Evening star., 1923-05-11
RY HIRAM X. MODERWELL.

Following is the tenth of Mr.. Moderwell 5
series OF articles on financial and industrial
conditions in Germany.
Special Cores spondence of The Star and Chica go
Daily News Foreign Service.
BERLIN, Germany, April 20.-The
means by which handful of indus
trialists in Germany have been able
to acquire huge share of the wealth
remaining TO their exhausted country
are of three sorts: (a) The Legitimate
economies due to vertical organiza-
ton of production from the raw ma
terial to the finished article under
single direction: (b) manipulations
of the deprecated mark and foreign
exchange, and (c) low wages and
production costs due to the high do
mrstic value of the mark resulting
1lom continued imitation.
The monthly wage of skilled
worker in unoccupied Germany IS not
more than 100000 marks month
about 500. The corresponding wage
in America would he between 800
and size. IL is easy TO see what an
advantage the German industrlaHst
las over his American competitor in
this item.
The workman. however. is not as
badly off as the wage ti9ure would
suggest. Because of controlled rents
and subsidized bread the worker and
his family can be sure of Il minimum
of subsistence. His $50 wage is per-
haps equal to from $40 to $50 in
american purchasing power
Indirect Contribution to Rich.
The ruined house owner indirectly
subsidies the big induStrialiSt by
foregoing nearly all his rent and
thus permitting wages to be cut at
least 10 per cent. The taxpayer, by
supporting the bread subsidy, does
he same. He also. until few
months ago, indirectly subsidized the
manufacturer by paying the deficit
on the railroads which gave them
cheap freight rates. The railroad de-
partInent of the government appar-
emily has made a serious effort to
balance its budget and in the last
few months before the Ruhr invasion
mad succeeded. But the continued
lall OF the mark upset all Its calcu-
iltions. Freight rates. like passen-
ger rates. have at times been amaz-
ingly cheap. have Travelled four
hours, first-class. in an express
train. for % cents. The industrialists
profited enormously by cheap freights
Put the government could not raise
rates o~the world level for the big
industrialist without the risk of put
ting the little man out of business.
Because of low wages and low
freight rates. raw materials have
been cheap. in so far as they orig
mated in Germany. The same was
true of equipment manufactured in
Germany.
This situation, however. has its dis
advantages. Most of Germany'S in
dustrial raw material must be i'm
ported from abroad at world prices,
whereas the manufactured product
cannot be sold in Germany at world
prices. It is not business in general,
!.ut the exporter, especially the eX-
porter in the iron and steel indus
tres, who profits from low produc
IIon costs.
Textile Industry in Bad Shape.
The textile industry. for instance.
must import practically all its raw
material. while labor cost forms d
comparatively small proportion of the
total cost of the finished product.
Hence the textile industry has nearly
all the disadvantages from this situa-
tion and few of tie advantages. 1t
mas been obliged 70 charge prices
which for Germans are terrifically
high. 1t has always been in an un-
neatly state. and is now in a condition
bordering on ruin
The industrialist exporter profits
chiefly from low production costs only