Evening star., 1923-10-12
GERMANY BUYING
MATERIALS IN US.
Collapse of Mark Fails TO
Check Purchase of Cotton
and Copper.
BY. j. G. RoYLE.

Special Dispatch TO The Star.
NEW YORK, October II. - The col
lapse of the German mark has not
eliminated Germany as a prime fac
tor in the purchase of American raw
materials, nor is it likely to do so.
Germany is continuing to buy cotton
and copper at advantageous prices
and the supply Of dollars and pounds
sterling for payment of these pur-
chases gives no indication of ex-
haustion.
1t is well established in the south
that German spinners contracted for
large amounts of cotton in Texas
last July and August. when the price
was around % and % cents. Appar-
emily they got the cream of the Texas
crop at prices well under present
levels, for the first pickings from
Texas fields were of fine quality and
grade. while recent pickings have
been impaired in quality and grade
by late rains. Cotton exports to Ger
many are running today SO per cent
ahead of those of last year and all
available cargo room from Houston
and Galveston has been engaged for
the remainder OF the month. Exports
10 Germany from Houston alone since
August l total 6S,946 bales. Indica-
tons are that the exports of cotton
over the $4,000 bales of 1922 and
the million bales OF 1921.
Heavy Copper Shipments.
In the first eight months of this year
101,916G00 pounds of copper were sent
70 Germany, as compared with 144,07S,-
600 for the corresponding period OF
1922. In August exports commenced to
fall off. reaching only 9.5SO00O pounds.
and September exports. it is estimated,
were but little higher. This later de-
cline followed the drop in marks, but
that fall is not regarded as the funda-
mental cause of the decrease. The eX-
ports to Great Britain have been heavy
and much of this copper is believed to
have been reshipped to Germany.
German buyers are not asking for
credit They are paying in dollars and
pounds. and American producers neither
know definitely nor care how the pur-
chases are being financed. I'VE get our
Pay in good American dollars and ask
no questions was the way one Texas
cotton exporter outlined the situation
today. Copper purchases are made
through the Copper Export Association.
to which all the leading producers be :
long, and all selling and collecting is
tone by this organization without in
dividuSl producers knowing whence
comes the money they receive.
American Goods ResoId.
1t is known that some of these pur-
chaseS have been financed through
also known that Germany has resold
some American material advantage
ously in Europe and in the Argentine.
thus building up reserves in dollars
and pounds. But these factors alone
would not account for the continued
outpour of dollars in exchange for
American products. The sources of
that supply lie in the tremendous
German cash reserves built up in for
eign countries since the armistice.
An American investment banker
who has made a close personal study
of German conditions, both abroad
and in this country. declared today
that immense foreign bank balances
had been built up by German firms
for nearly four years. After the sign
Ing of the peace treaty. he explained,
an embargo was placed by Germany
on the expectation of money. All
goods exported had to be licensed,
and all foreign exchange received in
payment was supposed to be turned
over to the reichsbank. which allowed
the exporter only a sufficient amount
in foreign money to pay for raw ma
terfals. paying him the remainder in
marks. This rule was constantly and
Systematically evaded. the banker de-
clared, either through bribery or
sympathetic conniyancs of officials.
Large Credit Provided.
AS a result large amounts were
deposited to the credit of German
exporters, manufacturers and bank
ers in Switzerland. Holland and Scan
dinavia. The greatest amounts, how
ever. were placed in London and New
York. 1t is impossible to ascertain
heir total with accuracy. but one
London banker estimated the amount
on deposit in London at 100000 600
some months ago. and declared. in
his opinion. the New York balances
far exceeded that sum.
Various subterfugeS have been
used to build zip these balances. but
one common method has been to have
two sets of invoices. The first sub
mitted to German authorities for OBJ
tanning export licenses. On this set,
the German officials would retain the
designated amount in foreign eX
change. paying the exporter the re-
mainder in marks. The second set.
kept secret. would show the actual
amount for which the goods were
sold in this or other countries.
Through side agreement, the pur-
chasers would pay the difference be-
tween the false and actual invoice
prices to the credit of the exporter
in a, London or New York bank
BY this method German Industrial
lists got actual cash outside Germany
as fast as possible, and We're able to
keep it where it would escape Ger
man taxation. 1t is believed by
bankers here that these balances
still are sufficient to finance large
material purchases for long period
to come.