have improved remarkably, as the following summary of German domestic exports shows:

Between 1923 and 1925 exports increased by almost 50 per cent., and in many individual industries they rose at even a more rapid rate. For instance, exports of artificial silk have more than doubled, from 26,958,000 marks to 55,788,000 marks. In many industries the German record is better than before 1914. During the war England endeavoured to capture the German toy trade. After the war large British toy industries were to supply English toys to English children. According to German official figures, Germany exported to England, in 1913, 14,809 tons of toys valued at 25,680,000 marks. In 1925, in spite of the establishment of the toy industry here, she exported to England 16,041 tons of toys, valued at 38,110,000 marks. As German exporters try to disguise the origin of their goods, sending them to a large extent by roundabout routes, it is likely that the German toy exports to England are much larger than is shown by the official figures.

As cotton goods are most important to industrial England, so are iron and steel goods important to industrial Germany. Before the war Germany produced nearly twice as much iron and steel as Great Britain. She lost by the Peace of Versailles not only the vast coal fields and the iron and steel works of Silesia, but also the iron ore fields and iron works of Alsace-Lorraine. Notwithstanding these losses, which were expected to cripple the German iron and steel industry, that industry is now highly prosperous. Production of iron and steel within Germany's present borders has changed as follows:

While British iron and steel production has declined deplorably owing to strikes in the iron and steel and

mining industries, German production has increased. During and after the war, the already far superior outfit of the coal mines and iron and steel works was further improved, with the result that, at present, the mechanical outfit of Germany is infinitely superior to that of Great Britain. Commenting on the iron and steel trade, the Report of the Department of Overseas Trade recently published stated: 'Contrasted with the United Kingdom, Germany, with some eighty furnaces in blast, produced more pig iron than the United Kingdom with over double that number in operation, and the results show the large unit lay-out with which Germany is equipped.'

Large furnaces produce iron more cheaply than small ones. Germany produces most of her iron and steel with huge modern furnaces; while England employs principally small and uneconomic ones, which were out of date ten or twenty years ago. The Government Report previously mentioned tells us :

'Everywhere in the German metallurgical and engineering trades very serious study is being devoted to the efficiency of production; transport arrangements are being overhauled and brought into line with mass-production programmes. The technical re-equipment of the large steel works has been pressed forward, and plant not fitting in with the requirements of modern mass output ideas has been to all intents and purposes discarded or laid idle, so that the present-day steel units in operation are composite examples of the latest technical improvements.'

The figures given show that in 1925 German steel.production exceeded the 1913 output, which constituted a record. However, Germany produced in 1925 steel much below her full capacity, as during part of the year the important Ruhr industries reduced their output by 35 per cent. below the normal. Apparently Germany has a steel capacity far above her pre-war capacity, notwithstanding the loss of Silesia and Alsace-Lorraine, and is rapidly recovering the iron and steel trade which she had lost. The Department of Overseas Trade informs us :

"The most important feature of the foreign trade is that Germany in 1925 exported some 3,500,000 tons of iron and steel products, or some 1,500,000 tons more than in 1924. It

is not easy to make a comparison with 1913 owing to the absence of separate statistics of the foreign trade in that year of Lorraine, Saar, and Luxemburg. Within her previous Customs frontiers Germany exported some 5,400,000 tons of steel products, and about 1,000,000 tons of pig iron and scrap, whereas she now exports some 3,000,000 tons of steel products, chiefly manufactured. Taking into consideration the fact that Lorraine, the Saar, and Luxemburg had in 1913 a production of 4,500,000 tons of rolled steel and that the selfconsumption of those areas was relatively small, and in consequence contributed largely to the German 1913 exports, the conclusion would seem warranted that Germany, as she now stands, attained in 1925 her pre-war exports and may, indeed, have exceeded them.'

The writer of that Report is too cautious. Apparently German iron and steel exports in 1925 greatly exceeded those of 1913 in weight, and particularly in value, for Germany is specialising now in the more highly-finished manufactures, both for home consumption and for exportation. At all events, German exports of machinery in 1925 greatly exceed those of 1913, and we find similar developments with tools, hardware, and so forth. Recently an international combination of German, French, Belgian, and Luxemburg iron and steel works was concluded. There is now a great Continental Trust with an output about three times as large as the theoretical maximum output of Great Britain. That combine is dominated by the Germans, and there are indications that they mean to work hand in hand with the great American makers. Judge Gary, of the United States Steel Corporation, an organisation which produces more iron and steel than England, France, and Germany put together, recently made a cautious and noteworthy statement in which he hinted at co-operation between the gigantic American combines and the German-dominated Continental combine. The individual, small, and generally ill-equipped British works may find themselves between two powerful millstones, an unenviable position. The valuable Report on the Electrical Industry in Germany previously mentioned stated:

'The output of finished products by the rolling mills is now actually the same as in 1913, and is sufficient illustration of the recovery that took place in 1925. The position over

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Before the war, Germany's industrial leaders wished seto conquer the markets of the world by direct invasion, by under-selling and a lavish granting of credits, and were raided in that policy by preferential railway export tariffs; by the banks which granted generous credit facilities, and particularly by the great industrial organisations which gave bounties for exports. The leading business men of Germany seem to have changed their tactics. They have improved organisation on the largest lines, and eliminated small and inefficient works. The giant undertakings which have been equipped regardless of f expense, and dominate the industries of the country, are now endeavouring to reserve for themselves large and profitable markets by international arrangements. Interesting and significant attempts have been made to create a partnership between Germany and the United States. A community of interests has been established between the two countries. The United States have advanced money lavishly to the great German combinations and works, which, in turn, have concluded arrangements with similar undertakings in the United States, and every week we hear of measures being taken whereby German-American co-operation in the fields of finance and industry has been strengthened. It may safely be estimated that foreign financiers, particularly hi Americans, have advanced to the German industries about 200,000,000Z., which huge sum is principally employed in improving further the German industrial plant.

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Shipbuilding all over the world has fallen on evil days. Some time ago German builders snatched a few shipbuilding contracts from England, but now they are sorry they did so for they have worked at a heavy loss. However, although the German shipbuilding industry ill as a whole has suffered, the official figures disclose some at interesting and significant facts.

The decline in the output of steamships does not call for comment. That decline has been universal. It is interesting, however, to find that in 1925 Germany was building 170,000 tons of steamships and no less than 370,000 tons of motor ships. Obviously she is specialising in the most modern form of shipping, just as she is concentrating upon the most modern methods of industrial and agricultural production, and it is ominous that her output of motor ships for foreign purchasers has increased from 1653 tons in 1921 to 242,624 tons in 1925-a hundred and fifty fold. Interesting developments have taken place in German shipbuilding. The great shipyards have formed an intimate connexion with the great iron and steel producers with a view to eliminating waste, delay in obtaining material, middlemen's profits, etc. With cheaper iron, coal, and transport, lower wages and longer hours, the competition of German shipbuilders may before long cause pressure on British builders, particularly if the community of interests and amalgamations with the great iron and steel producers give a further important advantage to the Germans.

Their industries, as a whole, enjoy great advantages over British industries, not only through the circumstances mentioned already, but because their former indebtedness was wiped out by the inflation of the currency. Before the war British and German works had to carry a burden of fixed interest indebtedness in the shape of mortgage bonds, debentures, preference shares, etc., which was probably more or less identical in the two countries. The official Statistical Abstract of Germany gives the following important figures :

MORTGAGES AND DEBENTURES OF 3347 LIMITED COMPANIES