-4- her exports, in exchange for the one American product which her economy vitally needs m d must have even at premium prices, she will have made a very good trade bargain indeed, on top of her gross discrimination of American nationals. In the extraordinarily difficult position in which Germany finds herself because of her prevailing balance of payments, Germany will be compelled to strain herself to the utmost to rigorously curtail imports. If, despite this fact, she is willing to pay premium prices for American cotton, it is clear that this import is of extraordinary value to her. Were it not for the fact that we have a commodity such as cotton, which is so essential to the economy of Germany, it would be quite impossible to adopt this peculiar device by means of which exports from Germany to the. United States are, in effect, subsidized. It is to be noted that while the proposed plan, on the one side, is said to facilitate cotton exports to Germany because more dollar exchange will be made available to Germany through her additional exports to this country under the proposed subsidy, on the other side cotton exports to Germany are, under the plan, penalized by the premium price of 22-1/2 percent which must be paid. It is by no means certain that the disadvantages of the premium price may not outweigh such advantage as may accrue from the expected increased dollar exchange made available to Germany through increased exports to the United States. If |