Is he basically saying that the Germans he encountered in America, who arrived as immigrants, were in his opinion ignorant and degraded people. So that when he travelled to Germany, he was surprised to find that the German people in their own country were intelligent, industrious and well presented? So he concludes that Germany must have sent their worst to the United States and kept the best in Germany.
If that's what he meant to say, then I guess it's a somewhat obnoxious point of observation to make. But it's hardly Earth shatteringly racist, especially for its time. Early Watchtower literature is absolutely full of national and racial stereotypes, as was entirely typical for the period. I'm sure there are lots of worse examples, about Germans and others.