Economic essays

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Identifikator:: 1753623200

URN:: urn:nbn:de:zbw-retromon-136107

Document type:: Monograph

Title:: Economic essays

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1927

Scope:: viii, 368 S.; Ill., graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

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Title:: The farmers' indemnity / Alvin S. Johnson

Collection:: Economics Books

218 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK II 1 he economic mechanism of indemnity payment has been s0 fully described in recent years that the tribe, once numerous, who imagine that the Germans have only to send out cash or checks is virtually extinct. Everyone knows now that an indemnity must be paid in goods. Year by year—when the Dawes plan is in full operation—the German people will have to send across the national borders iron wares, textiles, chemicals, coal, potash and a thousand and one varieties of other goods, to the value of $625,000,000, and will receive in return nothing but receipts applicable to the indemnity account. Year by year the American farmer sends to the cities wheat and meat, milk and eggs and vegetables, cotton and tobacco, wool and sugar, to the value of more than $700,000,000, and he receives in return nothing but interest receipts, In order to keep up this commerce of goods against receipts he Germans have to lower their standard of living; extend their hours of labor; do without extensions of plant from which only remote, if rich, returns are to be had; avoid “unproductive” expenditures, such as new churches, schools, museums, scientific laboratories. In order to keep up his interest payments the American farmer likewise has to consume less, work longer hours; avoid improvements such as orchards and forest tree plantations that cannot yield prompt returns; cut his contributions to the rural church; vote against good roads and other public improvements. - = The natural effect of the German indemnity is to stimulate overproduction of export commodities. Markets that would otherwise have been sufficiently supplied at remunerative prices now receive a plethora, to force prices to a lower level. At lower prices the Germans have to send out more goods. They are forced to whirl round faster and faster in a vicious circle of production and prices. The case of the farmer is similar. To make his interest payments he is forced to put every available acre into cash crops. If his wheat land is not altogether worn out he puts it into wheat, although under the canons of good illage it ought to rest for a year or two under clover. If all his land is fit for cotton, he plants it to cotton, though a part of it, set aside for grass and fodder, would supply his household with

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