CREDIT BEATS CASH.

Hawera Star, Volume XLV, 4 January 1926, Page 2

CREDIT BEATS CASH.

AMERICAN RYE. SELLING IN GERMANY. JS<jv. p. “ Unite German granaries are inustmg wtiii tnia K-ars excellent r\e narvfcoc, a men me i a limns are wining to seii at i.uo clouars per ousnei, American exporters nave no croulne m capturing uie bennaii markets, selling tneir rye to German importers aL 1.00 aollars, uincii price includes Germany’s new protective tarnt. liie same applies to otner grains as well,” Count Kalokvertli, president of tlie Association of German Landowneie, said toniglit. “Inis seemingly paradoxical condition is due to shortage of the German money market,” he added. “American exporters of grains can offer*German importers credits, while the German farmers must have cash. Rye bought from America on credit is sold to the millers on credit, who in turn supply the bakers on the same basis. When the money from the consumer reaches the importers via bakers and millers, American exporters can be paid. German farmers are unable to offer these credits, and, therefore, lose the markets.” Though the recent loan of 25,000,000 dollars to German farmers through the Rentenbank, arranged by the National City Bank of New York, is considered by Kalokverth as constructive, the rate of interest, which to the farmer is Hi per cent, is considered too high to help agriculture in its present dilemma. According to the directors of the Rentenbank, the loan costs Germany 8i per cent, and the German bank charges for distribution to the farmers are 3 per cent. Indebtedness of the German landowners amounts at the present time to about two billion dollars, which is half the sum of before the war, but, with the present rates of interest, increased cost of labour and farm machinery, and taxes, the farmers’ expenses are more than pre-war figures, while his products are bringing about 10 per cent less.

“Germany’s recently-enacted protective tariff on foodstuffs has not helped the farmer. His only salvation is in cheaper credits for farmers on easier credits for wholesalers. “German, farmers never can compete with America, Russia and Australia, where there is virgin soil, since the only way to produce crops in Germany witn its exhausted soil is through intensive use of fertilisers. Under the best of conditions the German farmers cannot hope for better than an even break. With high taxes, high labour costs, we are lost. . American. loans to German communities and cities are hurting us because they are not constructive loans and are not productive of German agricultural and industrial prosperity. I, as president of the national organisation of German landowners, supnort the Reich shank president’s policy of making American loans through the Government in order that the monev will be distributed to industries and agriculture, where it will aid Germany to regain her former place as a' world power.” Ralokverth concluded.