Germany's Resources Under the Blockade
WHEN the German government brought forward its proposals for a big navy, it received the energetic support, by speech and pen, of many university professors, and among them of almost every economist of repute in the country. That this was so was a patent and conspicuous fact. The political opposition resented their appearance in the party arena, and dubbed them ‘Professors of the Fleet ’ (Flottenprofessoren), But their arguments quite certainly carried great weight with the educated classes, especially in administrative and official circles; and they themselves were afterwards proud of the part they had taken. One of the most widely read of them all, Professor Lamprecht, after eulogizing the Emperor in his History for the energy with which he set about converting the nation, adds, with emphasis, ‘His banner was followed, withcomplete understanding, before all others and from the very start, by the academic teachers of the nation.’
I start by calling attention to the considerable part played by the professors, not at all by way of criticism, but simply to secure attention for their arguments; and to these we must now turn. They are most readily accessible in two volumes of speeches and essays, published in 1900 with the title Handelsund Machtpolitik (Politics of Trade and Power), under the editorship of Gustav Schmollcr, Max Sering, and Adolph Wagner,’Professors of the Political Sciences at the University of Berlin.’ The conjunction of these names is significant, and especially the alliance of Professors Schmollcr and Wagner, the influential leaders of two very different and not always very friendly schools of economists. For while Professor Schmollcr has been for many years the most conspicuous figure among writers of the historical school, Professor Wagner for a like period has been the chief representative in Germany of economic theory.
Most of the arguments of both volumes centred in the proposition that till Germany could protect by her own fleet her oversea trade—then, as now, some 70 per cent of the whole — her economic position was insecure and at the mercy of any power which could control the seas. I will quote a few passages; and in view of the language now being used in Germany about the effect of British sea-power on German foodsupplies, I would call special attention to the references to this particular aspect of the subject. They will show that the danger Germany has since incurred was fully anticipated; and that there was no thought of assistance from the doctrine of conditional contraband.
Listen first to Professor Schindler:—
‘However optimistically wc may think of our agricultural progress, we shall remain a people which needs to import foreign foodstuffs; and therefore our existence is threatened if we are not powerful at sea.’
And again: —
‘The denser our population becomes, the more we must increase our exports, if only to pay for our imports of food, materials, and colonial produce.’
Next turn to Professor Wagner: —
‘Until we have a powerful fleet we are not sufficiently secured against the very real dangers of a hostile blockade, with all its grievous consequences for our import and export trade, for the feeding of our people and the employment of our workmen.’
Of the contributions by less generally known writers, two were especially devoted to the elaboration of the same thesis. One was by Dr. Ernst Francke, the much respected organizer of the moderate social-reform movement and editor of Soziale Praxis. The following quotation will be enough: —
‘With the exception of the building trade, there is no great German industry not dependent to a considerable extent on exportation of its products across the seas. ... It is certainly not exaggeration when we conclude that altogether some twenty-four to twentysix millions of people in Germany [out of a population then of fifty-six millions] are dependent for their livelihood and employment upon the unimpeded inward and outward movement of commodities on the sea routes. Keeping the sea open and the continuance of German competition in the markets of the world are, therefore, questions of life and death for the nation, and they concern the laboring masses in the very highest degree.’
The more detailed working-up of the argument was intrusted to a younger economist, Dr. Paul Voigt, a man of great ability too early lost to his country. At the end of his survey he exclaims, —
‘Almost four milliards of absolutely indispensable imports — materials, half-finished goods, and food which, in the main, reach us by sea! ’
And he concludes: —
‘Considering how vastly the economic life of the nation is dependent on foreign trade, there can hardly be any doubt that a blockade which lasted any considerable time would bring Germany into subjection.’
Such was the contention with which in 1898-1900 the economists of Germany came to the support of the government’s naval programme. Germany to-day, in spite of her fleet, is precisely in the position they pictured before the fleet existed. My purpose is to ask how far their account of the situation is still true? how far Germany is now vulnerable?
Let us begin, then, by considering the question of food, on the assumption that outside supplies are cut off,—• the assumption, as we have seen, on which rested the principal argument of the ‘Professors of the Fleet.’
Rye is still the chief bread grain of the people; but almost half as much wheat is also consumed; and it is customary with German writers to group the two grains together as ‘ bread corn.’ It is probable that in respect of bread corn Germany is rather more self-sufficing than she was fifteen years ago. The exact proportions will work out rather differently according to the years chosen. My own calculation, from the official figures of crop and import, is that in 1899-1900 the foreign imports were over 12 per cent of the consumption, in 1912-13 under 11 per cent. Other estimates arc even more cheerful for Germany. Professor Sering, of Berlin, a high authority on agricultural economics, thus expressed himself at a meeting of the German Council of Agriculture, in February, 1913, — also, as I gather, relying upon official figures: —
‘ The magnitude of what our peasantry has recently accomplished is not to be denied. With the help of cooperative societies, associations, schools, and traveling lecturers, it has succeeded in lowering the proportion of bread corn which we have to draw from abroad from 16.6 per cent in the first five years of the century to 10 per cent, in the years 1909-11. This is the work of our peasantry, for the peasantry holds in its hands more than three quarters of the whole cultivated area of the Empire, and, roughly, the same proportion of the soil under corn crops.’
And this would seem, on the face of it, to be the more encouraging for Germany, because the success in this direction has been most conspicuous in the case of the older and traditional staple. According to the official returns, the annual crop of wheat rose from an average of 3.8 million tons in 1899-1900 to an average of 4.5 in 1912-13, that is, about 18 per cent, while that of rye rose from 8.6 to 11.9, or 38 per cent. Before the war, Germany still imported about one third of its wheat from America, Russia, the Argentine, and Canada; but the improvement in the yield of rye has been enough to turn it from a ryeimporting to a rye-exporting country. In good seasons it now sends rye to Russia, instead of drawing it t hence. In recent years it has exported, on balance, no less than half a million tons of rye annually; while as late as the nineties it still imported, on balance, from three quarters to a million tons.
Yet, after all, a deficiency in the total bread-corn supply of even 10 per cent — to take the most hopeful estimate — means a shortage of more than five weeks’ ordinary consumption; and I am not aware that any German economist of standing has spoken lightly of the risk involved. But, outside cautious scientific circles, there was certainly a tendency, for some time before the war, to take an extremely opt imistic view of the situation. It was urged that, in case of need, the grain could be more completely ground, and less lost in the form of bran; and it was pointed out that, in the last resort, the quite considerable quantities of rye and wheat used for industrial purposes — for the manufacture of starch and corn brandy — could be appropriated for the miller and baker.
And in 1908 appeared an article by W. Behrendt, which attracted wide attention and made a deep impression on many minds. It was entitled ‘ Potatoes in War,’ and it professed to show that any deficiencies that might still remain in the matter of bread corn could readily be made up from potatoes; that potatoes provided ‘the national food reserve.’ For, to begin with, in the matter of potatoes Germany was more than sufficient unto itself. Next, it was pointed out that of the potato crop only 32 per cent was actually used for human food, and 15 per cent kept for seed, while 34 per cent was employed as fodder, 9 per cent for the manufacture of spirits and starch, and 10 per cent was spoiled. Surely something could be taken, if not from the cattle, from the distilleries; and, besides, the new process of potato-drying and potato-flake manufacture was going to save the 10 per cent now spoiled. All that would really be necessary, then, if foreign corn-supplies were cut off, would be a slight readjustment of consumption. So that the Emperor had a certain body of apparently expert opinion behind him when he declared, in February, 1913,—
‘There is no longer any doubt that Germany not only can now, but also will be able for the future, to supply bread and meat for all her people.’
A sign of the satisfaction felt in certain quarters was the article from the pen of Count Otto Moltke, a prominent Conservative member of the Reichstag, which appeared in the Preussische Jahrbücher just five months before the war. This declared, on the authority of official figures, that the English consumption of corn was actually less than the German, and that the German harvest by itself was capable of giving the average German more than the Englishman got; while, on the same authority, it appeared that the German meat consumption had grown with extraordinary rapidity of late, and that the figures were now on a level with those of England. Just a little pinching, just a little sacrifice of comfort, was all, he implied, that war could be expected to involve.
Even accepting the data relied upon in the foregoing arguments, there were weak places in the situation which were well known to cool observers. The cessation of the import of wheat means the withdrawal of a third of the whole wheat-supply. Now wheat flour is used not only for the white rolls eaten by the well-to-do: it is mixed with rye flour in the making of all the better varieties of ‘black’ or ‘rye’ bread, in proportions of from a fifth to a third. The growing popular relish for wheat is reflected in the official statistics, which report a decrease in the consumption per head of rye from 151 kilogrammes in 1894-98 to 144 in 1909-13, and an increase in wheat from 86.8 kilogrammes to 89.1. The figures for the two grains do not quite harmonize, but they amply indicate the tendency in the two opposite directions. A larger resort to rye would mean a reversal of these tendencies. ‘ A good thing, ’said one enthusiast, voicing the opinion of many others; ‘it is rye bread from which Germanism [Germanenthum] has for thousands of years drawn its incomparable strength and health.’ But food-habits are notoriously difficult things to alter suddenly.
And then the agricultural labor problem gave reason for anxiety. With the expansion of the industries of Rhineland and Westphalia, agricultural laborers have been more and more drawn away in recent years from the big corn-growing estates cast of the Elbe: they have been attracted both by higher wages and by the prospect of greater social independence. Let us hear Professor Sering on the consequences: —
‘In the place of the laborers who have left, come more and more foreigners [from Russia and Russian Poland]. According to the Occupation Census of 1907 they constituted in Silesia and Saxony 15 and 20 per cent respectively of the male laborers. The number rises year by year. In the whole of Germany in 1912, 729,000 “legitimation cards” were issued to season workers, of whom 397,000 were employed in agriculture. More and more does the employment of these foreigners become the basis of estate management. . . . So we are at the mercy of foreign governments whether our fields shall be ploughed and reaped; and if a war should break out, the harvests in extensive districts will be ruined.’
As it happened, when the war broke out many of these ‘ Wanclerarbeiter ’ had already reached Germany for the season; and as many as possible have been compulsorily retained over the winter and spring. Just what is going to happen next harvest time it would be unsafe to predict; but the labor position east of the Elbe might very well create a certain sense of insecurity.
But a far weightier reason for anxiety was a fact not generally known in Germany but understood by some, at least, among the statisticians, and that was the very doubtful value of the official statistics of agricultural production. During all these months of war this has been the skeleton in the cupboard of the German people. In all lands harvest figures are the weakest department of government statistics. They commonly depend on estimates, not on enumeration; so that some severe critics will not honor them with the name ‘statistics’ at all. That the German figures contain a considerable element of probable error has been pointed out by writers of economic authority in statistical publications for several years past. And at last even the easy optimism of Count Otto Moltke, in the Preussische Jahrbücher already referred to, drove Professor Ballod of Berlin, a writer of great authority, to address the general public in the July number of the same magazine, in an article which must have been disconcerting indeed to most of those who read it. Here is a summary of part of it:—
‘The estimated harvest in the province of Posen, less what we know from transportation statistics to have been conveyed out of the province, would leave 325 kilogrammes per head, a quite impossible figure; “ even the Polish stomach does not need as much bread as that.” Higher and more improbable figures still were returned from the three other eastern provinces of Prussia — East and West Prussia and Pomerania; they would imply a consumption per head of 371 kilogrammes. Assuming a consumption in the four eastern provinces of 250 kilogrammes, which is somewhat higher than the official average for the whole Empire, the harvest even then must have been, in those provinces, 22 per cent less than the estimate.’
His conclusion was an excess in the estimate for the whole Empire of somewhere about 15 per cent.
We can now realize the probable state of mind of the German government during the past six months. In spite of the much-praised efficiency of its officials, it really has not known, with certainty, what amount of corn it could count upon within the country. The self-satisfaction natural to all government offices, the tendency of Agrarians to magnify their agricultural achievements, the wish to reassure the people, the public commit tal of the Emperor a year before to the big harvest figures, all these influences would naturally lead the government to speak confidently of an adequate supply. Meanwhile there have probably been those in high places who have known that, if their armies did not ‘ hack their way through’ in a few weeks, the food outlook was far from bright.
As soon as the war had been in progress a couple of months, and the official class realized that things were not going so quickly as they had anticipated, the government began to be urged to use its authority to bring about the necessary adaptation of consumption to resources; and various attempts were made to work out the details ol the necessary transposition of foodstuffs on the basis of the official figures. One such was put forward in a pamphlet by Von Braun, head of the Agricultural Department of Bavaria, which appeared in October. He reckoned that the needs in time of w’ar would be actually less by three per cent than in time of peace; and this chiefly because the army can feed itself, to some extent, from the harvests of the occupied territories, ‘and with the further victorious progress of our forces this will be the case in increasing measure.’ To allow for the same per capita consumption of bread in 1914-15 as in 1912-13, there would need to be some three million tons more bread corn than would actually be available. This deficiency could be made up by using one million tons of the barley otherwise given as fodder, together with six million tons of potatoes (equivalent in food-values to two million tons of bread corn, and derived from the surplus supplies of 1913 and 1914). As there would be already a deficit of three million tons of fodder barley, owing to the cessation of Russian imports, the total shortage of barley would amount to four million tons. This deficit could be made up by the quarter of a million tons of barley saved from malting, because of the falling off in the export of beer and in the male consumption (with the army absent); by using the surplus supply of oats (one and a half million tons); and by turning to fodder uses the six million tons of sugar beets (equivalent to one million tons of fodder barley) set free by the disappearance of the sugar export to England. This still left one and a half million tons of barley fodder wanting. But against this could be set the surplus hay harvest of 1914, which happened to be a particularly good year and was reckoned as much as 11 per cent above the decennial average. This disposed of the difficulty as to ordinary fodder. There remained the loss of two to two and a half million tons of other imported feeding-stuffs of various kinds: maize from oversea, oilcake from Russia, and so on. But if it came to the worst, the pigs could be slaughtered somewhat earlier, and the nation could easily content itself for a year or so not to increase its stock of cattle. The bed-quilt — to use a favorite image of these writers — would be just a little skimpy; but the nation would have no serious difficulty in twisting its limbs so as to keep under cover.
Some such calculations must have underlain the subsequent government measures; and two questions suggest themselves: will the shifting around of foods and the substitution of one for another be dietetically adequate, and can it be brought about? On the first point Professor Ballod thus expressed himself last July: —
‘The potato is a one-sided food. It contains carbohydrates (starchy substances), albuminoids (or protein), and fat. in the proportion 170:2:1; while the need of the human body is 10:2:1. Great as are the advantages of the much-praised drying process, to prevent the waste of potatoes otherwise spoiled, it will not solve the problem; for the supplementary quantities of protein and fat have still to be supplied to fit the diet for human or animal consumption. It has been said that it would be possible to prohibit the use of corn in distilleries. But most of the corn so used is of a quality which would anyway be used only for fodder. And half the food-value remains in the residues which leave the distilleries and are used for feeding cattle — indeed, almost all the most important part, the protein and fat. It is doubtful therefore whether any real saving can be effected in that manner. Far greater quantities of corn, it is true, are used in the brewing of beer. But, again, we have to notice that from two thirds to three fourths of the protein and fat is left in the malt which remains for the feeding of cattle.’
On the whole, Germany was worse off in respect of food than fifteen years before.
‘Fifteen years ago we could hope that, if imports were cut off, we could still manage with our home supply, if energetic measures were taken, such as the prohibition of distilling and brewing; to-day that is no longer possible. True, our importation of bread corn has receded in recent years, and this explains the current optimism. But we must emphasize the fact that the breadcorn question cannot be considered by itself; it must be considered in conjunction with the supply of fodder and other feeding stuffs. The total import of foodstuffs has risen very markedly. It is a fearful self-deception to suppose Germany can live eleven months on its own bread corn. It can manage, yes; but only if it can continue to import 60 per cent of its fodder.’
The further question remains: granting that the proposed readjustment was satisfactory from a dietetic point of view, as well as statistically possible, could it be brought about? We have already seen that some three quarters of the cultivated area of Germany is cultivated by small peasant proprietors. To control the cattle-feeding and the sales of all these peasants was a task from which even German officials might well shrink. And, within two or three months after the beginning of the war, it was found that, instead of bread corn being carefully confined to human consumption, the very opposite was taking place. In recent years half the barley consumed in Germany has come from Russia, and it is this which has enabled the country to add so rapidly to its stock of pigs. When these supplies were suddenly put an end to, the price of barley quickly rose above that of rye, and the peasants naturally began to treat their pigs to the cheaper grain and diminish by so much the supply available for bread.
The government’s first practical steps were to decree minimum prices of wheat and rye and bread, to give instructions as to the proportions of wheat, rye, and potatoes to be mixed in flour, and to prohibit the use of bread corn for fodder. These measures seem to have met with little or no success. Dr. Helfferich, who is now in charge of German finances, boasted in a famous speech in October that the German people possessed this great advantage: ‘a spirit of self-sacrifice, unattained by the French and unknown to the English.’ But this superiority has not displayed itself, so far, in everyday business life. And the government was embarrassed because it could not make up its mind which policy to pursue: whether to set prices low in order to keep the people quiet, or to make them pretty high in the hope that this would reduce consumption and husband the national resources. The Socialists told them with perfect truth — they can find it set forth at length in all the standard textbooks of economics — that for the great mass of the people food is not a thing which will be economized to any considerable extent so long as prices are not absolutely prohibitory; it is a case of what is known as ‘ a relatively stable demand.’ The government compromised, with a plan of permissible increases of corn prices at specified periods; and of course the farmers were disposed to keep back their supplies from the market till the higher prices were reached. English and German human nature are singularly alike in matters of this sort! Here in a Munich paper is a report from Mannheim, perhaps the most important corn market in the Empire next to Berlin. It is dated January 14 of this year: —
‘In consequence of the restrictions imposed by the regulations as to maximum prices, transactions, this week as last, could be carried on only upon a small scale. In the produce exchange hardly any business took place, although there was no want of intending purchasers. In the retail trade a certain limited supply was forthcoming, although it was quite evident that farmers were holding back.’
And the spirit of self-sacrifice has not been more marked among the bakers; for a fortnight later the Burgomaster of Cologne declared that in that city alone more than a hundred master bakers had rendered themselves liable to prosecution for breaches of the new regulations.
The next step accordingly was to create a great corn company, under government auspices, with powers of compulsory purchase, which should buy up large quantities and hold them until May. But even this measure was soon realized to be inadequate. Early in January Professor Ballod once more appeared on the scene, this time in Soziale Praxis. It was now his conclusion that, in spite of all the government’s appeals to the farmers, some one and three quarter million tons of corn more than in the previous year had already been fed to cattle. And he made the momentous declaration that, while in normal times the human consumption of corn in Germany amounted to a million tons a month, there was now available for the seven months until the next harvest only some seven tenths (to be exact, .714) of a million per month. His recommendation was that corn and flour stocks should at once be expropriated by the State. After taking a fortnight longer to think about it, the government took the advice; and the German people have now been put on rations. To judge from the restrictions imposed upon bakers it would seem that the present intention is to limit the nation to three quarters of its normal bread consumption, and presumably this three quarters in weight is to contain a considerable proportion of potato flour. ‘Often it does not look like bread,’ a friend at home has written to one of the men in the trenches.
And now says the Imperial Chancellor, —
‘It is a matter of organization. The State has taken the matter in hand.. ., The organization which will have to be created will be a very difficult business, but these difficulties we expect to overcome. Our political system has shown that it can cope with the gravest tasks of organization.’
‘Organization’ is a comforting word; and the German government has in the past carried through great organizing tasks. But for these it has usually taken its own time; and every student of administration knows that it has sometimes made bad mistakes. The treatment of the food problem in Germany before February 1 was certainly not particularly well-informed or consistent. The appropriation of supplies by the Corn Company in the coming months, the allotment of quotas to the several towns and districts, the control of the bakers and the public by the municipalities, may all be managed with reasonable efficiency. But other foods will probably have to be brought within the scope of the system. The second line of defense, the potato, has proved unexpectedly difficult to manage. Here, as in the case of corn, the policy of varying maximum rates has caused stocks to be withheld; and there is already a demand for expropriation by the government. Meat so far has been left alone; and those who are well enough off to purchase meat at the present high prices can console themselves for the smaller and less appetizing bread loaf. But this is a situation which naturally causes discontent among the poor. Moreover the present method of rationing rests on the assumption that the people will continue to be able to pay for their bread, that is, that they will continue to find employment. It would be most risky to prophesy; but in the best event for Germany, and assuming all imaginable docility, the nation, if foreign food-supplies remain excluded, is going to be subjected to an irksome and discouraging régime.
I have left myself but little space to deal with the industrial side. I shall therefore say nothing about the supplies which are urgently needed by Germany for war purposes — copper, petroleum, rubber, and nitrates. The situation as to these is pretty well understood; and I will only remark that when Germany begins to have recourse to the copper on its church spires — those undeveloped ‘copper mines’ of which some of them speak so confidently — the operation of stripping it off is not likely to have an encouraging effect upon the people. What I shall say will concern a few of the staple industries.
First, we must recognize that, in relation to coal, Germany occupies a strong position. She possesses vast supplies, greater even than those of Great Britain, and it is on this basis that her recent industrial progress has been brought about. But the German government, with all its organizing skill, has not solved the problem of combining universal liability to military service with undiminished production. Owing to the withdrawal of its miners on military service, the output of coal in what is by far the most important mining district — that of Dortmund — was 26 per cent less in the third quarter of 1914 than in the corresponding period of the preceding year; and that for the concerns comprised in the Westphalian Coal Syndicate (which is coextensive to a large extent with the Dortmund district) was for the last quarter 29 per cent less than the year before. St ill, all the men that the government chooses to leave in the mines can doubtless find employment.
In the iron and steel industry the position is almost, but not quite, as strong. Germany, in Luxemburg and Lorraine, has vast supplies of phosphoric iron ore (minette), which it has been possible to utilize through the invention by an Englishman, Thomas, of the basic process — the second great cause of Germany’s recent industrial advance. The weak points are two. For the manufactures of the Ruhr district, which produces somewhere about two fifths of all the iron and steel of Germany, the works have been in the habit of making use, not only of old and new iron scrap in enormous quantities, together with minette from Lorraine, but also of a good deal of imported ore. The proportion of imported ore to the total consumption seems to have risen lately, and in recent years to have been about one quarter. Of this rather less than one third came from France, and probably even more is now available from occupied French territory; but as it is minette it is not so suitable for Westphalian uses. Rather more than a third came from Sweden, and some part of this is presumably available so long as Germany commands the western end of the Baltic, though the stoppage of the trade by the North Sea has already sent up its price very considerably. The other third came from Spain, and being hematite is now contraband and doubtless quite cut off. There must be therefore a certain restriction of the raw material. This is the special weakness of the Ruhr district. That of the Lorraino-Luxemburg district is in the matter of labor. It has no hereditary body of iron-workers, and it is largely dependent on season workers, who come from Italy. These usually go home for the winter; and Germany is said to be negotiating now with Italy to get them back.
We should expect that the large demands which the German government is making upon the manufacturers of munitions of war would have kept the iron and steel concerns very busy. Yet if we may rely on the local trade returns, the total pig-iron production of the German Empire was less than half, from August to December, of what it had been in the previous year; while the deliveries of the steel syndicate in the fourth quarter of 1914 were not much more than half what they had been in the corresponding period.
Such iron-workers as have been allowed to remain are probably busily employed on government orders; and the same process of adapting engineering and other works to the requirements of war-time that has been so conspicuous in England has been equally successful for the time in Germany. But another side of the economic problem is presented when we reflect that machinery and iron and steel products head the list of German exports; in 1913 they furnished over one fifth of the whole volume of export trade. Most of this trade must have been lost since the war began. Some 40 per cent of Germany’s total export trade used to be with the now hostile countries, and probably quite this proportion held good for the iron and machinery group; the removal from the seas of Germany’s shipping, and the very limited tonnage available of neutral shipping, can have left very little of the remainder, even before the blockade was declared. This fact has a very direct bearing on the question how Germany is going to pay for any imports she may manage to get hold of, and helps to explain why the government is hoarding gold.
While the allied mining, iron, and engineering groups form the solidest part of the German industrial structure, the second of the export groups, the textile trades, forms the most vulnerable; and that both on the side of the supply of material and on the side of the disposal of product. They contribute about 12 per cent of the total value of German exports, and give employment to some 1,370,000 persons. Of these the large majority are females; the figures, therefore, do not represent the same number of dependents as in the heavy male trades. On the other hand, the numbers cannot be reduced by military service; nor can the textile trades, except in the case of woolen goods, be much helped by government orders.
The consumption of cotton wool has been rapidly growing. To go no further back than the time of the first naval programme, in 1896-1900 it averaged 302,000 tons; in 1911-1913 it averaged 475,000. This Germany has in recent years obtained, to the extent of some 17 per cent, from Egypt and British India, and these sources of supply were cut off from the first; to the extent of 79 per cent, from the United States;,and the rest from miscellaneous sources. It is well known that German spinners carry much larger stocks of cotton than their English competitors; and, judging from the statistics of the International Federation, the stocks of cotton in the hands of German spinners on March 1, 1914 — the so-called ‘invisible supply’— was enough for approximately twelve weeks’ normal consumption. Assuming that, like some other trades in Germany, the cotton-mills are now working half-time, that allows" for twenty-four weeks. Spinners’ stocks in August are commonly considerably lower than in March, and this may be offset against the considerable quantities probably stored in the commodious warehouses of Bremen. Even allowing for the probability that hundreds of bales were seized at Antwerp, and for the depression in August and September, when a quarter of all the textile operatives were totally unemployed, it is difficult to see how the mills can go on for more than, say, nine months from the outbreak of the war, without fresh supplies.
The German cotton manufacture, moreover, is a typical example of an ‘ export industry ’ in that it is dependent on foreign countries for a very large part of its market — far more than the iron and machinery trades. It is not so dependent on an outside market as Lancashire, yet probably between a third and a half of the fabrics produced are sold abroad. Some of its branches, such as mixed fabrics and hosiery, rely on foreign markets for half their sales, some for three quarters. A glance at the complicated trade figures will show that about one half, perhaps more, of all these exports has hitherto gone to what are now hostile countries.
So far as its materials are concerned, the German woolen industry is in an equally evil case. With the improvement in German agricultural practice, the number of sheep has been rapidly dwindling. In 1900 it was nearly ten millions, in 1912 it was under six; for comparison it may be added that in England and Wales alone in that year it was over eighteen. The woolen industry is, therefore, almost as dependent on imported material as the cotton trade. Three fifths of the mill consumption was of merino. Of this merino supply more than four fifths has hitherto come from Australia and the Cape; and of the crossbred (the other two fifths consumed) almost half usually comes from Australia also. Altogether, two thirds of the raw material has been brought from what are now hostile countries. The Argentine and Uruguay, the only other large sources of supply, could doubtless increase materially their sales to Germany; but these also are now cut off.
As to stocks in the country, the foremost English trade authority reported, at the end of 1913, that stocks both of raw wool and tops were then ‘abnormally low everywhere.’ The one cheerful bit of news for Germany has been the appropriation by the government of the stores of wool found in Roubaix and other French woolen centres now occupied by its troops. But the amount can hardly be enough to keep the industry going for any length of time. The military authorities have long ago taken over all the woolen blankets to be found in the Berlin factories and shops.
As to the silk industry, that can be tolerably comfortable about its materials so long as Italy remains neutral. But hitherto half its product has been exported; and of these exports more than a quarter, that is, an eighth of the whole, before the war, came to England. Of particular classes of fabrics the proportion exported to England has usually been much larger. Thus, according to the last figures I have been able to get hold of concerning the silk and velvet trade of Crefeld, — those for 1907, — 15.5 per cent of the output went to England and 0.6 per cent to France — that is, together, between a fifth and a fourth.
Of the smaller textile industries, linen and hemp, and jute, I need only add that of the former four fifths of the material has hitherto come from abroad and more than three quarters from Russia; and of the latter practically all the material has been drawn, until the war, from British India.
From textiles one naturally turns to the leather trades. But I have only room to remark that about half the total supply of hides has hitherto been drawn from abroad, and that about a third of the import came from enemy countries, chiefly British India and Russia.
Of other industries I can simply mention the chinaware and porcelain group, which usually disposes of two thirds of its output abroad, and recently sent a third of this export to what are now enemy countries; and the jewelers and wrorkers in precious metal, who normally export some three quarters of their product.
These arc all among the older trades of the country. But if one turns to the newer trades the result is the same: they are all cut off, either from a large part of their market or from a large part or the whole of their material. Take three very different examples. The shipping business of Germany has of late years been growing by leaps and bounds; and a system for supplying, and incidentally for controlling, dock labor at Hamburg has been exhibited for our admiration. But now that the German merchantmen are mostly shut up in port, the labor exchange in the month of November, 1914, found engagements for only 2300 dockers, as compared with 33,000 in the same month of 1913, and since then things have certainly not improved. Aniline dyes, again, have been one of the main boasts of modern Germany: in the years between 1900 and 1913 the value of the exports almost doubled (from 77 to 142 million marks), and of these a third used to go to Great Britain and other enemy countries. And, finally, take that humble but popular commodity, margarine. For its production Germany imported palm-nuts and copra hi 1913 to the astounding value of 226 million marks, six times as much as in 1900. But of the palm-nuts nine tenths came from British West Africa, and of the copra almost half from other British possessions.
Bearing in mind the conditions I have sketched, let us place side by side two remarkable utterances. One is from Prince von Billow in his book Imperial Germany, published a year or so before the war: —
‘We have entrusted millions to the ocean, and with these millions the weal and woe of many of our countrymen. If we had not in good time provided protection for these national possessions, we should have been exposed to the danger of having one day to look on defenselessly while we were deprived of them. But then we could not have returned to the comfortable economic and political existence of a purely inland state. We should have been placed in the position of being unable to employ and support a considerable number of our millions of inhabitants at home. The result would have been an economic crisis which might easily attain the proportions of a national catastrophe.’
Compare with this the language of Dr. Rathenau, head of the Allgemeine Elektricitats-Gesellschaft, in December last:—
‘German industry is faced with the task of converting its organization, hitherto based upon a system of imports and exports, into an organization appropriate to a country thrown upon its own resources.’
And this, he implied, there was no doubt it would be able satisfactorily to accomplish.
Which of these prophets is most likely to be justified by the event? Is it possible for an industrial and exporting state to retrace its steps, without undergoing great hardships while it adapts itself to its narrower quarters? It is not only the food quilt that the nation has to twist its limb to get under: it is the employment blanket also. Von Biilow, no doubt, was magnifying the need for a navy, just as Rathenau has been minimizing the difficulties of adaptation. But can it be seriously doubted that the balance of probability lies with the ex-Chancellor? We need not expect any dramatic breakdown of the whole economic structure; for some months the country may struggle along on its present supplies, and it may even get in some of its necessary materials through neutral states and pay for them by exports or by gold. Moreover, the vast government orders will keep large bodies of the people employed, and enable them for a time to purchase their requirements, even at enhanced prices. But I cannot but believe that, after a few months, if the Allies hold command of the seas, unemployment and short time will become more and more prevalent, and pauperism and distress grow to alarming proportions.
We are told of the wonderful organizing and administrative ability of the German civil service. I am inclined to think that there is a tendency in some quarters in England — in reaction from extravagant anticipations of an early victory for the Allies — to go to an opposite extreme and overestimate the effectiveness of the German official machine. The German Beamtenthum has done considerable things for its country — it is honest, hardworking, systematic. But I decline to take it quite at its face value. It makes a proud and justifiable display of all its achievements, but I doubt if it can show anything quite so big as the way in which England took up the colossal task, not of sickness insurance only but also of unemployed insurance — which German administrators have been afraid to tackle — and all in a single year. And the social situation in Germany is such as to add to the task. It is inaccurate to say, as Dr. HelfFerich did, in his historic speech, that ‘ Germany has at its disposal an incomparably better economic organization than its enemies,’ if he meant England. Our whole system of adjusting wages in the staple trades of the country by negotiation between masters and men, gravely imperfect as it is, is the admiration and despair of social reformers in Germany. Here it works with much friction, of course; nevertheless it does work; and in Germany in the big industries there is nothing like it. No one who knows Germany and England at all intimately can be ignorant of the fact that the relations between classes in England — much as they leave to be desired ■—are incomparably more friendly, more intimate, and more wholesome. With all their faults, the English are essentially a far more united people. This cannot but tell in a struggle like the present. And when the German administrators have to take up in earnest the task of ‘return to a purely inland state,’ and of the redistribution of the working people among the contracted occupations that survive, they will find it, I expect, beyond their powers.