The Rock Island Argus and daily union. (Rock Island, Ill.) 1920-1923, 1922-08-11
Frederick Haskins Letter
GERMAN coMPETII1oN.HoT FEARED

The government experts WIN
made the Investigation OF German,
production costs assert that The
situation 10, based on SO false an
economic structure that 1t inust
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
ictitiously low production costs
stimulated IS "catastrophic>
boom"
Value Of Marks Important
The value Of the German mark
has been falling rapidly in inter-
national exchange. but it has not
fallen SO rapidly within Germany.
= ais means that Germany has en-
)oyed foreign trade for another, i,c-
titious reason. Foreign buyers Of
German goods could, with q small
amount Of their own money, nav
substantial sums-in marks. The
marks are worth more in Germany
than anywhere else. Therefore Il,
has been desirable for foreigners
to buy German goods and desir-
able for German industries to con.
tinue this trade. But it is impos-
sible to maintain . one-way trade.
Germany must buy as we'll as sell
and in buying the tables are turn
ed. While the declining mari
favors sales Of German goods, I
makes 1t more and more expensive
for Germany to buy
The process still is going On but
it shows signs Of the inevitable e.
plosion which will bring a sorry
end to the whole cycle. This col.
lapse will drive Germany out Of
the worlds markets, in the opin-
ion Of the government experts. She
will be unable to reenter until she
passes through trying period Of
defiation and readjustment which
will bankrupt thousands. She has
no financial strength to Withstand
the shock. 1t Is obvious that no one
in Germany is saving money, for
saving appearS to be the most er-
rant folly. II a MAG has 10 marks
which by tomorrow will have the
purchasing power Nof only 9, be-
cause Of the progressive deprecia-
ton, he has no inducement to save.
Instead, he is eager to turn his 10
marks into some tangible article
while he can.
It Is reported that some Ger
mans, 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 depreciate. The
life savings in marks of pre-war
workmen would not support him for
a month, perhaps not week, undhr
existing conditions Of deprecated
currency and high commodity
prices.
While Germany is working hard
TOT restore her prestige in the for
eikn markets, the American govern
ment experts are convinced that
American manufacturers need not
fear competition based on 50
flimsy and insecure q foundation.
The economic collapse must come
and when it does the German cost
of production will leap up to its
actual economic level, unobscured
by government subsidies. This will
give the steady American indus
tries the advantage, and they will
in all probability be in a position
to undersell Germany on every
hand. For not only must Germany
Ireturn to normal levels but prob
ably must 60 above them for per-
iod because the arrears must in
some way be made up. Economic
law is inexorable. 1t cannot be
evaded. The burden of full cost Of
production can be lifted from a
commodity by such artificial means
as Germany has employed and car
ried 70 IA temporary period, but
sooner or later its full weight must
sag down again. The weight, in an
economic, national sense, must be
SO great as to equalize and make up
the arrears, before a normal level
Of cost can be reached again.