1. The costs cannot be lowered. The largest part of the goods consumed in the manufacture of comwadities in China fas to be import-because of the undeveloped condition of the country. Chinese eoton is of short staple and therefore Indian, American and sometimes! cotton to be import.
This is true in spite of the fact that cotton is now a stapl agricultural product of the country. The likin tax and excessive and illegal taxes often brings the cost of the native product beyond commercial value and makes more profitable to export it to country having a higher standard iving and therefore a higher cost capacity than China—Japan, for instance. This condition ob-
Roads and Bu: Power 2 It is impossible to improve the market in certain manufacturered commodities because of lack of communications and lack of purchasing power of the people. may not be generally known, but. every firm pushing important' com. modities carries certain markets at A total loss at the present time in 1 the hope of developments in the future. These losses cannot _be added to the price of the commodity elsewhere, as the market will not bear the increase, because of the general standard of living, which is determined not upon industrial but agricultural incomes. The loss has to be added to the cost of production and taken out of possible pro-(fits. In many cases, the cost of! transportation is so high as to vitiate any possible profits, The! manufacture has then to make his profits in limited areas and on the basis of a more or less a static marketing price.
Under such conditions, strikes and sudden increases in the cost of} Production will tend to destroy industry. Capitalists will find it more safe and more advantageous to invest their money in real estate, foreign bonds and moneylending than in industry, Any. country which exists on -auch an economic basis is not safe, as must, be evident from the condition of the frane on the money markets of the world in spite of France's victory. in the Great War. Such a country. lacks the economic independence to, cope with Powers which are possessed of great industries. Gre Britain's political pre-eminence 1 not based upon polities but upon steel and textiles. Germany's marvellous recovery is not due to Ger-. man soldiers but to German manufacturing abilities. The relationship. between industry and political me dependence ig becoming constantly clearer as the aftermath of the Evropean war focusses attention!
the essential characteristics of the different nations.
Text read from the printed page and cleaned; old type leaves the occasional error.