GERMAN INDUSTRIAL CONDITIONS.

Dunstan Times, Issue 3139, 16 October 1922, Page 7

GERMAN INDUSTRIAL CONDITIONS.

(By Lieut.-Colonel Dicker.) If one wishes to obtain a. correct view of the present position of German manufacturing industry it is necessary lirst of all to Consider closely thegew> ral economic conditions now existing in that country. The development of German domestic economy kiucc the war. and particularly during last year. was determined mainly hy three events, which deeply affected the foundations of her political economy. On March 7. 15)21. I he "Sanctions" were determined upon, in an effort to compel Germany to execute the conditions of the Treaty of Peace. The occupation ol the district on the right hank ol the Rhine and the establishment ol a Custonis dutv across a boundary drawn tluoiK'h the German manufacturing district, as well as the withholding ol the accounts for the Allied countries, was particularly damaging to the possibility of entering upon renewed foreign trade. On May 5 the London Conference determined on the mode and extent of Germany's reparation liability. The German administration was saddled with the payment of a debt ol W2 milliards (gold marks), by instalments of two milliards yearly, and a 2b pel cent, dutv upon her exports On Oct. 20 came the decision as to the division ol Upper Silesia. . , The presentation o* these demands and Germany's loss of a large part ol her most important and indispensable /ones of production and manufacture ■ coal, iron. /.inc. cement, etc.) heavily affected the world'* confidence m her solvency, as is sufficiently evidenced hy the ever-increasing depreciation ol the mark on the foreign exchanges. Llw enormous purchases of foreign securities to cover the reparation payments and the increasing passivity ol the c-eneral factors made for the further weakening of the value of German moiiev. This resulted. do,vp:te in (-raised taxation, in a general deterioration or tlie countrv's linaucial position and in the' augmentation of the floating debt through the increased circulation < A paper money. At the end of the year 1921 thus represented. roughly, LOCI milliards of marks. Had as was Germany's position abroad, it was equally unsatisfactory in many respects at home. One must admit that the will t„ work, in spite of the numerous strikes for higher wages, had everywhere greatly increased compared with the previous' vear. Unfortunately, the urgentlv-needed increase ol activity on the part of the principals and their technical and expert assistants was brought within very narrow bounds-, through the still existing law as to the limitation of the working home to eight. ' A further very serious aggravation of the general business difficulties, which often led to the actual closing down of many concerns was; caused by the scarcity 'of coal and the limited supply available for railway transport. In 1921, with the increasing value of the mark the employment ratio-line fell, and a severe money crisis set in wl ieh seriously affected German industry. Under these circumstances the situation of the labor market deteriorated until the month of June, when, in some instances, it began to improve. In the following mouth this improvement became general. Then came a heavy fall in the mark in the autumn, and severe competition set in for the purchase of goods, of all descriptions, which lasted until the end of the year. This caused an actual dearth in many articles of merchandise. Prices rose enormously all round, and the general public—that is, those who had money - -made, heavy purchases of necessaries in advance, tearing stilt greater increase in prices. This persistent home demand for goods was increased by the knowledge that everywhere huge purchases were being made for export by foreigners of all'nationalities, whose monetary exchange had higher value than the mark. It is necessary to describe an innovation of very momentous importance in German business life, namely, the "Business Councils" for both workmen and managerial officials, which play no unimportant part in German industry. This is particularly the case with limited companies, as the councils have the right to see the books and the trading balance-sheets. The "Business Council" came into existence out ol the Workmen's and Officials' Councils ol the Revolution. They are elected loi the duration of one year, by secret voting, in every business that has twenty or more workmen or employees. This council has the right to concern itself with every detail of the business which directly or even indirectly affects the workmen. The proprietor is compelled to furnish the council with all necessary information, and is hound to take notice of it-- advice and requests in all matters affecting the workmen. The council has the duty of acquainting each workman with the obligations of the contract under which be is employed, and of interesting itself ill that mutual understanding and good behavior both amongst the workmen themselves and towards the proprietor necessary for a successtiiri ena-vxvug uu of the business |' o r their mutual bene, lit. In particular it has a voice in the engagement and dismissal of women for men, in the daily work routine, the settlement of shorter working shifts on account of lack of orders, or on the other hand, in arrangements for over work, and night and Sunday work in wises of pressing necessity. The councils' also have the regulation of the holidays, and. in conjunction with the proprietor, the arrangement of the order ill which they may be taken. They al.so' co-operate in all questions ol wages and payment for piecework. Wages hooks must, on demand, be produced to the councils. They concern themselves also generally with the apprentices, with protection against accidents, and with the surroundings and condition ol the business promises. In nil adjustments as to strikes or threats of strikes the council must be consulted. Exactly the same powers apply throughout in the councils affecting tbn business officials or employees outside the workpeople. Their councils ar ■ unite distinct from those dealing with the workpeople. The costs of the eo'iiicils are borne by the proprietor. In trades where I here exists a flour.! of Surveillance, two members ol « ach I'lllsiness Council are detailed, and have a seat and vote at i hi- Hoard, lull no! the righl of speech. Every quarter the proprietor must furnish the ( 'ouncil wit b a si ateineul as to t lie situation and progress of the business, hoi I he submission of a bnlance-shi ei is not compulsory in eases where it, may do damage to 1 he pari icular class of business. These iufluctutial and farreaching organisations and regulations, originating wilh the powerful workingclass for their own protection, constitute a very wide swing ol the pendulum H'iij from flic conditions of pre-war I hues, I.inn i el i ompanies. with si areely a n except ion. suffer under I he low va I uc of i In mark. The running biisinesexpenses have grown to such an exlent thai the original pre-war capital ol' ;iU such businesses was utterly in adequate. and it had to be very greatly increased. AI hist this was accomplished with very little diffii ulty. Tin banks \vr\-f all reaping a ri*-h harvest and readilx advanced the neeessan

capital to concerns of recognised reputation. The new rich bought up the shares in blocks, and speculation was widespread. The value of shares jumped upon the Exchange day by day. and many underwent an extraordinary appreciation. At the end of la-t year came the slump, mil perhaps quite so bad as it might have been, bul bad enough. The outside public had paid heavily for its lesson, and shares gradually assumed ;■ more normal and rational level, so far as such a level can exist with Ihe constant variation in exchange rates. \ow there are still far more sellers than buyers, business in shares on the various exchanges is very restricted, and the tendency is Inwards general depreciation. Production is. on the other hand, generally speaking, satisfactory particularly so in the ease of text :1c industries, all ol which from the early pari of the year have had every spindle running and a full staff of workers thoroughly employed, hi very many cases the entire output for the year is already sold.