-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