GERMAN EXPORT TRADE.

New Zealand Herald, Volume LIX, Issue 18174, 21 August 1922, Page 5

GERMAN EXPORT TRADE.

ADVANTAGES VANISHING. COSTS STILL INCREASING. A report recently issued by a Berlin bank speaks somewhat gloomily regarding the future of Germany's foreign trade. It states that " German industry to a critical extent is approaching at present costs of production to world market prices, and this will wipe out the superior position hitherto held by Germany in the matter of exports." In the caso of many articles prices havo already reached the level of tnoee ruling in the world markets, while in other instances world prices have actually been exceeded, and that, as a consequence, " foreign goods replace German goods, not only in the international' market, _ but even in tbe German market. This is particularly the case with coal and with certain iron and chemical goods." In dealing with the relative positions, in respect of foreign trade, of Germany and the United Kingdom, the report states: " Enjjland is an especially dangerous rival to-dav, mainly because her financial position nas improved considerably, which has enabled- the British Government to reduce railway freights, taxes, and customs. This will give a distinct stimulus to British industry, which is also reducing wages on the ground of the reduction in the cost of living. Conditions in Germany are precisely the opposite. Reduction in wages is not to bo tnought of; but, on the contrary, inl creases are being continually demanded ! and granted. Railway freights, postal ! dues, and taxes are being incessantly raised; reduction is impossible as new rises in wages necessitate tho constant raising of the tariff." With regard to the value of the mark and its relation to costs of production, the report states that " costs of producion have risen to such an extent in' Germany that the depreciation of the mark no longer acts as a breakwater against undesired imports and as a premium on export as hitherto. ( German ! industry is thus in danger of being overwhelmed io* the sa>me way as the industries of Poland and Austria, where the cost of production and the cost, of living ! have become higher than in high valuta countries (those whose currencies have high exchange value)," The report finally deals with the question of the international loan. It, eays: " Though the granting of an international loan is the only hope for German finances, yet it must be remembered that such a loan might a sharp rise in tho mark, which, in view of the position described above, would administer tha coup de grace to our export trade. On the other hand, should the international loan not materialise, wo can look forward to a further fall in th© mark, which would considerably improve tho position of our industry."