Imperial Valley press., 1924-09-06

wondering how a revival of trade in
Europe will affect our own markets.
Roger w. Babson' Is analysis of the
situation, made public III state
ment issued today, is then of unus-
ual interest.
There is no doubt but what the
reparations dispute is and has been
one of the chief obstacles to buSi |
ness recovery in Europe" says the
statistician. ''With this question
even temporarily out of the way,
everybody in Europe will feel like
going to work. In this country also
there will be an immediate stimula-
tion of business.
.,sWe should not, however, lose
sight of the fact that conditions in
Europe are~far too serious to be
Immediately adjusted. We have seen
in the United States the hinder
anees of business activity which
come from lack of balance in the
commodity market. For some time
past the grain raising farmers have
been at disadvantage in the mar
ket as compared with the wage
workers in the cities. This lack of
balance has been restraining in
fluenee upon business.
High Production Costs
"We have the same thing on an in
ternational scale in Europe. Nations
cannot trade freely with each other
unless there is a fairly close ad
herenee to a common standard of
production costs. This is exactly ,
what does not exist in Europe to-
day. England, which has always
been one of the large factors of
trade in Europe, is confronted with
abnormally high production costs
within her own gates.
1t is difficult to see how England
can today sell British made goods /
in Germany, France, Belgium, or |
Italy, not only because of the un-
favorble exchange conditions, but !!
because of the tremendous differ |
ence in efficiency of English man
process as compared with |
those on the continent. We cannot !
have good business in Europe until !
its removal is not a matter of days
or weeks, but in all probability a /
matter of years.
is".If 1 were TO :. list European
especially N'those which
were engaged in the World War, ac
cording to their present condition
and fitness in trade, | should un-
loubtedly place Italy first. Next
oouId come Germany and Belgium,
hen France and last of all England.
If this order is correct, it is worth
The scrutiny of everybody who is
in international condi-
tions. 1t is almost complete re-
versal of similar list that might
have been made before the war.
Furthermore, it is list that is
wrong if we look at the fundamental
conditions in the various countries.
Italy Heads List
There is no good and sufficient
eason, from the fundamental stand
POINT, why Italy should be- placed
It the head of the list. Upsets like
hese must must be adjusted before
europe will go ahead very rapidly,
,ut Italy is in the best position to
ompete and trade today. Never
heless, / believe that with the set
lement of reparations there will be
IN immediate and fairly eontinu-
,us improvement of business con-
litions throughout in Europe.
'.This situation is important to us
n the United States not only from
Christian or ethical standpoint;
,ut also because of what it means
o business in the United States.
There will undoubtedly be consider
lble buying of raw materials, food
tufts, etc, in the United States by
continental Europe in the year fol-
owing the reparations settlement.
lust how long this will continue and
o what extent it may go depends
lpon the success which those coun-
condition of trade and industry.
rhe recovery and return of indus
rial prosperity in Europe, of course,
'arries with it competition for our
Industries in this country. The only
way that Europe will get on its
feet, restore its money to parity on
exchange, and really come back into
is by producing and sell
ng in the markets of the world
nore-than it consumes. i look, there
sore, for active competition in all
If the foreign markets of the world
where our merchants and manufac-
.urers meet with Germany, Italy,
Belgium and France. do not, how
,ver, believe that England will Of
Ter active competition in the i'm
Mediate future.
"If you would estimate the effect
# this competition in any specific
inc of industry, examine the labor
.ost of that industry as compared
With its material and other operat
ng costs. Europe will have the
ldvantage of cheap labor and will
ompete keenly in lines where labor
epresents large factor in produc
ion expense. The United States
will have the advantage of cheap
money and hold its own in mass
where great capital in
'estments are necessary. We Will
ontinue to lead the world in lines in
which labor is d relatively small
tenn.
"There are two means Of protect
ng ourselves against losing anything
" this new development in Europe.
Ne can build up high tariff wall ;
nd attemptto maintain high prices
lere or we can take the opposite
curse and try to meet this competi-
ION by increasing our efficiency and