Evening star., 1939-03-26
Nazi Trade to Feel Weight
OF Uncle Sans Big Stick
Is Per Cent Countervailing Duties on Subsidized
Reich Exports Will Mean End of Barter
for American Raw Materials
By Cresf0n B. Mullins.


bought is dictated by the German import
authorities.
If cotton is specified the shipment is
made to Germany and sold on the Bre-
men Cotton Exchange, but the price to
the buyer is not $500 marks the official
equivalent Of $1,000, but 1888 marks,
equal to 1888. The premium, or "ueber-
prels," OF 1888 is added to the world price
Of the cotton, which now competes in
the German market at an artificial
super-price fixed by the German govern
ment.
The proceeds from sale of the cotton,
1888 free reichsmarks. are now deposited
to. the credit of the American importer
in a special inland blocked account in
German bank, but the importer can
use this credit only for the purpose
for which it was created, namely, the
purchase of fountain pens for export
The American importer now makes
his purchase, but instead of buying $500
marks worth he can buy 1888 marks
worth, which reduces his cost per foun-
tain pen by Is per cent. Thus fountain
pen which ordinarily would sell to the
American importer for 81 he can now
buy for IS cents. With this margin
he is enabled to compete unfairly with,
and probably to undersell, American
manufacturers, the Attorney General
points out.
American Exports Restricted.
At the same time the expectation of
American cotton to Germany has been
restricted, first by the necessity of OBJ
tanning permission for the importation
into Germany, and second by the pre-
MUM placed upon its price to the Ger
man buyer.
All such transactions now will be sub.
ject to the Is per cent countervailing
duty in addition to the regular tariff.
Thus the price to the American importer
is increased by an amount equal to the
German export bounty.
The new duties are applicable not to
specific articles, but to all kinds of goods
the export of which is financed by in
land marks. Thus each shipment Of
goods will be subject to close scrutiny
as to the manner in which it was
bought.
All dutiable imports from Germany
70 per cent of the total imports last year
are subject to the extra duty at the
time of entering the country. The coun-
tervailing duty then is to be refunded in
all cases where it is shown positively that
the importation did not involve the use
of inland marks.
The result is that barter trade be-
tween the United States and Germany
is prevented until the Reich succeeds
in convincing the American Govern
ment that the use of blocked marks
does not carry with 1t a subsidy. Ger
many henceforth must uquidate her in
ternational balance with the United
States in foreign exchange.
Aim to Offset Devaluation.
The German position is that the in
land mark was inaugurated partly to off,
set the effect Of the 40 per cent devalua-
ton of the American dollar in 1884,
which increased the price Of German
products in the United States by a pro-
portionate amount.
German officials in Washington insist
that the present method Of trading was
approved by the Treasury in December,
1896, with the knowledge of German
economic restrictions as to import, export
and foreign exchange. and that there has
been no change in the procedure since
that time.
The immediate effect of the new duties
will be to force even lower the volume
of trade between the two countries, and
to strain further relations already atten-
uated by American resentment against
Na1 foreign aggressions, oppression of
the Jews, and houting of the courtesies
due heads Of foreign states. Trade fig
ures for 1888 showed imports from Ger
many 30 per cent lower than In 1887.
The more profound, yet less discern
ible, effect will be retardation of Ger
manys drive for f-sufaciency through
the four-year plan by excluding large
amount Of German goods from the
American market.
Reich Must Find New Outlets.
Also slowing up the autarchy CAM
paign of Field Marshal Hermann Will
helm Goering and his economic GEARS"
will be the necessity now Of parting with
more Of the closely held "devisen'-
foreign exchange-for the payment Of
what goods Germany continues to buy
In the United States.
The exchange problem Is the alpha
and omega Of Germany's foreign trade
difficulties. Forced to purchase most
Of her raw materials and large part
of her foodstuffs abroad, the Reich must
pay either with her own exports, to
which there is natural resistance in
other industrial countries, or by transfer
Of foreign exchange, acquired from
countries which buy more from Ger
many than they sell to her.
Germany now will be under the ne
cessity Of finding new outlets for that
portion of her industrial expectation
which will be barred from the United
States, and of finding new sources to
obtain by barter the raw materials
chiefly cotton and copper-which she
has been getting by that method In
the United States.