November 1920
1206
GERMANY.
There is no index number by which price
fluctuations in Germany may be traced for
the period of the war or the period since the
armistice, nor has it been easy since 1914 to
find complete series of price quotations. There
is, however, some interesting material available on the prices which have been fixed by
the German Government since the beginning
of the war. The most valuable sources available on this subject are articles on "Laws
affecting the Economic Situation" by Johannes
Muller, and other articles in the Jahrbiicher
fur Nationalokonomie und Statistik, articles
in the Frankfurter Zeitung, and decrees published in the Reichsanzeiger. Unfortunately,
however, the files of these periodicals are incomplete for 1916 and 1917 and there are gaps
which it is impossible to fill.
Price fixing in Germany began with a law
of August 4, 1914, which authorized the
Government to fix maximum prices for articles of daily necessity, especially food and
fodder of all kinds, as well as for raw materials,
and materials for heat and light. Violators of
the price regulations were made subject to a
fine of 3,000 marks or to 6 months' imprisonment. (The penalties were later increased.)
Maximum prices were first set for the cereal
crops, then for other agricultural products,
and for metals. By the end of March, 1915,
maximum prices were fixed for wheat, oats,
rye, barley, bran, potatoes, sugar, wool and
wool products, ammonia, aluminum, aluminum
products, antimony, old bronze, copper, copper
products, old brass, brass products, nickel,
nickel products, bronze, and tin. Price regulations increased from that time on, and maximum prices were also fixed for butter and
margarine, oil seeds and vegetables (peas,
beans, lentils, cabbages, carrots, and so on),
for meats, flour, macaroni, marmalade, fats,
news print paper, matches, fertilizer, chemicals,
cement, coal, and iron and steel products.
The Government tried in all cases to fix
prices in relation to production costs. German writers on the subject, in criticizing
the system of maximum prices, say that in
some cases the set price was dictated from
Berlin without proper consultation with experts in the industry concerned. In theory,
however, the fixed price was based upon a
"just price" submitted by the producers of
the article in question. This "just price"
was calculated as follows: The cost of production (including purchase of raw materials,
management expenses, general charges, interest on capital, compensation for risk, and
wages of management) was subtracted from
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the proposed price, and if the difference (the net
profit) did not exceed what was considered
lair and suitable profit in the business before
the war, the price was considered just. German business men have pointed out that
interest on capital invested, the compensation
for risk, and the wages of management are
very difficult to define. In the case of commodities where it seemed impractical to set a
maximum price, merchants were often required to prove their profits "just" before the
courts upon the basis just explained. The care
with which such prices were controlled is illustrated by a decree of January 25, 1917, which
states that charges for shoe repairing may only
be high enough to yield, in consideration of the
costs, a suitable profit, and that excessive
charges may be redressed by an appeal to the
courts.
Of the prices fixed by the Government,
those first and most thoroughly applied were
the prices for the cereal crops. On November
6, 1914, the Bundesrat fixed prices for oats for
32 different cities, the price for different regions
of the country to be that of the nearest city
of the 32. In December prices for wheat, rye,,
and barley were also fixed by the same method.
Prices for the region of Berlin have been as
follows:
Wholesale cereal prices—Germany.
[In marks per ton.]
[Region of Berlin.]
Government prices.
Aver-1
age, Dec.
1913.
Rye...
Wheat
Oats..
Barley
For the crops of—
24-31,
1914.
164 220
199 I 260
162 214
156 220
1915
1916
1917
1918
220
260
300
300
220
260
300
300
270
290
270
270
305
325
300
300
1919 1920 *
405
455
405
1,400
1,5401,350^
1,350
1 Statistisches Jahrbuch fur das Deutsche Reich.
2 Minimum price.
Prices for the 1920 crop were originally
fixed at 1,100 marks per ton for wheat, and at
1,000 marks for other grains, with the promise
that an index number for costs of production
should be calculated and prices revised, if
increased costs warranted it. The index
number was made, taking costs in January r
1920, as 100. It rose to 169.24 as of June 1,
and the Government accordingly fixed the
prices indicated in the above table.
Price regulations for agricultural products
were as a rule enforced b}^ a war committees"
appointed for the purpose. Prices for industrial products were sometimes regulated simply
by committees, but as the war progressed,,