GERMANY'S NEW BID FOR COMMERCIAL SUPREMACY.

Digger (Invercargill RSA), Issue 3, 1 April 1920, Page 15

GERMANY'S NEW BID FOR COMMERCIAL SUPREMACY.

With all the old industry and zeal, and with a desperate doggedness compensating for some lost confidence, republican Germany has started to do what Imperial Germany failed in — to beat the inferior rest of the world. World power or destruction — the grim alternative of Bernhardi — is as actual as it ever was ; with the defference that the first word to-day modestly qualified to domination of the commercial world. Of Germany's strrqggles with humanity in avery domain of civilisation — and of barbarism — the struggle is financial organising power, technical industrial dexterity and commercial pushfnlness remains nndecided ; and here Germany, though weakened, is still unbeaten. She has behind her all the material, intellectual and moral — or immoral — forces that make for victory. The old personal industry and inherited skill of labour, the high education level, the advanced technic of production and judicious unsqueamishness as to means employed when ever tb : dropping of "unreasonable" scruples brings nearer to a satisfactory end. And Germany has on her side a further advantage which fully compensates for her loss of maritime power. That is her privileged geographical position in the Eastern Hemisphere, in the inathematical centre of the world 's greatest .aggregation, of civilised men ; next door to England, France, and Italy ; to the potent-ially wealthy lands of Austria anu the Balkans, to the Scandinavian noi*th, and to the immeasurable Russia, which almost seems to have been created to supply Germany with everything that Germany wants, and to take off Germany's productive hands everything of which Geimany needs to be rid. THE PERSISTENCE OF THE CONQUERED. And above all. Germany has the special advantage that her fighting days are over. That is the real meaning of the gibe which emanates from Berlin that though the Allies won ihe vvar Germany won the peace. The Peace Conference, it follows, may have done the non-German political world a service when it drew Germany's political teeth, killed her high diplomacy a i f i broke her sword. But thereby it rendered the non-German commercial world no though tful service. It is easier to fight with oixe weapon than with two ; and Germany to-day — rid of the cost of an army and a navy, with the brain power which she formerly wasted on planning raids through Belgium concentrated on the arts of peace- — is more formidable by far than the invanishing fighting era of her history. The ingenious Professor Nicolai, Wilhelm II's heart doctor, who first startled Europe by flying from Prussia in an aeroplane, put that factconvincingly when in support- of his doctrine that tce battle is not alwavs to the strong he quoted the reply of the wise old Li Hung Chang to the merely violent coxxqueror Waldersee : "How is it," asked Waldersee when the Boxer trouble was over — "how is it that you can look on so coldly when your lands are being conquered and ravaged." "Oh we are always being conquered," antwered Li with a weary smile. "The Tartars also conquered us. But look round you for a moment, and then please answer my question : Where are the Tartars now ?" In Germany and the adjacent countries which are the present chief theatres of Geiman Commercial Activity this etern il Paradox — the dwindling of the lion and the wolf, and the unceasing mcrease and multiplying of the laborious ant — is brought to notice every day. In Germany one see® it in unexampled preparations to produce and export, to cut prices, to regain markets, to win new ones; and in the small neutral countries one sees it in panic preparation to resist the inevitable flood of impossible cheap German wares. Most of all one sees it.in Soviet Russia, where the German engineer and German trader flourish in a million of hardships from which the toughest Ally citizens long ago fled. In all these countries acute economical observex*s realise that the supposed crushing of German commerce is a myth. They remember that Germany, after the Thirty Year's War was far worse off than today ; and that after the Seven Years' War the Prussia of Frederick the Great was a byword for poverty, mean living and an anti-commercial bnreaucratism, so that neither in Germany itself nor in the neighbottring neutral countries does one finci a single intfiligent ohserver who does not foresee a time, which historically considered is not very remote, when Repuhlican Germany will be the greatest seller

in Europe, and .not impossibly the greatest seller in the world. Enterprising German business-men within the first few weeks after the r evolution laid special stress upon this dominant feature of Germany's commercial renasoexice — on the fact that only as a great seller, as a great exporter, can Germany again get on her legs. And for that she must make every conceivable sacrifice. "We have nothing to export but we shall export our own blood" are the words used by the representatives of commercial Germany. But the doctrine that Germany will sell abroad what she cannot alford to buy at hcme is well understood. A frantic export trade is necessary because only in that way can the shrunken exchange of tho Reichsmai'k be restored. Because only in that way can the foreigi; indebtedness, swollen to enormous dimensions by the Treaty of Peace, be met ; and finally because however unpleasant it may be for the home consumer it is indispensable to cast goods upon forei'.*u markets while these are in a state of flux, and before rival sellers have consolidated their position. So — as indeed the new German prime minister told the National Assembly at Weimar — indispensable gocds, indispensable clothes and indispensable raw materials are all that Germany will consume for at least a generation to come ; and her surplus of productive energy will be concentrated on a profitable and redeeming export trade. The German whom I have referred to not only stated this ; he added that Germany's exports must be of a paiticular kind. They must be quality goods — goods, the production of which will absorb the greatest possible amount of labour, and the srcallest possible amount of raw material. That is involved by the vast prices that foreign raw material will in future cost Germany. Whereas this German's own corporation paid for copper before the war 1200 marks per metrical ton, to-day as a result of the tbree fold depreciated mark exchange it must pay for copper, which in the world' g market has less than doubled in price at lcast 6,000 marks a ton. Such an extra burden could be borne only if the corporation turned out high price goods in which t'u cost of raw material was a relatively small item. GERMANY SHAMMING. That accounts for our observatxons in neutral countries: That offers of German marked goods have markedly fallexx off, whereas all the big cities teem with Gerjnan agents who have fine and costly products to sell., The dumping of Gernxan goods of which oxxe hears so much is indeed a fact; but this does not mean tha production of goods of a cheap class ; ii nxeans that the production of naturally expcnsive goods and their export at prices below those of xxeutral and enemy rivals are the main means by which Germany hopes to recover her positioix in foreign trade. Visitors to Germany and to neutral countries where German trade emissaries abound are surprised to find overweening confidence as to the future side by side with exaggerated depression. Part of the depression is false — its source is Germany's wish to paint her coxxdition w7orse than it is, that being useful in combating the economic provisions of the Peace Treaty. But in fact Germany has troubles that are real enouglx ; and it is only when one weighs also her advaixtages that oxxe realizes how fuxxdamentally strong her positi r. is. All German industrial troubles cor.verge in one direction — towards the raising of production costs. That is the practical result of the higher wages and infiated cost of li ving of which German's complain. By this price rise beyond doubt Germany's selling power abroad is reduced. But against the drawback is the overwhelnxing advantage of the sunken mark exchange. And this sunken exchange is the lever for selling which Germany is today wielding with success in every country withixx her reach. The main facts of Gex'many's price level and of the compensation of the fallen mark exchange need to be made clear. Germany is short of coal and iron. In the first five months of 1919 the coal output in the Rxxhr district fell to 60 per cent off normal. In 1918 pig iroix production totalled only 11,864 tons against 18,935,000 tons in 1913. "The 1,520,000 tons of pig iron is all that Gexunany produced hx 1913 in the one nxonth of April alone. The prices now being charged for coal and iron to the finishing mamrfactures are unprecedented, and this is not because the insufficient output has freed producers from competition but because of a permanent rise in productive cost. The wage list of seven metallxrrgical works in western Germany, registered a nominal increase of 400 per cent over peace rates. Owing to fallen^

individual efficiency the real wage increase is even greater. On the Ruhr since 1914 the coal production per man per shift has fallexx from .95 tons to .66 tons. The outlay in wages per ton rose enormously — from 5.68 marks to 22.21 marks ; and the net production cost per ton rose from 9.38 marks to 41.40 marks. Since the Armistice coal prices to consumers have risen at break-neck pace. Whereas between the oufcbreak of war and Jaxxuary 1, 1919, coal prices were raised by an additional 44.50 marks. To-day coal at the pit's mouth costs 73.85 marks a ton ; and foundry coke, which has undergone an even greater rise costs 104 marks. Owing to pressure on our space this powerful article will be continued ixx next week's "Digger."