Perth Amboy evening news., 1922-08-15
R COMPETITION WILL
NOT BE FEARED IN u. S.
Daily Letter by Frederic j. Haskin

WASHINGTON, d. c., Aug. IA
So much has been said to the BUSH
ness men of the United States and
other countries about the bug-bear
of German competition that the De-
partment of Commerce has made a
special investigation of the subject.
1t has led to the conclusion that
there Is nothing to fear from Ger
many in the foreign trade field.
The basis of this conclusion Is the
high cost of production of German
goods which compete with Ameri-
can goods in the worlds markets.
The facts assembled by the Ameri-
can government make it clear that
stories of extremely low costs OF pro-
duction in Germany are erroneous
and that the American workman's
job is not menaced by the COMPETE
! ton of the Teuton.
What makes the German cost OF
production appear low and what has
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
49, "oyS ASS~
subsidies, it 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 cannot be lessen
ed by such bookkeeping legerdemain.
If the German government Is sub
sidizing industries in ORDER that they
may produce cheaply, Germany 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 49,
000, 10000 0 marks a ear This has
ment hat 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 nroducts. Nearly
5000, 900 900 marks have been paid
in the last year as subsidy to the tel
ephores and telegraphs. Here again
the industries are spared a cost by
virtue of its assumption by the gov
eminent.
Public utilities have received bill
lions in government subsidies and
this means that they have been en-
abled to charge lower rates to indus
tries 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 work.
man paid about Is per cent of his
weekly wages for house rent. Under
the restrictive laws which have for
hidden landlords to increase rents,
the proportion of weekly earnings
paid for rent has decreased mater
tally.
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 'iot be high.
There has been strong pressure from
the landlords upon the government
authorities to permit increases in
rent, but this has been met with the
statement that to increase rents
would mean q general increase of
wages and q consequent increase IN
the cost OF production of German
goods.
1t il recognized that these condi-
tions cannot long obtain. The tax
payers and the landlords will weary
of paying a large percentage indi-
rectly Of the cost OF production OF
the German factories. The Ger
man people have stood solidly to-
gether in attempting to keep down
production costs and enable Ger
many to reenter the foreign trade
in such a way as to undersell the
United States and other competitors.
but It is apparent that the farce can
not continue indefinitely.
The government experts h MADE
the investigation Of German produc-
ton costs assert that the situation
10 based on 30 false an economic
structure that it must collapse soon
and that the longer the subsidized
industries operate. the sharper Will
be the reaction. One special report
described the hectic prosperity
which these f~ictitiously low produce
ton costs stimulated as a ~"catastro-
phic BOOM"
Value of Marks Imnortant
The value OF the German mark
has been falling rapidly in interna-
tional exchange. but It has not fallen