(Covers May, 1940 - February,1941 German conditions)    
 
                                                            
 
 
l. After the French collapse, the belief was general that the war was   
over and this brought a heavy reaction on the Stock Exchange and also a halt   
in retail buying to wait for "peace qualities". No considerable changes in   
organization took place during the period because everything functioned so   
well. Complaint of over-organization. "'For each of these a new man appears   
in the works, begins more often than not with the same questions as his   
predecessor and ends with the same enquiries as his successor who comes in as  
he goes out.'" The shift was towards industrial self-government with cartels   
(some private and some compulsory) controlling prices and allocations. Cartels   
control cellophane, glass, salt and cement. The tendency is toward pushing out   
                      small business.                       
 
                                                            
 
 
2. The National Compensation Levy is mainly assessed on gross receipts at  
a uniform rate and amounts to about $300 million. The fund is used to carry on  
closed concerns whose net working capital is not enough to carry, spread over  
three years, reasonable fixed charges so that the concern can open again with  
peace. This is provided the firm is worth conserving. ".....the following   
definition of a firm 'not worth conserving': 'a firm with obsolete equipment   
and working at a loss provided there is no national interest attached to its   
continued existence.'" Standardization is proceeding: 400 types of meat tins   
to 36, 150 sausage tins to ll, 70 kinds of floor polish to 4, cement may not   
be transported over 175 miles. A legal obligation is imposed on scrap owners   
    to sell and for steel works to buy at a fixed price.    
 
                                                            
 
 
3. From the beginning of the war until the fall of 1940, 3,000,000 workers  
drawn into production. Of these, 1,000,000 are prisoners of war and 200,000   
free foreign workers. Men in distribution have been cut by 50%. Labor conscription  
accounts for 1,000,000, including 150,000 women. Skilled workers are allotted  
and no firm is allowed more than absolutely needed. Contrasting with England,  
it is said: "'where the supply of skilled men is held up by the lack of labor  
statistics, so that even at this stage they have to make statistical enquiries  
to find the metal workers not engaged in armaments,' whereas in Germany 'it is  
now possible simply to order firms to train a specified number of skilled men  
beyond their own requirements.'" It has been found better to train men in the  
factories rather than in schools. Wages are slightly upward, not through   
          increased rates but by tax arrangements.          
 
                                                            
 
 
4. The price control is working fairly well but not perfectly and it is   
    said that the official cost of living figures differ    
 
                                                            
 
 
                            -5-