Germany and World Trade After the War

I

IN his speech before the Reichstag on October 6, 1939, the German Chancellor Adolf Hitler once more attempted to offer an honorable solution in the best interests of the whole world for the liquidation of the senseless European war. In this speech, which was apparently not understood by Germany’s opponents, the fundamental conditions for a permanent pacification of the world, not only in the political but also in the economic sphere, were shown. As the most important condition for a real prosperity within and outside Europe, Adolf Hitler stated the restoration of an absolutely guaranteed peace and of the feeling of security for the peoples. On this basis, first of all the home trade and the production of the individual countries should be brought in order, and then, to facilitate an exchange of these productions, a rearrangement of markets and a final stabilization of currencies should take place, so that in this way the obstacles to a freer movement of trade can be gradually eliminated.

I am sure that these fundamental ideas for a rearrangement of the international economic situation, which stress the ‘safeguarding of peace’ as the nucleus for all future measures, will find a more ready response in American circles, as well as in Europe, as soon as the other countries become familiar with the real intentions of German economic policy. On the other hand, I am fully aware that often the erroneous conception exists abroad that competent German economic leadership is averse to the idea of a free international exchange of goods and that its aim is a self-sufficient, secluded national economy. Nothing can be farther from the truth than this conception. A country which, like Germany, has a high standard of living, and which is determined to increase the prosperity of its population still further and to have its fair share in the progress and the goods of this world in the future, cannot and will never voluntarily withdraw from the world markets.

The above-mentioned erroneous conception of our economic policy is based on a wrong understanding of the German so-called autarchic intentions. ‘Autarchy,’ as Germany understands it, means only the safeguarding of economic independence and thus of the self-support of the German people in respect to foodstuffs and vital raw materials. Our economic policy, therefore, demands only that the minimum ration of foodstuffs and industrial raw materials shall be produced in the country, so that the functioning of German economic activities will not be dependent on the good will of foreign countries. Any departure from the above would lead to the danger of losing our independence of action if for any reason it did not please other countries to continue their supplies.

With the stipulation for economic independence, Germany wants by no means to gain an advantage over other peoples. On the contrary, only by realizing this principle will German national economy be placed on an equal footing with the national economies of the other Great Powers; for the latter, in the majority of cases, already possess to a large extent the basis of their independence in the sources of raw materials in their own territory or in their colonies. Germany, therefore, is only demanding equality in claiming, not only politically but also economically, the same liberty she acknowledges for the other countries.

It is understood that being self-contained for the purposes of economic independence may mean producing only such articles as are essential for the life of the individual and for the working of ihe economic system. In normal times, however, the German people will, of course, not be satisfied wilh confining themselves to the bare necessities, but will rather strive to increase their standard of living still further; they will endeavor to make a still wider use of the manifold possibilities which modern industry and technique offer for making a happier and more abundant life. The natural consequence is that all those goods which, beyond the possibilities offered by home production, serve to increase the standard of living have to be imported under a well-considered foreign trade policy. In order to be able to purchase and pay for these goods from other countries, Germany must aim at a sound development of her export trade, and this is generally recognized as a fundamental principle of political economy.

Thus Germany is vitally interested in an extensive export trade with all other peoples. Of course, a different structure and arrangement of national economies than have existed in the past must be aimed at. The times of unrestricted free trade according to the theories of Adam Smith and Ricardo are, in our opinion, past. Most countries can no longer afford an unrestricted international exchange of goods with the idea of purchasing where it is cheapest and selling where the largest profit for private industry is obtainable, unless they want to put up with a more or less pronounced weakening of their political freedom of action. Every national economy must therefore think first of its own natural foundation and soundness, and every state should take care to develop and strengthen its home trade as much as possible in order to consolidate its existence. This will be at the same time in the interest of the development of a new healthy international trade, because only on the foundation of a strong home trade is it possible to restore a world trade not susceptible to crisis and free from catastrophe. These are the ideas to which the German Chancellor gave expression in ihe abovementioned speech as the essential conditions for a restoration of an unrestricted and prosperous world trade.

II

From this point of view the efforts of the German chemical industry should also be considered. In Germany the chemical industry represents an economic factor of really fundamental importance. It is not confined to perfecting technical possibilities or to improving existing goods, but it actually creates the foundation for the maintenance and existence of our people. Germany’s limited sources of raw materials have stimulated her chemical industry again and again to new inventions and technical achievements. Beyond the purpose of safeguarding economic independence, however, there is the aim to create at the same time possibilit ies for an extensive export trade. The German chemical industry would like to remain, as in the past, in a fruitful exchange with all other countries. In peaceful competition with the industries of other nations it wants to let all peoples of the earth participate in the results of its work.

This is a tendency which to a large extent has its foundation in the nature of chemistry. As experience has shown, all countries with highly developed industries contribute their share to the results of chemical research, and often only an understanding cooperation will give the full benefit of the combined work to the individual nation and to the world. In the same way as chemical research supplements itself internationally, so also supplementary economic ideas make for a collaboration in the chemical field. New products worked out by ingenious inventors are in their application not confined to their country of origin, but are automatically used beyond the boundaries of their own and neighboring countries and in all industries of the world. Only by such a wide utilization is it possible to attain their full development on a sound economic basis. These new products, furthermore, tend to extend international trade, because in their application they are in close reciprocal relation to already existing materials. Through the increase in trade, prosperity is furthered, and the progress of mankind served in a diversity of fields. Just as the various pharmaceutical products have helped to fight and suppress diseases and epidemics in the past, the many new products of the chemical industry will be accepted in the households and the workshops of the nations in order to improve the life of mankind.

Germany — in particular the German chemical industry — desires to have a still greater exchange of experience and goods with North America. We realize that the chemical industry of the United States has undergone a continued and very considerable development during the last twenty-five years. We are convinced that the work done in the United States will in future produce brilliant results in scientific and technical respects, and that the competitive position of the North American industry will be further consolidated. On the other hand, we believe that the magnitude and diversity of the North American market, with its manifold consuming capacity and supplementary possibilities, offer opportunity also for the German chemical industry, and that such augmentation will ultimately serve the industries of both countries. It is therefore the desire of German economic circles that the extraordinary impediments and difficulties which unfortunately have grown up between Germany and the United States should be eliminated by arrangements which would find a reasonable adjustment by equitably weighing the just interests of both countries.

I am fully aware that in North American circles objections are sometimes raised to measures of the German commercial policy. It is beyond the scope of these short remarks, which are intended to deal not with the past and present but with the future restoration of economic affairs, to investigate the justification of the American and German points of view where they differ. It has often been said, and I can only repeat it here, that Germany has been forced against her wish, by the press of circumstances for the development of which she should not be held responsible, to adopt forms of commerce which she is readily prepared to revise after the necessary clarification of political and economic conditions and after the restoration of normal relations.

III

As a further means of cooperation it is desirable that, after the termination of the European war, arrangements for commercial relations with the LatinAmerican countries should be made which, while in accordance with the principles of American export activities, would allow a smooth and harmonious collaboration in these countries. This seems to be of first importance as regards prices. In international trade and commerce the fair price must again be applied as the only possible basis of a secure and increased export trade. Each exporting country, in its exchange of goods with other countries, should let them participate equitably in the advantages and disadvantages of its own market. We proclaim, therefore, the reestablishment of ‘fair play’ in commercial relations and in the international price policy. It should be an aim worth striving for that no country shall sell its products abroad cheaper than it can produce them; for only if this principle is observed can the give-and-take be kept in a just relation — provided, of course, that a definite stabilization of currencies can be arranged.

Germany has endeavored in her internal reconstruction in recent years to establish a true and lasting social and economic peace, because we are convinced that only peace will bring prosperity, while disputes, on the other hand, foolishly destroy valuable property through strikes, lockouts, and similar occurrences. The same principle should apply to the relations between individual countries. There will be no sound progress in international commerce if the principles of pacification which I have outlined for the home trade are not reflected in a modified manner in the export trade. Therefore competitive fights with consequent price-cutting, as well as monopolistic organizations for the maintenance of overrated prices, are harmful phenomena of international trade which impede if they do not prevent a consolidation of world trade. The domination of the lowest price is not the economic ideal to be aimed at; we rather wish for a restoration of the fair price.

I am aware that these ideas will not be realized very quickly, and I do not overlook the enormous difficulties which today still stand in the way. But all this should not prevent us, when talking of the economic reconstruction of the future, from stressing the importance of these questions and emphasizing the necessity of enlisting the joint efforts of all peoples for the purpose in mind. Then, certainly, all such practices as the dumping of currency or goods, which, with full justification, have met with opposition and rejection in the United States, will soon vanish from the scene.

The foreign economist will easily realize that the United States, for geographical as well as economic and political reasons, considers Latin America the natural territory for expansion of her own foreign trade. But it seems to me also in the interest of Latin America that the German industry should participate in the industrialization and development of the economy of these young countries, which are rich in agricultural products and raw materials. Quite apart from the manifold assistance which the highly developed German industry can offer these countries, it must not be overlooked by an unbiased judge that the United States alone as a market for the produce of Latin America is not sufficient and that the capacity of Europe, and particularly of Germany, offers necessary and favorable additional possibilities for Latin-American products. A participation of the German industry — and we hope that after the war commercial relations with the South American countries will develop and increase substantially — will show its effects in a number of directions. The general standard of living in these countries will improve and the purchasing power will increase. With an increase in purchasing power the demand for the various high-grade products of foreign industries will grow. From a higher standard of living, a noticeably increased purchasing power, and an elevation of the general economic standard, not only one industrial country will ultimately benefit, but the industries of many other countries, particularly of the neighboring United States, will experience a reviving effect.

IV

As the German economy, on account of the variety and structure of its industry, must concentrate its efforts on the introduction of its products into all markets, obviously such an exchange of goods is aimed in the first place at Germany’s natural neighbors. The economic relations between Germany and the Southeast of Europe (Hungary, Yugoslavia, Rumania, Bulgaria, Greece) have already led to appreciable results for all concerned. Germany needs goods, and the Southeast wants to sell them. A close investigation will reveal that Southeast Europe must sell just what Germany needs and that Germany must sell just what Southeast Europe needs. The Southeast, moreover, requires the assistance of foreign technique and organization and the investment of capital for the extension of its traffic facilities, for the development of its sources of raw materials and their industrial utilization, and for the rationalization of its not yet completely developed agriculture. In the past, capital investments of foreign powers or finance groups in Southeast Europe were more in the nature of capitalistic exploitation, or for obtaining political influence, rather than of planned coöperation for the purpose of developing mutual economic interests. Germany will render the necessary assistance without such purely egoistic motives, in the spirit of mutual cooperation in all spheres.

However, it would be entirely wrong to assume that Germany has ‘discovered’ Southeast Europe only recently owing to the pressure of economic necessities. German economists, and particularly the German chemical industry, have for many years pointed to the natural connection between the economic systems of Germany and these countries and have actually drawn practical conclusions. In doing so Germany has not been pursuing capitalistic or even imperialistic aims; rather, the system of mutual exchange of goods was developed on both sides to a point where it can be considered a striking example of economic coöperation.

German assistance in the industrialization of Southeast Europe necessarily brings about higher wages in these countries and thus a rise in the general standard of living. The good but fair prices which Germany pays for the agricultural produce of Southeast Europe also strengthen the purchasing power, and thus, owing to the higher standard of living, a demand is created for industrial goods of various sorts in a manner which is beneficial to the national economy. Not only does Germany feel the effects of these developments, but a higher standard of living in Southeast Europe will also profit other industrial countries, including the United States. These satisfactory consequences will be the more effective in the course of time, as the German efforts are more successful in furthering the development of Southeast Europe and in raising its economic standard to the level of Central Europe.

Thus, on the secure foundation of these natural premises, Central Europe and the Southeast of Europe are developing an exemplary economic coöperation which the practical American business man, who in economic matters has always followed a sound, practical policy, will be able to appreciate fully. Germany, who everywhere strives for the development of the highest economic efficiency, believes that she is thus contributing a vital share to a new, organically linked, and intrinsically sound exchange of goods in the world, which we hope for in the future for the benefit of all concerned.