nany's imports in 1920 were thus about
auc-fourth Of the quantity imported in
1913. and in 1921 we're aobut one-third
he pre-war figure. In exports the
monthly average was 6.146,O00 tons in
9i3, $4,000 in 1920 ard 100000 in
@2l. The exports have thus been about
INC fourth Of the pre-War figure, so
ar ~ quantities are concerned. 1t
New-York tribune., 1922-03-19
Statesmen Tested by Fire Of Depression

aiding his retailer customer to take
an inventory of the store
Met with the curt statement from tne
retailer that hc had sufficient shoes IN
stock to last him for some months, one
entcr,x sing salesman requested to be
shown The store Was not large ana
the task of actually counting the num-
bcr Of pairs on the shelves and in re-
serve took only few hours. The com
pletod inventory showed stock smaller
than the retailer thought he had.
fairly good order FOR filling in broken
sizes resulted. Tho elnted salesman
wrote his experiences back to head
quarters, and the plan was outlined TO
other ralcsmcn, who have used 1T sue
cessfully. or course, the plan is not
applicable TO largo stores where per-
potual Inventories arc keut, but there
arc more of the smaller establishments
where business is still conducted in a
loose jointed manner.
Helping the retailer move the goods
Is part Of the salcsman's job. and is
receiving more attention both from the
statesmen Themselves and from sales
managers who "dopt out" new policies.
One salesman, who handles commod-
ity in which the style element is an
important factor, conducts sort Of
clearing house for his customers who
0nd themselves ovcrstocked with goods
thnt have lost their style valuc. lie
lists tho quantity and type Of out of
date merchandise among his smaller
customers and then takes these lists
to the managers Of bargain base
mcnts' in department stores and asks
them to make bid for the merchan-
disc. He has negotiated several sales
IN this manner. He charges no com
mission. but makes money on the trans
action bocauue his customers dead
stock is turned into money which can
be, and frequently is, turned back into
nov. fresh, stylish and saleab!e mer-
chandisc.
New-York tribune., 1922-03-19

Wall Street has been waiting for
many months for money easement In
January. for brief interval associated
with the usual seasonal concentration
Of funds, money was cheap; then rates
returned To their former levels. The
breah in rates last week was also
linked with 4 special influence, a sur
plus or "foat" being created by tie
tax payments aud Other operations in
which the government figured. From
this fact more than = suspicion was
aroused that cheap money was again
tempe porary and that as the "foat" was
abs sorbed rates would once more work
higher although competent authority
was not lacking in support OF the view
that part at least Of the newly
achieved ease you'd be retained
From the lenders rather than borrow
ers the decline in rates servcd to draw
forth the complaint that the new levels
at which money was passing were al
most ruinouslv low. That there was no
profit in putting out funds at sucl
figures. BaNkors who for several years
have had little cause to scrutinizc in
terest figures carefully. assured at
worst Of a reasonable margin in their
favor. were imDeiled TO moro thorough
examination into cost and return sta
tstics. Th" question 10 which they
are nov directing their attention. a
question which lately has heen implied
in tho admission that interest earnings
arc declining, 2 question which is Of
almost equal interest TO borrowers. is
briefly: What is the cost of production
New-York tribune., 1922-03-19

ceived less thar onc-fourth Of total
German exports.
The recovery of the German export
trade clearly depends, therefore. pri
manly upon the opening up of her
former markets in Europe. In mos,
public discussions this fact is over
looked, attention being given princi-
pally to the possibility of Germany's
In 1920 only 15 per cent of German
exports went to England, France, Bel
tlon payments in kind): Holland
Switzerland, Spain and Scandinavia
tempt to reopen trade with Russia
failure.
More recently, however. we have had
encouraging reports concerning Russo
German trade possibilities. 1t was re-
by group Of German manufacturers
and bankers to furnish to the Russian
to Russia. This figure, however. is
merely nominal, since the German
bankers state that the initial credit
Russian Market
The granting of credit to Russia
seems to represent the expectation Of
a return to more normal condition
IN that country, and the recognition
that the Russian market is vital 10
Germanys economic future. Russia has
raw materials essential to German in
dustry, and German has machinery
and other products needed in Russia.
"1hc Provda," Of Moscow. recently an
bounced, concerning the proposed order
for locomotives and machine tools
worth 4,OO0,0C2.000 paper marks that
Russia would pay the German shippers
one.seventh in gold, would receive a
credit for thrce-seventh until July,
1924, and would pay the remainder in
mlulng and forestry concessions in the
provinces of Bictka and Vologda. AS
long ago al last November the Russian
Commisgary Einoyieff stated that GER
New-York tribune., 1922-03-19
Increase in Income

A great increase Of income III add
tion would be secured Trough the high
customs necessary to keep cheaper e.
ternal goods from saampiag tho home
market during the period Of readjust-
ment. Even now the agricu,turists arc
assured Of obtaining 20 franc quintai
for their wheat. which i three and .
half times the prewar level.
Professor Fisher quotes 10 expert
opinion in his Interpretation o. the
French attitude Of mind, sltnolga he
supplies anecdotes OF the economic f1i-
,acies Of the peasants and shopseep per-.
1.ho. Of course. are unable 10 grasp the
irtricaces Of subject which has con-
fused the certainties Of the ~isest, and
whose direcs influence IS negligible n
the, working ou- d these matters
We will not refu.e a length the pro
fe8sor'5 idea Of redeemirg pre-war
debts in gold. vile settling ia5er obli-
cations on reduced sc2le. as tsis
would be al absolute violation q he
terms OF which tie agreements nad
ben made. a. we'll as extremely d;:-
fcult Of application. Iussmuch = Two
thirds Of TIC bonds we're bolgh- ''n l''
SIC exchange va a par. the defrand-
ny o. the unfortun2.e minority w0u -
not be sufficiently profitable . tas
s.2&e tc compensate cen Momentar.-y
for the loss Of credit.
TIE appreciation o. the franc over q
tenn Of yeags IS likewise tvea.cd =
'madress" By Dr.. Fisher, on tae
ground that business you'd be psr-
alyzed a. the prospective decline o.
their profits over q long period. Tia.
this is a fallacy has been shown By e.
perieHce since tho var d Well As in
previous generations. Dehatson ma,
been proceeding m Al 80 countries
OF the world during tho last year, eX-
cept Germany. Austria. Russia and
some others, and though depression
has resulted il is universally cor
ceded 20 have beneficial results out q
proportion 70 the fictitious advartsges g
Of an uusopNd monetary system. Enr-
land is balancing hcr budget which in
cluded interest on debt Of $4,000
100000. France IS doing likewise in
carrying normal budget Of 5000,
100000 francs, Of which one-half GOV
ars The charges OF debt capitalized
~ $50 OO0 GOO GOO
New-York tribune., 1922-03-19

tain German firms we're ready to supply
goods to Russia on payment of only
one tenth in cash, the reason assigned
being that they were bound to reagan
the Russian markets at any cost.
Reports OF this character arc OK
tremely promising and suggestive. y
thecconomic conference at Genoa could
accomplish nothing more than the re-
Opening OF Russia and Eastern Europe
10 trade with Germany and other coun-
tries. that accomplishment alone would
easily justify the calling of the con
terence. In particular, it would offer
more promising solution Of the rep
aration problem than We have yet had
through the opening up of substan-
tial avenue OF German foreign trade
expansion.
lRep1intsd from the March issue Of
"1'.e Jotr,1ol Of the Anlerica1. Ban',ers
4 Tsoci1 tioU" "
New-York tribune., 1922-03-19
I O Reduce IWcilIaii0n

The first stem III monetary reform
lies in ,hat. bv q convention with the
Bank 81 France. tne circulation o.
notes VIII be reduced each YEAR py
, zoe 100000 rancs. thNs rsoacins
priccs -ratu8 v snd improV ~ eN-
change Is the gold rsser-e o. 2epV, ,vVv'-
COO francs is brought back 10 ! sli'-
able ratio will the incOngertlole paper
By that timc. estimated n ten Years
thc devastated regions VIII nave peg
restored ann paving fuli taNes' li'
waStefui eNtrava ~ance OF ploic ser
ices reduced; the railroads reorgan'1eu
and electrified. ANA certainly some ~
preciable Preparations received 1Iu.'
Germany. LOUIS Loucheur, lo!h.eA
Minister Of the Devastated kes'ons'
fixes Frances absorption OF dellSel l,o o5o mo
IN kind. as indemnity, at oeeNoVvg'g3
gold msrhS TINS year l.o0o.OoooQo goo
marks IN 1923 ana considerably m9i'
after 1929
Another problem ciamorius tor se'
clement which VIII 80 far 20 cleSr 'hF
financial situation is the reduction o.
interest rate. sufficiently 70 permit the
consolidation of the foaung DEBT. lne
latter amounts 10 IS. .o00 100000 francs,
which would he converted INTO : .ei
cent loar, free from all inheritance as
we'll as super tax. which would man.
them popular with the rlcn, WHOSE
estates were decimated ~ the time u
TRANSMIT isSion.
A most striking feature of the eco eco
ncmic situation is the continuous.
growing economies Of the trencn peo-
pie, which, by their enormous Noiune,
compensate for the errors OF poSt-~assoo
bureaucratic extravaganza. III @Si9
S5, 5000 100000 francs were put ASIDE ~
1920 $4,000, GOO 0O9 and II 1921, despisoe ono
the continuous deAation, 36,0Oo'ooo'VVV'
The new Cabinet has taken oilice IN ~
sponsc to need for !inarcias specia1-
lists, who are expected t. make the uh-
accustomed taxes effective, ln1l'o"st,
business methods into me advances " y
funds Tor the devastated regleas az"
modernizc state monopoiies IN sNc" : :
manner that they pay their o~n wy
without assistance from the treasutt: =.
Sentiment is shown already n that uO u
one state railroad is being turned owe. w
u private company, ANA the latu1s
status Of the other monopohes, socH ~
matches and telephones. IS becohins
doubtful. The small investor WAS he'ei
more powerful and numerous IMAM ..
present, and he is demanding that Wv ~
government abandon all Saterpt'se'
which are not justified by their eaIn, s
ing power or by the natural tahc.iwvns W.
of the state in the preservation OF i"'
and order.
New-York tribune., 1922-03-19

therefore, to offset the scere process
OF denudation during the war period
sufficiently explains the growth Of Ger
man imports last year in the face OF
exchange depreciation. The failure Of
the export trade to expand has been
largely due to the same set of causes.
The chief reason for the difference in
the behavior Of German export trade
in the two periods OF falling exchange
official trade policy pursued by the
German government during the last
eighteen months.
The chief function of the Federal
Coal Council and Of the thirty or more
foreign trade boards (Aussenhandels-
stellen). which control every branch
Of export, has been to prevent the de-
nudation OF the German home market
Hence, whenever a scarcity at home
has been threatened the Iron Industry
Union has r2tioned the export Of pig
IRON. steel. plates, wire and the like.
! Ii similar way the Foreign Trade
Boards arc expected to refuse or 10
ration export licenses if any other
commodity should be short. In Decem-
Der textiles mad fallen short; the pub
lie had bought up all OF the available
product. manufacturers were refusing
TO deliver IN less than SIX months. and
the raw material supply was doubtful,
since American cotton had risen from
II marks q kilo in April to AS marks
II November. In consequence the war
time prohibition on the export Of fin
ished textiles, long abolished, was re-
imposed.
Owing largely. therefore, TO the
scarcity Of raw materials for manu-
2sc'urc and to the entirely iustifiablc
trade policy which Germany has pur-
sued in consequence of the continually
threatening possibility Of deuudation
Of home market stripped bare By
.ong and severe war. the export trade
has not responded to the powerful slim
uius Of the deprcciating exchange. On
the contrary there is ground for be-
levNg that the German export trade
would respond moro syn1pathotically
to a rise in the value Of the mark,
contradictory as that may sound. The
only months since the armistice in
which the German foreign trade has
shown ar excess Of exports have been
April and May 1920, and November and
/ December, 1921. In both Of these pc
riods tie mari. exchange was rising
after prolonged period Of violent dc
I scent. In May, 1920, the mark reached
2.34 cents, compared with 1.08 cents
the preceding February. In December,
192l, the mark rose to .611A cents
from the low point of 81. cents in
/ November.