Evening star. [volume] (Washington, D.C.) 1854-1972, 1949-08-07
Soviet Zone
Price Tricks
.IrkGernanS
Dumping of Low.Cost
Goods Disturbs
Economists
By Flora Lewis

the West German economy and
e.. some Allied economic experts have
come to the conclusion that the
Russians have now decided to rely
on these rather typical monopoly
capitalist methods instead of
pushing for a trade agreement
with West Germany.
= The dumping consists Of selling
large quantities OF certain surplus
goods at prices considerably below
those obtaining in West Germany.
In some cases, experts believe that
the prices are actually below pro-
duction costs.
The Russian zone has the ad-
vantage of existing plant and low
-er wage scales in some industries
In others. it is apparently worth
their while to lose money so long
as they can earn west marks with
which to buy goods they can only
get from the west and badly need
for their reconstruction program
Businessmen Concerned
The main items which have
been dumped thus far have been
glass, especially laboratory and
optical glass: knitted wear and
certain textiles and some. chem
ical and electrical products. These
are things additionally manu-
featured in Eastern Germany
During the blockade Of Berlin and
the counter-b blockade. new plants
were set up in West Germany to
fireplace the sealed eastern sources
Of supply.
- West German businessmen and
economists have expressed con-
'cern at the effect this dumping is
having on the new western indus
tries and there is q fear that the
Soviet competition may force some
bankruptcies. Allied officials are
less worried and inclined to feel
that there may be the fortunate
result of forcing costs down in
. the West.
The problem is entirely different
in Germany than it would be any,
where else. since there can be no
question Of tariffs or protection
for the West German industries
unless the border of the Soviet
zone is considered as an interna-
tional frontier where customs
could be exacted-a political deci-
sion of reaching scope and
absolutely impossible of applica-
ton at least in present cir
cumstances.
The impression that the Rus
slams are no longer as anxious to
obtain an East-West German
=, trade agreement as they seemed
when they lifted the Berlin block
ade Is shared by both Allied, and
West. German negotiators. -,
Trade Never Stopped 60,
The four power talks on the
:, subject continue desultorily,, but
each time they begin to get any
where. new transport or proce-
dural troubles break out and side
track the negotiators. In effect.
the economic discussions are at a
standstill.
The East-We German talks
have been broken off. They came
, to head-on conflict on the ques-
ton Of Observation-Disclosures a rate
of exchange is to be fixed for East
and West marks or whether, in
= effect, all trading is to be done in
West marks. The Eastern repre-
sentatives seemed at first to agree
to the latter way of doing business
but they have now insisted that
an indirect rate be fixed. This is
unacceptable to the west.
Contrary to the impression of
most people not directly involved,
the lack of agreement has not
prevented trade between East and
West Germany. In the first
month after the blockade, it
amounted to 100000 West
marks and II the Russians con-
stinue their dumping practices, the
9fate will rise.
80 On q smaller scale, the Russians
have done exactly the same thing
'ih Berlin, where they have sharply
reduced prices in their free
shops" department stores where
all manner of consumer goods can
be bought off the ration. AS a
result, they have attracted a great
flock OF buyers from Western
Berlin,
Why the Russians now seem
only lukewarm about fixing trade
terms between East and West
Germany when before they ap-
'peared hot and anxious must be a
matter for supposition. Allied
economic experts who have been
dealing with the Russians believe
that 1t involves the question of
tightly controlled versus free
economy. They think the Rus
slams have decided that with their
own Arm hold on the industry OF
their zone. they can reap the ad-
vantages offered by the Vests
comparatively free economy with
out suffering any disadvantages
and. in the end, come out better
than they would under a precisely
fixed trading schedule.
Permits Easy to Get
The two main points of interest
; to the Russians in the East-West
German trade are: One, to get de-
livery of the type of goods they
want, and two, to earn the means
Of payment.
- Dumping seems to be working
ION the latter objective, and the
increasing anxiety of Western
producers about markets has made
- the former less difficult thar
might have been expected. Trade
permits are required for each