It is the Germans' aim that Rumania shall remain a country given over to arable farming and the production of minerals and oil: there is no place for industrialization in their scheme of things.
As regards the far-reaching effects of German trade policy, the terms of trade which German price policy allows are not as favourable as export prices suggest. Based on 1912, with imports calculated c.i.f. and exports fob. this index shows the average of all import groups at 4,146, and the average of all export Btoups at 2,432.
The Rumanian cost of living increased by 25.7 per cent. between February, 1937, and February, 1939, and by 49 per cent. in comparison with July, 1934. The per capita consumption of meat, and sugar, textiles and articles of clothing is declining, and this trend is borne out by available indices of real wages.
It is evident that the German policy of buying large quantities of produce at high prices, supported on the Rumanian side by generous export subsidies to the free-exchange countries, is having the double effect of creating a shortage in the home market and an increase in the cost of living.
The Germans would thus seem to be achieving their end of keeping Rumania a purely agricultural country, while enjoying the advantage of satisfactory terms of trade and without incurring the odium that would fall on them if the effects of their policy were generally realized.
Text read from the printed page and cleaned; old type leaves the occasional error.