German Steel Production

[takata_1940]

I think that the best way to compare industrial capacity would be to compare the value of the industrial capital invested. Better than steel, machine tool stock, GDP, etc.

That's another example doomed to fail.
The only way to "compare" industrial capacity, is to look at the balance of "ressources" available for each war economy.
the most basic war ressources are:
1 energy
2. steel
3. manpower
The ammount of capital invested in all other infrastructures may be totally disproportionate with those basic ressources during wartime - as it is mostly based on peace time economy and this is a quite different matter.
- What is the point to have many warship without oil-fuel? (Italy, Japan..)
- What is the point to have a lot of motor-vehicle without gasoline? (Germany..)
- What is the point to have many machine-tools without enough steel or manpower? (Germany..)
- What is the point to have many field divisions that can't be manned? (Germany post 1941..)
All ressources have to be balanced in order to reflect "real war potential". Capital equipment is reflecting in no way the balance of those ressources during wartime, neither is it showing any "real" war potential.

Second to the US's Wartime Production Achievements, 6, the US industrial capital was valued in billion US$ dollars:
1939 - 39.56
1945 - 64.46

While Germany's industrial capital stock was valued in billion Rm (Wages of Destruction, pg. 442):
1939 - 56
1943 - 71

Which comparison may be usefull for comparing any increase of investments between 1939 and 1945 for USA, between 1939 and 1943 for Germany, but tell us nothing about the industrial capacity of both nation.

At roughly exchange rates of 0.50 per dollar (with was the exchange rate used by the War Production Board, Bureau of Planning and Statistics, 1944), Germany's industrial capital stock was 70.8% of US's in 1939, and the 43 stock was valued at 55.1% of the US's 1945 capital stock.

During wartime, the War Production Board, Bureau of Planning and Statistics, 1944 just had no idea of the ammount of manipulations the German did with their own money. It's reflecting nothing but a conventional data used to fill US tables of statistics.
If you want to learn a bit about German financial manipulations between 1933 and 1945, there is tons of books dedicated to this subject.

But armament production for Germany was 31 billion Rm in 1943, while the US produced 42 billion US$ in 1944, out of a stock of perhaps, 65 billion US$ dollars, while Germany had 71 billion Rm in 1943. So, every billion Rm of Germany's capital stock made 437 million Rm in armaments, while the US's industrial capital stock made 700 million US$ dollars of armaments for each billion dollars of industrial capital stock.
When comparing machine tool, for Britain in 1943, 740,000 machine tools made 11 US$ dollars of armaments, 14,900 US$ per machine. While Germany made 31 billion Rm of munitions (15.5 billion US$) out of 2,150,000 machine tools, or 7,210 US$ of armaments per machine (14,420 Rm). About half of British production. Britain was the country, out of these 3, that utilized their machines most intensively.

Which make everything you typed based on cross-comparisons only usable if you remove from it the monetary value part. The usefulness of one specific machine tool is basically the same from one country or another, then specific value can be examined, but dollars & pounds, belonging to the same monetary zone with usable changes rates, doesn't compare with Reichsmarks. Basically, money is valueless by itself, only assets may be compared but they should be taken as a part of a balanced whole.

S~
Olivier

[takata_1940]

I kept the best for the end...

Also, steel production is an imperfect guide to measure industrial production, even thought it is very useful. Today steel has lost much of it's former importance. With can be measured in their low importance to overall manufacturing production.

War economy was steel based for all industrial powers during the first half of the 20th century. Comparing this situation with today peacetime economy is like comparing it with neolithic period. It's called anachronism or simply garbage for someone who is supposed to study such things. Nonetheless, steel was not the only basic ressource for waging modern war as others were also needed.

China produces 500.5 million tons of steel (2008) while the US produced only 91.4 million tons (source: http://en.wikipedia.org/wiki/Steel_prod ... by_country). But the value of the US production is still higher than China's, producing 1,831 billion US$ dollars to 1,399 billion US$ dollars of Chinese manufacturing output. Source: (http://investing.curiouscatblog.net/200 ... s-in-2008/).

Well... this let me believe that something is seriously wrong with you.
Lets suppose that your data are exact - I won't verify them even if I know I should - and stand for generic tons of crude steel. If I need for my factory 10 tons of generic crude steel, it would have exactly the same value if I can get them from China or the United States. Only the price will change.
This is something you learn at school (at least in France) at 16 when you study basic economics: price is not value.

Even in WW2 steel didn't prove that country A had a larger industrial production than country B. The USSR produced only 8.4 million tons of steel, while Germany's empire produced 34.6 million. But USSR's industrial production wasn't 25% of Germany's. It was probably around 50-60%. Germany also had access to nearly 3 times the steel production of UK (and 4 times the capacity).

There was no Germany's empire, stop saying that. But, you just demonstrated that no data can be taken by itself, out of historical context. USSR allocated its full domestic production to armament while the USA supplied her not only with more ammunitions but also with everything she needed to support her own economy, including complete factories, pipelines, railways, rolling stock, locomotives, machine tools, etc. Germany had to sustain both without anybody else to help but relied on pillaging other countries. Then, pure comparative statistics doesn't mean anything without specific context. That's what we are trying to make you understand from months now.

The production of steel in the Altreich was smaller in the war than before it because they lost access to good quality iron ore, and hence mill productivity decreased. As result, steel was more scarce in Germany than in the US, with means that industrial demand for steel was higher in proportion to production in Germany, with means that industrial capacity in proportion to steel production was higher in proportion in Germany, and even higher in the USSR.

You just don't know what you are talking about: supply from Sweden and iron ore was not an issue at all passed few difficult months.

The USSR is an example, in 1944 their combat munitions production was 28 billion Rm, while the US produced 85 billion Rm in combat munitions.

USSR could hardly produce anything in Reichsmark, and this stand also for USA and Britain.

But the US produced 81 million tons of steel, while the USSR produced only 10 million tons. Britain, in the other hand, made ~22 billion RM in combat munitions, and their steel production was only 12 million tons, about 40% of Germany's output before bombing.
But second to the world economic survey, by 1943 Britain dedicated 80% of their steel production to the war effort, while second to the USSBS, Germany allocated 53%.

Britain, beside RM figures, was in the same position as USSR, being provided with war materiel and civil economy equipment. Then, she could allocate more of its own steel production to specific British war gears. No system isolating Britain and USSR from US steel and industrial production (added to Commonwealth and trade partners) could describe something remotedly accurate about WWII economics. But, I wonder why I have to mention it again.

S~
Olivier

[Guaporense]

I think that the best way to compare industrial capacity would be to compare the value of the industrial capital invested. Better than steel, machine tool stock, GDP, etc.

That's another example doomed to fail.
The only way to "compare" industrial capacity, is to look at the balance of "ressources" available for each war economy.
the most basic war ressources are:
1 energy
2. steel
3. manpower
The ammount of capital invested in all other infrastructures may be totally disproportionate with those basic ressources during wartime - as it is mostly based on peace time economy and this is a quite different matter.

No. "Industrial capacity" is the capacity of industry in transforming inputs into outputs. The fact that the allies had more inputs to put into their industry than the axis, doesn't mean that they had more industrial capacity (I am not arguing here that they didn't have more, but that inputs is not the same thing).

Steel production is an indicator of overall industrial capacity because it was the largest industry in the world during the first half of the 20th century (in the US, the steel industry had 12-15% of all industrial capital) and because it supplies other industries, with were very important.

All ressources have to be balanced in order to reflect "real war potential". Capital equipment is reflecting in no way the balance of those ressources during wartime, neither is it showing any "real" war potential.

I wasn't talking about " "real" war potential ", I was talking about industrial capacity. Of course, the expansion of Germany's war production was not bounded by their stock of capital equipment, but by the availability of inputs to put into their industry (labor and raw materials). So, Germany's material inferiority was primarily due to lack of inputs to use their industry than lack of industrial capital.

During wartime, the War Production Board, Bureau of Planning and Statistics, 1944 just had no idea of the ammount of manipulations the German did with their own money. It's reflecting nothing but a conventional data used to fill US tables of statistics. If you want to learn a bit about German financial manipulations between 1933 and 1945, there is tons of books dedicated to this subject.

The fact is that the prices of the same categories of munitions items in the 1940's were 2rm = 1dollar. In Germany single engine fighters cost between 80,000-100,000 rm, in the US, they cost between 40,000 to 50,000 dollars (except the P-47 with cost 85,000 dollars, but had the size of twin engine fighters). Germany's medium bombers cost 230,000 rm, in the US 110,000 dollars. Medium tanks cost between 80,000 to 120,000 rm, in the US, 45,000 to 55,000 dollars. The prices of naval construction were also equivalent to the exchange rates of 2rm per 1 dollar.

So, the exchange rate of 2 rm to 1 dollar reflected the nominal production costs of both countries. That's why they used it...

Which make everything you typed based on cross-comparisons only usable if you remove from it the monetary value part. The usefulness of one specific machine tool is basically the same from one country or another, then specific value can be examined, but dollars & pounds, belonging to the same monetary zone with usable changes rates, doesn't compare with Reichsmarks.

It doesn't in that sense, but in the sense of comparing the value of output it does because they have the price levels proportional to these exchange rates.

Also, I calculated the value of Britain and Germany's war production in terms of quantities of specific items weighted by their proportions in the wagenfuhr's index. It yielded the same proportions, with Britain's armament production of 100, Germany's output was 142.2. That's about the same as the relative value of combat munitions given by the exchange rate of 2 rm for 1 dollar (140.9 for Germany to 100 index for Britain) (discrepancy of less than 1%). However, the index of machine tool stock was 290.5 for Germany, with 100 for Britain.

So, the value of war production per unit of machine tool stock was half for Germany. That was because Germany's industry operated in single shifts (90% of the worker's worked on the first shift, 7% on the second and 3% on the third), while Britain's munitions industry operated 24 hours a day, 7 days a week.

Basically, money is valueless by itself, only assets may be compared but they should be taken as a part of a balanced whole.

Money's present value is derived from the expectation that people will value them in the future, so as to make exchange. True, money is only valued as a means of exchange for other goods. I have used monetary values to put into the same unit of measurement the volume of combat munitions production of different countries.

[Guaporense]

Britain, beside RM figures, was in the same position as USSR, being provided with war materiel and civil economy equipment. Then, she could allocate more of its own steel production to specific British war gears. No system isolating Britain and USSR from US steel and industrial production (added to Commonwealth and trade partners) could describe something remotedly accurate about WWII economics. But, I wonder why I have to mention it again.

While they imported steel, Britain and the USSR's steel supply were still a fraction's of Germany's (actually, Germany probably imported more steel from their occupied territories than USSR and Britain imported from the US). And second to Art, the proportion of steel allocated war production in the USSR was rougly the same as Germany's. In fact, Germany allocated more steel to ammunition production than the USSR allocated to all sectors of their war economy put together. Still, the value of Germany's ammunition production was smaller than USSR's total combat munitions production.

The fact is that your argument, using steel figures to prove that US's industrial capacity was larger than Germany's is wrong: "In order to address many fancy claims made lately about "Ger' could have" done this or that, "Ger' was almost equal in industrial capacity to the United States", etc., lets have a look at Germany's steel output", because the steel industry is still only one of the many segments of industry of a country (and in the US even during it's peak of relative importance, invested capital on the iron and steel industry was about 15% of the total industrial stock of the US) and accounts for at most a small fraction of the total industrial production and employment (in Germany the iron and steel industry accounted for 3.5% of industrial employment).

You could measure the relative sizes of the industrial production of each country by calculating the relative values of the steel industry and comparing the relative productions. For example, if Germany's steel industry was 40% of the size of the American during the 30's and in Germany the steel industry represented 10% of the value added of the industrial sector, while in the US the steel industry represented 15%, Germany's industry would have 60% of the size of the American.

Do you have the numbers of the valued added by the US steel industry respect to total industry and Germany's? If you do, you can make some more precise comparison of industrial output for the period considered.

[Guaporense]

I have some data on that, in 1938 Germany's GNP was 104 billion Rm. The employment in industry represented 28% of total employment, and since productivity in industry was higher than in the rest of the German economy, added GNP probably accounted for 35% of total GNP. While sales of raw steel were 1,935 million rm, or 1,86% of Germany's GNP. So, steel sales in proportion to industrial product were 5.3% of the value of industrial product in Germany.

In the US in 1929, steel prices were 40 dollars per ton (in 1939 it fell to about 35 dollars per ton), while production was 55 million tons, with gives total steel sales at 2.2 billion dollars, while GDP was 103 billion dollars. Industrial production employed 25% of the labor force, while the difference in productivity between industry and other sectors of the US economy were smaller than in Germany, so US industry probably accounted for 30% of their GNP. So, in the US the steel industry's sales were 6.1% of the added GDP of industry. The discrepancy between GDP and GNP was usually in the order of 1% for the time period considered, so we can use both as if they were the same for the rough comparison that we are making.

Since between 1929 and 1938 US's industrial production fell by about 20% (source: http://en.wikipedia.org/wiki/File:1930Industry.svg), in 1929 US industrial production was valued in steel equivalence terms, as 210% of Germany's 1938 industrial production, in 1938 that number would be 168%. Or, in 1938 Germany's industrial production was 59.4% of the US's. Between 1938 and 1944, the US's industrial production grew more than Germany's, but stayed in the 40-50% level by 1943-44.

[takata_1940]

I think that the best way to compare industrial capacity would be to compare the value of the industrial capital invested. Better than steel, machine tool stock, GDP, etc.

That's another example doomed to fail.
The only way to "compare" industrial capacity, is to look at the balance of "ressources" available for each war economy.
the most basic war ressources are:
1 energy
2. steel
3. manpower
The ammount of capital invested in all other infrastructures may be totally disproportionate with those basic ressources during wartime - as it is mostly based on peace time economy and this is a quite different matter.

No. "Industrial capacity" is the capacity of industry in transforming inputs into outputs. The fact that the allies had more inputs to put into their industry than the axis, doesn't mean that they had more industrial capacity (I am not arguing here that they didn't have more, but that inputs is not the same thing).

Industry -transforming inputs into outputs- is a function (call it function F) where: F(input) -> output; and F(0) -> 0. So output is always proportional to input until max (built in F) is reached. Now, whatever capital equipment your industry have, without input of basic ressources, your output will be nil. Get it?
As "capacity" is rated from output level (function result), it doesn't matter if low output is due to lack of capital equipment or lack of basic input: function result is exactly the same. Then isolating capital equipment from inputs is fallacious. With water, one can live forever in desert but die in few hours without. How long one capacity to survive in desert would be estimated is related to his water supply and not by supposing that he's got an unlimited water reserve.

Steel production is an indicator of overall industrial capacity because it was the largest industry in the world during the first half of the 20th century (in the US, the steel industry had 12-15% of all industrial capital) and because it supplies other industries, with were very important.

We are talking about war economy in the 1940s, not "economy in a vaccuum"...
In case you never noticed it, steel was the primary component behind anything needed for war: engines, hulls, weapons, shells, bullets, constructions, locomotives, wagons, machine-tools, etc.
Germany had reached maximum steelmaking capacity of 25 million tons (1st quarterly 1939) while USA had 2 times this capacity in 1939 that grew to 3 times in 1941. Germany steel output was moreover limited by many "input" problems which caused her output declining following war breakout.
This explain why steel allocation for German industrial and war programs was piloted at the head of the state and everything depended on it. They did not made a central "machine-tools comitee" which piloted every other sectors; neither Wehrmacht's people did ask for more "industrial capacity" but for more steel allocations in order to conduct their own armament programs.

All ressources have to be balanced in order to reflect "real war potential". Capital equipment is reflecting in no way the balance of those ressources during wartime, neither is it showing any "real" war potential.

So, Germany's material inferiority was primarily due to lack of inputs to use their industry than lack of industrial capital.

Depend which sector is looked at. Germany's Transport Sectors might have been short of capital investment in order to cut down manpower intensive activities (handlings) and the whole system look to be bogged down from before the war.

During wartime, the War Production Board, Bureau of Planning and Statistics, 1944 just had no idea of the ammount of manipulations the German did with their own money. It's reflecting nothing but a conventional data used to fill US tables of statistics. If you want to learn a bit about German financial manipulations between 1933 and 1945, there is tons of books dedicated to this subject.

The fact is that the prices of the same categories of munitions items in the 1940's were 2rm = 1dollar.
...
So, the exchange rate of 2 rm to 1 dollar reflected the nominal production costs of both countries. That's why they used it...

Which nonetheless is complete garbage as not a single serious study might reveal that German fixed prices for war gear orders might reflect anything "real" about "production cost" or "monetary value"; which is certainly not the case in US/British rated price for their own war gears. You'll have this exact same problem when comparing ammunitions in roubles and dollars, or Reichsmarks and roubles.

Which make everything you typed based on cross-comparisons only usable if you remove from it the monetary value part. The usefulness of one specific machine tool is basically the same from one country or another, then specific value can be examined, but dollars & pounds, belonging to the same monetary zone with usable changes rates, doesn't compare with Reichsmarks.

It doesn't in that sense, but in the sense of comparing the value of output it does because they have the price levels proportional to these exchange rates.

You just tell nothing about "value of output" here; not a single piece of equipment was comparable in term of fabrication costs, value of wages in national market, and everything that can make any comparison valueable. All you do is vaguely comparing "arbitrary prices" without any knowledge on what they were based on.

Also, I calculated the value of Britain and Germany's war production in terms of quantities of specific items weighted by their proportions in the wagenfuhr's index. It yielded the same proportions, with Britain's armament production of 100, Germany's output was 142.2. That's about the same as the relative value of combat munitions given by the exchange rate of 2 rm for 1 dollar (140.9 for Germany to 100 index for Britain) (discrepancy of less than 1%). However, the index of machine tool stock was 290.5 for Germany, with 100 for Britain.

Yes, and you would have exactly the same result if the Reichsmark was quoted $ 2 or $ 2,000... RM prices are still reflecting proportional costs between German expenditures, and will also do the same trick with 10,000,000 RM worth 1 £. It just doesn't tell you what their respective "value" was.

So, the value of war production per unit of machine tool stock was half for Germany. That was because Germany's industry operated in single shifts (90% of the worker's worked on the first shift, 7% on the second and 3% on the third), while Britain's munitions industry operated 24 hours a day, 7 days a week.

Which constatation by itself should give you some clue and make you think in much more reserved terms about "comparable production costs" in Germany and Britain (or USA).

Basically, money is valueless by itself, only assets may be compared but they should be taken as a part of a balanced whole.

Money's present value is derived from the expectation that people will value them in the future, so as to make exchange.

Yes, then you should like to verify what future "value" people in Germany accorded to their currency in 1944 before claiming such fallacious rates implying GIGO-istical comparisons. All they will end with was big piles of valueless paper.

S~
Olivier

[RichTO90]

The fact is that the prices of the same categories of munitions items in the 1940's were 2rm = 1dollar. In Germany single engine fighters cost between 80,000-100,000 rm, in the US, they cost between 40,000 to 50,000 dollars (except the P-47 with cost 85,000 dollars, but had the size of twin engine fighters). Germany's medium bombers cost 230,000 rm, in the US 110,000 dollars. Medium tanks cost between 80,000 to 120,000 rm, in the US, 45,000 to 55,000 dollars. The prices of naval construction were also equivalent to the exchange rates of 2rm per 1 dollar.

Sigh...I hesitate to get involved in this extended exercise in inanity, but this is just getting too silly.

The "prices" supposedly "paid" for individual items of US equipment are nothing of the sort. Typically these are derived by juvenile undergrads by taking the figures for total contract amounts paid and dividing it by the number of each item. They are then posted at fonts of wisdom like Wikipedia for all and sundry to ooh and aah over.

Unfortunately that is not what those prices actually reflect. The problem is, those are contract costs that include capitol costs, but that do not include certain government supplied items of issue...such as radios and armament (which was counted separately). Even better, contract payments varied from year to year and "cost plus" accounting meant that the final "price" paid on a contract was different from what was contracted initially. Actual Army and WPB attempts to derive individual equipment item "prices" show so much variability as to be almost meaningless. For example, the contract "price" of the M4 Medium Tank varied from about $47,000 to $85,000, depending upon when the cost was assessed and what was included as part of the cost. I might also wonder why in his list of "armored production by weight" GIGO is so selective in his accounting? Why include American armored cars but not German? Why is the T23 not counted? Armored halftracks?

The German accounting is just as suspect, although for different reasons.

It s barely possible to compare program costs, but then that gets into questions as to what those program costs included. For example, the American program costs included construction of three brand new tank arsenals, Chrysler (Detroit), Ford (Detroit), and Fisher (Grand Blanc), each with greater capacity than the single German wartime tank arsenal built, the Nibelungenwerke.

Anyway, here is an "old" post of mine on the subject, from last year , maybe it's too much to expect that GIGO do a little homework before his little eructions? ...

""On 30 June 1940 the National Munitions Program was enacted, which among other authorizations approved the building of 1,741 M2A1 Medium Tanks, the project to be completed by 31 December 1941. Initial contracts were issued to American Locomotive Company and Baldwin Locomotive Company. However in June a member of the National Defense Advisory Commission, William S. Knudsen, President of General Motors, argued that the automobile manufacturers also had the capability of producing tanks (in Germany Daimler-Benz was already proving this was true). Between 17 June and 17 July 1940 negotiations went on that resulted in a contract to build a Chrysler Tank Arsenal at Detroit, Michigan for a projected cost of $21-million and an output of 10 tanks per day (roughly 220 per month based upon the then still standard five-day work week). The contract was signed on 15 August, with the intention of building 1,000 M2A1 Medium Tanks, the remaining 741 to be built by American and Baldwin." (from my incomplete history of US Army tank production in World War II) So you see the "cost" was actually $21,000 each for the 1,000 M2A1...but included the cost of building the factory to build them in.

Here is the information I have found on the cost of tanks. It is important first though to realize that, just as German “price” information on tanks did not include some items of the final equipment (including radios), US prices are for the tank without armament (and usually without the various items of “kit” that were added as stowed equipment prior to unit issue.

In September 1942 the 8th Report of the Army Service Forces Army Supply Plan was filed, which included some detailed information on the procurement plans, including the then current estimated costs, on “important” items of equipment.

Tank, Light, M3, M3A1, M5, M5A1 - $50,000
Tank Medium, M3 and M4 - $82,723
Tank, Heavy (undesignated) - $152,346

Gun, Tank, 37mm M5 and M6 - $1,425
Gun, Tank, 57mm - $5,500
Gun, Tank, 75mm M2 and M3 - $3,350
Gun, Tank, 76mm M1 - $3,500
Gun, Tank, 3” Heavy - $8,600

To compare the gun prices to the guns with carriage for use as antitank guns we find they are:
37mm - $3,480
57mm - $9,420
76mm - $21,300

Others are:
Gun, 40mm AA, mobile - $17,830
Gun, 3” AA, mobile - $37,500
Gun, 90mm AA, mobile - $43,800
Gun, 90mm AA, fixed Anti-MTB Mount - $23,000
Gun, 4.7” (120mm) AA, mobile - $151,000

Machine gun cost estimates were:
MG, caliber .30, M191A4 (fixed and flexible) - $350
MG, caliber .50, M2 HB (fixed and flexible) - $1,050

The “Gun, Tank 3” Heavy” was a “one-off” adaptation of the old 3” AA gun and only seven were completed, likely the reason for the higher cost.

The same applies to the 76mm AT gun, which was the designation for a uncompleted design study for a completely new weapon. In practice it was decided in 1943 that it would be cheaper to produce the 3” gun on the 105mm M1 carriage as an AT gun, so again, a much higher cost is estimated.

These prices gradually changed in subsequent editions. A summary of equipment costs dated 29 April 1944 gives the following representative costs:

Tank, Light, M5 and M5A1 - $37,560
Tank, Medium, M4 - $58,197
Tank, Heavy (undesignated) - $325,368

The “Tank, Heavy” was in fact the M1, later re-designated as the M6. Only 40 were completed, so again the high relative cost for a limited procurement item.

Aircraft Cannon, 75mm - $4,500
Gun, 40mm AA, with carriage - $13,100
Machinegun, caliber .30 - $147
Machinegun, caliber .50 - $323

Finally, unit prices given for VJ-Day 1945 in a 1951 Army summary of costs were:

Tank, Medium, M4A3 - $47,339
Tank, Medium, M4A1 - $55,145
Tank, Light, M24 - $39,652
Tank, Medium M26 - $81,324

Note that the cost of the “standard” M4A3 was the lowest, which is logical given that it was the largest type under procurement at the time.
The real problem is that such cost-based "comparisons" are meaningless because they ignore a significant number of points.

The US was able to afford the material cost, labor cost, and capital cost of their tanks, while the German economy placed severe limitations on each cost factor. The Germans for example, built a single large-scale, purpose-designed tank assembly plant, Nibelungenwerke, the Americans built three such plants, all larger than the German plant. Construction of Nibelungenwerke was begun in 1938/1939 and it was operational in 1942, the first US plant, the Chrysler Detroit Tank Arsenal, was contracted for 15 August 1940 and began serial production in April 1941.

The US "costs" are final contract prices and include cost of labor, material, and capital amortization. For example the $21-million cost of the Detroit Tank Arsenal, $25,782-million cost of the General Motors Tank Arsenal (Fisher Body, Grand Blanc), and the $39-million cost of the Ford Tank Arsenal are included as well as conversions costs for the numerous heavy manufacturers that converted plants from peacetime to wartime production (American Loco, Baldwin Loco, Federal Machine, Lima Loco, Pacific Car, Pressed Steel Car, Pullman Standard, and many others).

So yes, an estimate of 800,000 RM for a Tiger versus $81,324 for an M26 may be reasonable. "

[bf109 emil]

You just tell nothing about "value of output" here; not a single piece of equipment was comparable in term of fabrication costs, value of wages in national market, and everything that can make any comparison valueable. All you do is vaguely comparing "arbitrary prices" without any knowledge on what they were based on.

this is not true as a Tiger 1 tank was sold to japan...Henschel charged Japan 645.000 Reichsmarks for fully equipped Tiger (with ammunition and radio equipment), while the regular price for the same Tiger was only 300.000 Reichsmarks....a simply computing of yen to RM would indeed show either fabrication cost, in this case 300,000RM and that which an Ally was willing to pay, i.e. japan at 645,000RM

the "arbitrary price" in question is what Henschel sought as compensation for a Tiger tank, which was to Germany a sum of 300,000 RM

[Andy H]

Hi Olivier

You posted the following:-

Here is a first table showing the total German controlled Steel output from 1938 to 1944:
. 1938: 23,329
. 1939: 23,733
. 1940: 21,540
. 1941: 31,822
. 1942: 32,128
. 1943: 34,644
. 1944: 28,499
(x 1,000 metric tons; source: USSBS Report "The Effects of Strategic Bombing on the German War Economy".)

I found this whilst looking into German production figures regarding Allied bombing thread etc etc

. 1939: 23,733
. 1940: 21,540
. 1941: 28,233
. 1942: 28,744
. 1943: 30,603
. 1944: 25,853
(x 1,000 metric tons; source: Deutches Institut fur Wirtschafsforschung, Die deutsche Industrie im Kriege 1939-45 by Duncker und Humblot, Berlin 1954 and reproduced in War, Economy & Society 1939-45 by the historian Alan S Milward, published by University of California Press 1979

These differences are quite marked at
1941: 3,589
1942: 3,384
1943: 4,041
1944: 2,646
respectively, and in total equalling 13,660 x 1,000 metric tons

Are your figures a more upto date than that of Milwards reproduction of the earlier German work?

Regards

Andy H

[Guaporense]

So yes, an estimate of 800,000 RM for a Tiger versus $81,324 for an M26 may be reasonable. "

Well, since calculating equipment prices is complicated, use instead the prices of basic commodities, like bread and steel. In Germany, steel prices in 1938 were 83 Rm per metric ton, while in the US in 1941 to 44 they were fixed as 52.82 dollars per metric ton.

I don't have data for Germany for the war years, but the consumer price index increased by 9% between 1938 and 1944. Them the exchange rate in steel terms converted by the cpi would be 58 cents per reichmark.

That's higher than the overall German price level because the German iron and steel industry was highly productive in comparison to other sectors of the German economy.

Compared steel prices (rm for Germany and US$ for the US):

----------Germany-------US

1929 ---- ----- ------- 42.33
1934 ---- 69.4 ------- 39.90
1935 ---- 74.4 ------- 39.68
1936 ---- 73.2 ------- 42.33
1937 ---- 78.4 ------- 55.91
1938 ---- 83.1 ------- 54.21
1939 ---- ----- ------- 50.95
1940 ---- ----- ------- 50.73

And going all the way of steel, why not? :

GNP in terms of steel (mt of steel):

US in 1929 ----------- 2,411.3
Germany in 1934 --- 958.2
Germany in 1935 --- 1,079.8
Germany in 1936 --- 1,128.4
Germany in 1937 --- 1,188.8
US in 1937 ---------- 1,617.7
Germany in 1938 --- 1,257.5
US in 1940 ---------- 2,103.4
US in 1970 ---------- 6,451.0

Per capita income in terms of steel:

US 1929 ----------- 19.6 tons
Germany 1938 ---- 18.3 tons
US 1940 ----------- 15.6 tons
US 1970 ----------- 31.7 tons

Sources:

Germany prices and GNP: War and Economy in the Third Reich
US prices: U.S. Geological Survey, 1999, Metal Prices in the United States through 1998.
US GNP: http://robjhyndman.com/TSDL/cnelson/gnp.dat

[Guaporense]

These differences are quite marked at
1941: 3,589
1942: 3,384
1943: 4,041
1944: 2,646
respectively, and in total equalling 13,660 x 1,000 metric tons, Are your figures a more upto date than that of Milwards reproduction of the earlier German work?, Regards, Andy H

The difference is explained by the fact that your figures measure the output of the Reich. While Takata's figures measure the output of the Reich plus France, Belgium, Netherlands, Poland, etc.

[RichTO90]

Well, since calculating equipment prices is complicated, use instead the prices of basic commodities, like bread and steel.

Quite a dodge, but then I expected nothing else.

You made the claim that "The fact is that the prices of the same categories of munitions items in the 1940's were 2rm = 1dollar". But the simple fact is that your "fact" is nothing of the sort. Nor does changing your inane assumptions from complex weapons systems to steel, bread, or any other "basic commodity" (why not beer or cheese?) affect that.

[bf109 emil]

You could measure the relative sizes of the industrial production of each country by calculating the relative values of the steel industry and comparing the relative productions. For example, if Germany's steel industry was 40% of the size of the American during the 30's and in Germany the steel industry represented 10% of the value added of the industrial sector, while in the US the steel industry represented 15%, Germany's industry would have 60% of the size of the American.

this is wrong as you are not equating into the fact that 2/3 of the US steel plants where shut down in the USA and when opened it represented an increase of 200% more steel available then what was currently being smelted in the 30's.

Hence your figure of Germany having 60% of the size of american steel industry is correct, until these plants which where off line came into production and suddenly Germany's 60% falls to around 20% or 1/5 of the industrial capacity of the USA. In simple lamens terms, the USA was apt and able to outproduce Germany some 5to1 in terms of steel output alone.

Or, in 1938 Germany's industrial production was 59.4% of the US's.

Yes and also in 1938, Germany's steel industry which was operating at nearly 100% capacity had little room for expansion as against the USA, which was operating at only around 33%. source Paul Kennedy Rise and fall of great powers

[Andy H]

These differences are quite marked at
1941: 3,589
1942: 3,384
1943: 4,041
1944: 2,646
respectively, and in total equalling 13,660 x 1,000 metric tons, Are your figures a more upto date than that of Milwards reproduction of the earlier German work?, Regards, Andy H

The difference is explained by the fact that your figures measure the output of the Reich. While Takata's figures measure the output of the Reich plus France, Belgium, Netherlands, Poland, etc.

Hi

The figures I quoted from Milward were for Steel Production within Greater Germany, so that would include Poland but not the others

Regards

[takata_1940]

Hello Andy,

These differences are quite marked at
1941: 3,589
1942: 3,384
1943: 4,041
1944: 2,646
respectively, and in total equalling 13,660 x 1,000 metric tons, Are your figures a more upto date than that of Milwards reproduction of the earlier German work?, Regards, Andy H

The difference is explained by the fact that your figures measure the output of the Reich. While Takata's figures measure the output of the Reich plus France, Belgium, Netherlands, Poland, etc.

The figures I quoted from Milward were for Steel Production within Greater Germany, so that would include Poland but not the others

Greater Germany (Grossdeutschland) should include by 1941:
Altreich (1937), Austria, Sudetenland, Memel, Annexed Polish districts (Danzig, corridor, Upper Silesia - but not the General Government part of Poland), Belgian annexed Eupen-Malmédy district, Luxemburg and French annexed Alsace-Lorraine.

Figures will differ by counting none, some or all those territories:

_steel.jpg

(Note: Austria is included in Altreich 1937)

S~
Olivier