Evening star., 1950-03-12
Germans Are
Gambling on
Trade
Economists Disagree
On Where Policy
Will Lead
BY Wes Gallagher

BY Yves 0ollogher
FRANKFURT.-West Germany
is engaged in one of the biggest
economic CANDLES of all time.
Some economists say it will give
her plush lined ride to the poor
house.
Some maintain she will spend
her way to prosperity.
If Germany is going to end in
the poorhouse, she is doing 1t in
a big way-on a diet of oysters,
champagne and pate de foie gras.
Out of the morass of conflicting
figures that German and Ameri-
can European recovery economists
throw at you, however, one thing
is apparent; Germany will not
be independent of dollar help by
1852 as envisioned by ERP.
Even the most optimistic esti-
mate is that Germany will have
a $3.50 million trade deficit with
the dollar area at the end of 1852.
Most people think it will be more
than this.
Thus ERP, as far as Germany
is concerned, will not achieve It's
1852 goal.
Another factor is certain. Ger
many cannot much longer con-
tinue her free-t trade policy unless
the rest of Europe adopts a SINH
lar policy.
And. unless there is this free
trade and removal of import quo
tas and customs. economists here
see no hope for ERP success as .
whole despite the present out
break of optimistic statements in
official quarters.
Buying Tops Selling
Germany has thrown down its
barriers and this accounts for its
lush-appearing internal economy
and its swift-growing trade deficit.
The present trends show Ger
many is buying more than she 10
selling not only In the dollar areas
but in the non-dollar areas as we'll.
Germany's troubles are divided
into two sections. The first is its
non-dollar trade with other Euro
pean and non-dollar customers.
The second is the dollar deficit
trade.
First let us take what has hap
pened in the non-dollar area.
Under normal conditions, Ger
many, highly productive indus
trial area which has enormously
increased its production despite
war damage. would have an export
surplus with its European neigh
bors.
German production has reached
a point where it could again pro-
duce more or at least the same
amount of goods it buys in this
non-dollar area.
Western Germany, as an occu-
pied country, is under the direct
thumb of ERP officials and must
do exactly what it is told to do
by the occupation authorities.
BY coincidence. however, the
free-trade and free-enterpriss
theories of the West German gov
ernment coincide with those Of
ERP.
Thus ERP is able to use West
Germany as guinea pig for It's
economic ideas.
ERP advocates lowering of all
trade barriers within a European
unit.
West Germany practices what
ERP breaches. 1t is an oasis Of
free enterprise in desert of con-
trolled economies.
But when Western Germany
lowered its barriers in came a
flood of goods. much of it luxury
material which other countries
had been unable to dispose of be-
cause of trade restrictions.
Decision Due Soon
West Germany, on the other
hand, cannot freely sell its own
exports because most of the rest
of Europe still maintains it's con-
trolled economies with definite re-
strictions on the amount and type
of goods that can be imported.
Furthermore, European coun-
tries insist on Germany importing
many luxury goods if there is to
be any trade agreement at all.
Thus the German markets fill
up with all kinds of fancy foods at
fancy prices and Germany appears
to be land of plenty.
But since the Germans cannot
export their own goods to these
countries, they cannot pay for
their imports.
For example, In December Of
last year from dollar areas
alone Germany imported $49,665,-
600 worth of goods more than it
exported.
eve cannot go on much longer
on this basis" West Germany's
ERP chief, R. M. Hanes, said.
"Other trade barriers must be
lifted"
Some officials express optimism
that they will be lifted. Others
are more gloomy.
One way or another the decision
must be made in the near future.
Otherwise, to halt such drains as
those of last December, Germany
will have to resort to a controlled
economy of its own to match those
of its neighbors.
This would spell defeat for the
expressed American free-enter-
prise aims of ERP.
Most of the trade agreements
pouring goods into Germany pro-
vide that after certain periods Of
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