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S H "L O C K A T T H E BAR
LA N D B A N KS FO R E N G L A ND
B A N KS A N D P E O P L E
'
W W A LT E R
.
C RO T C H
T H E C O TT AG E H O ME S O F E N G L A ND
T H E CH I LD R E N O F T H E ST A T E
CHA R L E S D I C KE NS S O C I A L R E FO R ME R
T H E P A G EA NT O F D I C KE NS
T H E E DE N O F EX I LES
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THE
MI N G
T RA D E
By
T H O MA S
FA
WA R
b
R R OW
AN D
W WA LT E R C R O T C H
.
u th o rs o f
Ho w
to
Win
So l u tio n ,
th e
”
Wa r : T h e
Fin a n c ia l
e tc ., e tc .
LO N DO N
C HA PMAN
H AL L , LT D
1
6
9
1
.
£5
13 ;
C o n te n ts
I
The Task Before Us
1 1 The Danger Of D ri ft
I I I The Gateway o f the East
I V Some Essential Reforms
V The New Bank n
VI
Wanted National Econo mi cs
VI I
C ommunity O f Interest
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C H AP T ER I
THE
TASK B EFORE
U s.
we are to fight the coming Trade War
successfully then it is essentia l that we
should first and foremost clear our
minds of cant We must realise the immen
of
the
task
before
us
we
must
get
at
s it
y
grips with the vital factors of the situation
and we must above all realise the urgent
necessity first of thinking o u t a definite plan
of campaign and secondly o f entering upon
i ts execution with vigour and despatch
That much said it seems equall y O bligatory
that we should begin the consideration of
this subject with a very positive warning
Eighteen months ago we drifted i nto war
We were largely wi thout men wi thout
munitions l argely without p l ans and almost
entirely without any adequate idea of the
tremendous nature o f the struggle into which
—
we entered more by accident than by
design I n a word war found us unprepared
and we h ave had to pay a bitter price f o r that
defic i ency I f history is n o t to repeat i tself
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THE COM I N G T RADE WAR
we must immediately set ourselves to the
task o f being ready to face the greater risks
emergencies and perils O f the peace that is
coming a peace that events may precipitate
much s o o ri e r than some o f us anticipate
Hence it is that we have s e t out to define the
steps which in o u r opinion it is important we
should take in order that we may prevent o u r
relentless and formidable foe winning from
us a mastery during the coming peace which
his tremendous exertions have failed to secure
in war O n thi s ground alone we bespeak for
our
proposals and suggestio n s
carefully
—
thought o u t and deliberately arrived at not
merely a pass i ng interest o r a g enera l s ym
pathy but t h at strenuous attent i on and
searching examinat i on which the subj e ct
deserves
At pres ent the nation does n o t real ise
that a trade war i s i mminent A certain
interest and a very lively eagerness h as
it is true been exciting the mind o f the
man in the street
by the captivating
notion o f smashin g the enemy s trade
and of being avenged upon the German
dumper with his cheap and nasty goods
and even n astier methods and for all the
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THE COM I N G TRADE WAR
undercutting and devio u s trading o f which
We have been t h e victims M r Hughes
speeches have in particular evoked intense
a pprobation and have been followed by such
a quickening o f the national spirit as perhaps
n o other orator since C hatham ever aroused
but it is th e first law o f mechanics that well
c ontrived machinery uses the force whi ch is
engendered within itself To day the interest
and fervour to which we have referred are
being dissipated i n evanescent outpourings
rather than being concentrated to some
pract ical and definite end There h as been
to o much letting o ff of steam and to o little
turning of wheels for us to have made any
progress along the road on which o u r hearts
are s e t and until concrete tangible and
practical proposals are presented t o the
nation then reports meetings speeches and
a l l the rest o f the propaganda will be s o much
i dle beating o f the air It is high time there
fore that we app reciated the grim fa cts o f the
s ituat i on and enquired of ourselves h o w best
we can realise the ideal we pursue the ideal
o f wresting from the German his supremacy
in certain essential trades and o f s o equipping
o u r o wn country that o u r unsleeping enemy
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b
THE COM I N G T RADE WAR
will not again have the o pp ortuni ty Of building
up in times O f peace those vast resources and
almost endless reserves of war which ma y be
used again to the detriment o f ci vilisation
and if possible f o r the destru cti on of Great
Brita in
That we are all agreed is the t ask that will
face u s when p eace has been declared But
h o w is that task t o be achieved A c cording
t o certain political and econo mic pundits it
is premature to think o f any plan in this
direction n o w o r at all events if we permit
ourselves t o thi nk upon the matter our con
elusions must be o f that vague and nebulous
character that will r o b the m o f an y pract i cal
va lue whatever The Ca binet i s in a d iffi
cult y abo u t the subject ; it may be that
their policy O f postponement is n o t ill
judged Fo r them t o arrive at a decision
in re gard to o u r future trade relations
with Germany n o w might and in al l
prob abil i ty would necessitate the pressing
cares and the imperious needs o f the moment
being negle cted M ore the C abinet it is
notorious are themselves divided o n the
question as t o whether there ou ght o r ought
n o t to be a tar i ff a ainst German o r foreign
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4
THE COM I N G T RAD E WA R
a
but
while
the
politicians
and
d
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min i s tr at o r s ma y hes itate wh il e the C oalition
may have really sound re asons f o r marki ng
t i me those same reasons ce rtain l y d o n o t
ap p ly to the merchants traders bankers
a rtis a ns and c raftsmen the organisers and
administrators o f these realms I f the pol i
t i c i an s are cont ent in this matter to wait upon
events t o wait until the wa r is over when
maybe they will be confronted wi th othe r
pressing problems (such as the Iri sh "
uestio n
and the Labour P roblem) the vast majority
o f men o f a ffairs an d bus i ness up and down
this country ought n o t t o permit themselves
the luxury o f any such vacillation
It s
the m that take advantage that get advantage
”
i this world George Eliot ma kes o n e o f her
characters remark and remembering it o u r
c ommercial men ought to thrash o u t thor
O u ghl y and at once the steps that are n e ces
sary f o r us t o take in order to des troy Germ an
industrial and commercial suprema cy They
ought t o hold conferences and meetings and
to en c ourage debates o n every possible aspect
o f the many problems raised b y the threat
ened r enai s sa nce o f German tra de and having
arrived upon common ground o f action they
goods
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T H E COM I N G TRADE WAR
ought to urge it upon the Government with
a l l the conviction an d resolution they possess
Initiative has left the hands o f the politicians
and is
w h o hesitate an d falter life away
n o w wi th men o f live intelligence and vital
ability wh o are to o much in earnest to waste
time upon the barren polemics and tiresome
f u tilities o f part y controversies
Tadpole
”
and Taper Disraeli told us
were great
friends and neither o f them despaired o f the
”
C ommonwealth
but the day has come
when the C ommonwealth despairs o f them
D O N oth ing and Rigmarole
have had
their innings It is n o t t o the i r exponents that
we appeal we appeal t o the men o f sinceri ty
and ab i lit y o f a l l grades sorts and conditions
t o take up thi s question o f German trade to
study it thoroughly in all its details a n d
havin g decided what is necessary under
the exigenci e s o f the situation to enforce
their demands upon the Government and
so
hammer o u t a vi gorous national
p olicy
Any course o f c onduct less resolute than
th i s will simpl y result in o u r being caught
napping once more Just as we were u n pr e
pared to fight the Germans in Flanders and
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6
T HE
COM I N G
T RADE
WAR
the Turks in Gallipoli s o we shall find o u r
selves unequipped to withstand the a ssaults
which o u r enemies have already planned
upon o u r i ndustry and commerce here at
home I
S i nc e l if e fl eets all i s chan ge t h e P a s t go n e se i e
"
to d ay I
It is perfectly certain that one of the earliest
developments of the peace that will follow
its declaration is the dumping into our
English market o f a huge quantity of cheap
German goods which are even now being
accumulated in her factories and which s h e
is only waiting the cessation Of hostilities to
discharge upon these shores What will be
the e ff ect of these huge exports from Germany
supposing we allow them to take place "
Remember in all probability we shall be
threatened on other grounds with serious
labour crises Thousands perhaps tens of
thousands of men will in the natural course
be discharged from munition factories
Thousands more will be re l e ased at no distant
date from active military service At present
we are disposed to comfort ourselves with
the complacent reflection that the labour of
these producers will be eager l y snatched a t
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B
T HE
COM I N G
T RADE
WAR
by the other industries that will immediate l y
revert to their normal condi tion at the
cessat i on of war But we put it to o u r
readers that the influx of a vast quan
tity of German goods that have been
stored up in German factories for months
past made some of them by German
women and children at sweating rates
others by alien labour which Germany
has imported and some again manufactured
in part by the labour o f her prisoners we
put it to o u r readers that the invasion o f o u r
market by this considerable reserve of enemy
goods will have the e ff ect of rendering tens
o f thousands o f o u r fellow country men per
ma n e n tly unemployed o r at all events
unemployed for a period perhaps longer than
the war If we are not very careful and very
wary we shall yet s e e r e enacted the tragedy
the tragedy of men from the
of past wars
—
trenches begging in o u r streets those same
men who will tell us th at their su ff erings in
Flanders and in Gallipoli were not co m
parable to the fate which their country has
—
r eserved for them the fate of returning t o
their native land and finding that there is no
place for th e m at the table of life no work
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1
THE COM I N G
T RADE
WAR
their strong hands to do and no means
l ivelihood ex c ept a shamefaced appeal
of
Then it
to the charity of the passer by l
shall be said that it was not her soldiers
who deserted Brita i n but Britain who had
betrayed her heroes "D O not let us forget
also that the advantage which Germany
will thus secure at the outset o f the
new industrial conflict will remain with her
t o the end While o u r people will be in the
grip of unemployment s h e will have secured
once again her dominion over the English
market She will be again in receipt o f English
gold and English goods ; s h e will be again
i n the position of being able to store up more
reserves of wealth goods labour power and
later of munitions and shot and shell to be
used perhaps in a decade o r s o in another
e ff ort to overthrow Great Britain and render
nugatory all the essential things for which we
have poured o u t lavishly o u r treasure and o u r
blood She will have won the first round in
the industrial conflict of the future s h e will
have secured the start in the commercial ra c e
and this will confer upon her an enormous
advantage that may cost o u r chi l dren and
even our children s children dear
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9
T HE
COM I N G
T RADE
WAR
We have been told lately by an eminent
politician that we must remember that r e
”
venge does not enter into trade This we
need hardly s ay is perfectly true It would be
idle to pretend that a general boycott of
German goods o r a general refusal to trade
with Germans is possible If the whole o f the
peoples o f the allied nations were to enter
into a solemn league and covenant never again
to buy s o much as a German doll o r a p air o f
German socks it would be impossible still to
carry o u t the pledge In the first place the
retailer would have no means o f protecting
himself against German goods Even as we
write at this very moment when we are at
death grips with Germany it is practically
certain that there are on sale in London vast
quantities o f manufactured articles which
have come into this country vi a Germany s
neighbouring neutrals German socks Ger
man fancy leather goods German tennis
coats German toys and a host of other
German made goods have been readily pur
chased by hundreds and thousands o f youths
men and women at a time when they were
consigning the Kaiser and his people to the
rigours o f such a bo y cott as would h ave left
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I O
T HE
COM I N G
T RADE
WAR
what means we c an wrest fro m the Germans
the unnatural industrial predominance which
they have succeeded in acquiring This i s
not revenge ; it is business Walter Savage
L andor taught us long ago that the strength
o f England lies n o t in armaments and i n
but in the omnipresence o f her
v as i o n s
industry and in the vivifying energies of her
high civilisation If therefore we allow the
German trader banker and merchant to
forge ahead at o u r expense during the next
twenty years at the same rate of progression
that he has shown during the last two decades
then inevitably we must cease to be the great
industrial and commerc ial power which h as
enabled us t o rejoice in a comparatively high
standard o f life and a vigorous independence
o f character N obody realises this more than
the Germans themselves O ne o f the most
illuminative and interesting contributions to
the literature o f the war came from a section
w h o in the name o f
o f German Socialists
the Brotherhood o f L abour and of I n
”
rejoiced at
t e r n ati o n al Social Democracy
the impending defeat o f Britain and the
approaching ruin o f her industries because
a s they said th e momen t the Eng lis h wor kma n
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T HE
COM I N G
l ower
is
r edu ced
to
a
co
mp el le d
to
a cce
pt
T RADE
s ta n da r d o
f
th e
Ma r xi a n
WAR
l ife h e wi ll b e
doctr i n e ,
a nd
he wi l l kn ow th a t ther e i s n o eco nomi c fu tur e
r hi m wor thy th e n a me th a t does n o t r es t o n a n
o
f
u bi qu i tous a n d o
mni sci en t Sta te
.
There is no doubt whatever that the
Socialists in question were right The defeat
o f Great Britain by Germany would have left
us in such a dilemma that we should have
had to accept a lower standard of living than
o u r people have known for over one hundred
years and the days of our prosperity would
have passed like a dream away Happily that
nightmare has been dispelled But although
Germany is failing against the Allies in the
field she may still prevail against them in the
counting house She will most positively do
s o unless we arm ourselves for a struggle as
grim as fierce as unremitting and as deter
mined as even the great ordeal through which
we are now passing It is not revenge that
should prompt us to face this fact it is not
even patriotism per s e i t is sh eer self pr eser
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va ti on
The question is how best can w e face the
new conditions
how can we contrive to
wrest from Germany that domini on over
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3
T HE
COM I N G
T RADE
WAR
trade and industry which she has acqu ired
during the past half century P First o f all let
us rule out from the consi deration of the
subj ect whi ch we are about to present to our
readers one very important aspect that we
do not propose to discuss M any of our fellow
countrymen are quite re asonably in favour
of
a tari ff against German goods
many
again are in favour more reasonably perhaps
—
of a general tariff a scientific tari ff against
a ll goods
not produced under the British
flag O thers are i n favour of making such
arrangements as will discriminate at once in
favour o f goods produced within the Empire
and by our Allies as against (a ) Germany
and (b ) Germany and neutrals O thers again
remain resolutely O pposed to any tari ff what
ever whether designed to penalize Germany
o r to favour the Allies o r t o favour the Allies
and the Empire For our part we propose in
the following pages sedulously to avoid the
bewildering conflicts that these di ff erent
propositions raise It may be that some fiscal
genius will arise wh o can show us how to
erect a tari ff wall around Germany while
still adopting a scientific tari ff that will favour
both the Allian c e and the British Emp ire
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THE COM I N G
T RADE
WAR
P ers onally
we co n fess that we do not see how
it is to be accomplished It seems to us that
whether Protection be right or whether Free
—
Trade be right and as to that we o ffer
no opinion whatever
the several entities
that we have to consider are so inextricably
confused that anything in the nature o f a
scientific tari ff becomes almost as bewilder
i n g ly impossible as would be the task of
applying the laws of mathematics to the shift
ing surface of the Kaleidos c ope Where is the
economic s a va n t who can show us how to
ring Germany around with a Tariff Wall
analogous to that of the C hinese Empire
while still giving a preference to France and
Russia and yet remembering the undeniable
claims of our colonies P It may be that there
is somewhere tucked away in obscurity
nursing his lambent intelligence in some local
polytechnic an incipient statesman w h o will
solve a riddle that to us at present appears
to be insoluble But wh ether it is so or
not we propose to avoid the dilemma only
remarking in passing that there is nothing
sacrosanct in either one fiscal cult or the other
We do not know whether future generations
Will be content that this country shal l rema i n
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THE COM I N G
T RADE
WAR
a purely Free Trade country or whether th e y
will dec i de upon an Anti German tari ff o r
whether again they will determine upon a
tari ff that gives a preference to o u r coloni es
or the preference to our Allies Upon the
shifting sands o f such uncertainties nothi ng
it seems to us can be built and we are content
to turn t o the certainties of the s i tuat i on to
direct the attention o f o u r fellow countrymen
t o the uncontroverted realities of to day
rather than t o the elusive vacillating possi
b i l i t i e s o f the future O ne thing is certain
Whether we have a tari ff or whether we do
n o t there can be no question whatever that
we shall not succeed in wresting from
Germany her industrial and commercia l
supremacy until we have learnt lessons which
”
Wise men
s h e has taken seriously to he art
said Aristophanes
learn most things from
”
their foes Until we are able to produce and
market the goods that are most suitable t o
the commercial and industrial genius of our
people more cheaply and more e ffi ciently
than our rival until we are able to prevent
—
that easy conquest of fresh markets some
—
which have been
o f them already protected
the despair o f British statisticians and t h e
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THE COM I N G
T RADE
WAR
envy o f British business men unt il we can
apply to our methods o f production that ri gid
economy and wise husbanding of resourc es
that have marked the foe whom we have to
dispossess until in eff ect we can produ c e
more easily more cheaply and more effi cient l y
the goods that the outside world requ i res
than can Germany then tari ff or no t a ri ff
we shall be a poor second best to the co m
petitor in that race for the industrial supremacy
of the world which the twentieth century is
to witness and decide It may be that the
adoption of a tari ff in some form w i ll hel p us
in undreamt of ways It may be o n the other
hand that we shall continue to abide by that
system of free imports under which after all
o u r trade and our commerce have gro wn to
enormous proportions The future is hidden
from man
we do not pretend to reveal i t
But this we know : that whether we adopt
Tari ff Reform in whatever guise o r whether
we cling obstinately t o Free Trade unless we
assume a diff erent attitude towards industry
trade commerce and towards those problems
which aff ect the life and conditions o f the vast
majori ty of our fellow countrymen then we
are doomed to failure and neither Tari ff
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7
THE COM I N G
T RADE
WAR
Reform nor Free Trade will avail to help
us
What we require first of all is the realisation
of the fact that trade is a matter Of national
concern that it a ff ects the welfare of all the
units that go to make up our population It
is surely a saddening and ironical reflect ion
that the only Government Department given
over to the management of trade is a Board
which comprises nominally the Archbishops
of C anterbury and of Dublin and various other
functionaries whose names need not be men
N eedless to say that Board never
t io n e d
meets yet who will deny that there is not a
very r ea l need for a r ea l Board o f Trade in
—
the United Kingdom P a Board whose bus i
ness it would be to stimulate trade business
and commerce in every way possible and to
place all the resources of the Government at
the disposal o f men whose primary concern
it i s to organise the labour of the people and
to market their products Let us not be mis
understood i n this matter we are nowadays
no advocates whatever o f the State usurping
all the functions of the private trader We
—
have come w e confess somewhat reluctantly
—
to the belief that British industry would
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18
THE COM I N G
T RADE
WAR
While as we shall show the State may be
able to d o much the main driving power in
the coming trade war must inevitably be in
the insight and initiative o f the private co n
cern With all the State regimentation and
organisation that there is in Germany we
may well take a lesson from them in private
enterprise While f o r i nstance we have in
Germany the spectacle o f the State taking
over the whole o f the stocks plant etc o f
the textile industry with limited permits
within o fficially defined limits for ordinary
commercial production we have on the other
hand instance after instance o f alertness and
readiness to promote German interest alo ng
the channels o f private enterprise We wil l
give o n e as an illustration It is well known
amongst business men that during the last
ten years the Germans have been particularly
strenuous in their attempts to capture trade
throughout the whole o f the Balkan Peninsula
Both instin ctive and deliberate movements
o f commerce have been e ff ected through these
important markets and o n to As ia M inor and
the N ear East The partial completion o f the
Baghdad Railway (in which the Kaiser has
a lways mainta i ned a keen personal interest )
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20
T RADE
THE COM I N G
WAR
has both instigated and facilitated these move
ments Since the temporary suspension o f
the element o f world competition brought
about by the war German efforts to con
solidate and concentrate these e ff orts have
already been redoubled And one of the most
recent developments in private commercial
enterprise has been the formation o f a power
ful trade organisation known as the German
L evant Union with central o ffi ces at 5 6
Unter den Linden Berlin This important
and menacing organisation is only o n e amongst
many such It was recently founded by a
hundred leading men in German commerce
men representative of indus try trade and
fin ance Its idea is to unite forces for co m
b i n e d action in promoting German trade
interests by immediate and direct action in
the areas of trade indicated The statements
issued by the Board of Directors are frank
and clear The German Levant Union is not
merely already in touch with reliable and
responsible agents with bus i ness connections
in Sofia Bucharest Athens C onstantinople
etc but in these and other geographical
areas o f trade travelling representatives and
agents are already scouring the countries
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21
THE COM I N G TRADE WAR
acquainting themselves with the peoples and
their requirements And even at the present
time the Levant Union is busy organising
branches throughout the Empire in their chief
cities and centres O f industry and commerce
and unreservedly placing its powers and its
p er s on el le at the disposal of a large and i n
creasing membership o f the Union This is
but a single and significant instance of the
energetic and resourceful efforts o f the enem y
a s i n di vi d u a ls fighting a trade war p a r i p as s u
with the military war
Here at home as they do in Germany
we must look outside the State for the
initiative But what the State ca n do is
to reinforce those individuals w h o are
carrying on the trade and commerce o f
our
country by placing at their disposal
machinery and resources that only the
State can command
In a word the
State can make practical the national
trade policy for which we plead ; first
by mobilising all i ts forces at the back
of those pioneers O f industry whose pre
science and talent have enabled them to forge
ahead and to peg out for Britain and the
Emp ire claims on the rich soil of some of the
.
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22
,
THE COM I N G TRADE WAR
new markets which await o u r attention We
need hardly point out that o n e of those
markets is Russia
T O day it is a distressing and ironical fact
that whereas everythi ng associated with
England English methods English houses
and even English literature is at a premium
in Ru s s ra little or nothing is being done to
take advantage o f the tremendous o ppo r
tu n i ti e s that the vast Pan Slav Empire o ff ers
us Russia s trading possibilities are almost
infinite Her mineral wealth is boundless
For the first time for decades her population
largely primitive and therefore guided by
instinct and sympathy rather than by cal e u
lated commercial considerations are turning
with avidity to every suggestion that is made
that they should trade with Great Britain
Goods made in Germany are anathema to
the M oujik goods made in England would
be eagerly purchased Again the wealth that
Russia holds in the Ural M ountains can be
released for her and for mankind more swiftly
by British engineers than by those of any
other nationality The British temperament
is not alien to the Russian and o u r country
men stand as we have said high in the re gard
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23
c
THE COM I N G TRADE WAR
of
the Slavs There ought to follow this war
such a renaissance o f i ndustry and co m
merce in Russia as would keep every engineer
i ng shop along the C lyde and every forge
along the Tyne busy for many a day to come
"e t what is being done to direct the attention
of
British traders and British commercial
houses t o this unparalleled opportunity "
Practically nothing We may be told that those
houses are to day engrossed in t h e manu
facture o f munitions But a time will arrive
when this has ceased to be the case when
Russia will lie with all her vast possibiliti e s
and all her splendid opportunities ready to
be embraced by the phys ic al energy of our
countrymen I s there not a very real danger
that at that hour o u r captains o f industry wi ll
still lack the information the gu idance and
the inspiration necessary to throw wide the
portals o f this vast new treasure house ;
requisite to open up this new chapter in o u r
commercial history and that they will repeat
the mistake o f the past and leave the
—
development o f Russia to be undertaken as
—
heretofore b y the tireless and ubiquitous
Teuton P
A really vi talised and wel l equipped Boar d
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24
THE COM I N G TRADE WA R
Trade were it to exist at the present
moment would make it their business t o
avert this calamity They would be busily
engaged in calling conferences concerning
exports comparing lists and finally sending
into the Steppes o f Russia carefully
ou t
selected representatives who could come back
explain
to o u r business houses here and
exactly what the Russians needed from us
and h o w we could best sup ply them with
their requirements That Germany is pre
paring to do this the moment the last shot is
fired is beyond all doubt that we are making
any such preparation whatever is exceed
i n gl y improbable Why is this P The reason
is obvious
The Germans realised l ong
ago the supreme necessity of such a policy of
national trade expansion as would enable
them to produce cheapl y and market easily
We have not Even to day when the German
hosts are being battered into impotence before
Verdun when the German failure in the field
i s becoming increasingly obvious when her
publicists like Harden are advocating peace
and her military resources are drawing to
their end she can look forward to the future
with a confidence that we may a ff e ct b ut
of
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25
THE COM I N G TRADE WAR
ca nnot feel Her plans for the reconquest o f
her lost trade with Russia are cut and dried
He r projects for the recapture of her commerce
with C hina and in the Far East have been
thought out carefully and minutely to the
very end But we who will have to face the
”
greater peril of peace who will have to
compete again with cheap German goods
w h o wi l l have t o fight for o u r very livelihood
against cheap German labour and u n s cr u pu
—
lous German methods w e have no plans ;
no plans to combat and outwit the most
resolute resourceful and relentless nation o f
traders that the world has ever known ; no
provision with which to face a future menaced
by their alert activity by their u n faltering
and untiring pains and care Depend upon it
that is a deficiency which will cost us very
dear in the future The great Bismarck de
c l a r e d that you must either destroy your
enemy o r conciliate him TO conc i liate Ge r
many is as reasonable a proposition as that
o f propitiating a crocodile or making terms
with the panther in the desert In order to
destroy her o r at least to destroy her power
o f mischief we must make such inroads upon
her trade as will make her dominion military
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26
C H AP TER I I
T HE
D AN GER
D RI FT
OF
.
T is abundantly clear from the foregoing
general survey of the situation that so far
from there being any automatic accession
o f German trade awaiting us at the conclusion
o f the war it is more probable that the strategic
position then O btaining will be found distinctl y
advantageous to the enemy We do n o t f o r a
moment postulate that the position admits o f
but its chief element o f danger
n o hope
seems t o us to lie in the bland and distressing
disregard by o u r people of the d iffi cult i es
and perils that will follow hard upon the
”
pi p ing times o f peace times that are c a l cu
lated t o prove far more exacting and strenuous
than even the months o f tears agony and
effort that we have already endured We
simply cannot a fford to cherish any longer
that easy optimism and smug complacency
o n somet hing not ourselves
which relies
”
which makes for righteousness
That course
i s fraught with danger in matters spiritual
in e c onomic aff airs it is positively fatal C are y
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28
THE COM I N G TRADE WAR
Street is strewn wi th the wrecks of men o f
and the policy of drift which
n o intentions
brought the engaging M icawber to the debtor s
p rison may yet sweep o u r Empire to the verge
o f indigence There is a more excellent way
and we must take it now O therwise instead
of the rich prize Of German trade falling into
o u r own activities will be
o u r capacious lap
paralysed by the unemployment whi ch looms
ahead Let us face the facts As we have already
indicated within a f e w months of peace an
aggregate of not less than five millions O f
human beings men and women (some citizen
soldiers some munition workers ) will find
their occupations gone and unless vigorous
steps are taken to organise their industry and
direct it into other channels a huge number
of them will hang l ike a mill stone round the
neck of the nation rendering it impossible
for us to forge ahead in the industrial race
The primal problem then that will con
front u s after the war will be to discover for
those thousands really profitable employment
Can this be achieved and if so how P
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Ar du a
moli mur
,
Sed
nu l l a ,
n is i
a r du a
,
vi r tus .
At first blush the task appears not
merely a fo rmidable but a stupendous one
.
29
THE C O M I N G T RADE WAR
We shall find industry utterly disorganised
the machinery of production in a state of
”
confusion worse confounded with capita l
severely restricted and wi th the home market
s u b j e ct m o s t pr o b a b l y t o an invasion of cheap
and nasty goods tran scending all the previous
”
results o f the now semi quiescent dumper
It will be agreed that the prospect is not an
alluring o n e and it is more than probable
that the futile O ptimism o f o u r present mood
with its refusal to face realities and its general
reliance upon some mysterious and fugitive
providence which will bestow upon us the
bulk o f the enemy s commerce may be s u c
c e e d e d b y a bitter and
equally pr o fitl e s s
pessimism one degree only more i mpr a c
ti c ab l e than the airy i ns o uci a nce of to day
What we have to d o is to avoid either and
both extremes we have to settle down to an
earnest manful consideration o f the obstacles
that must be surmounted o f the difficulties
formidable enough it is true but not i n
superable so long a s we are at pains to grapple
with them at once in all their intricacies and
detail and not wait until we are overwhelmed
by the force of their impact
First then we should immediately seek
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3
O
THE COM I N G TRADE WAR
the solution o f the inevitable problem o f
unemployment by an atte mpt to conquer
—
markets such as the war has
n e w markets
temporarily (in some cases may be per
man e n t ly) closed to the enemy and which
o ffer us enormous opportunities for success
ful and advantageous trading It is no mere
rhetorical exaggeration to say that c an we
but utilize those opportunities the absorption
o f five million producers would prove a task
that we could undertake without misgiving
or dismay At present we have to a fli r m
—
even at the risk of tiresome iteration that
practically nothing is being done to grasp
them
What are those markets with possibilities
s o vast and s o golden P
They comprise millions o f human beings
mil l ions who for the first time wil l be averse
to the purchase of German goods and resent
ful of the spread of German influence ;
millions who have in the world c o n fl i ct been
our Allies and who will be eager buyers o f
everything British and British made millions
who for the first time in our history will
extend to British money to British methods
—
of trade to British engineering aye even
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1
3
THE COM I N G TRADE WAR
—
to British n a mes a welcome we have never
before inspired We have wo n the p asspo rt
to those markets by the blood and va l our by
the su ff ering and willing sacrifice of our troops
and there can be no doubt that if our merchants
and traders avail themselves of the Oppo r
t u n i t i e s that have been procured for our race
at the bayonet s point then o u r pentecost
of calamity wi ll not have been in vain As
matters stand however the melancholy fact
presses itself upon our attention that the
purchases Of o u r friends and Allies would go
—
for
t o benefit not ourselves but the enemy
the simple and suffi cient reason that his trade
supplies are organised in the markets in
question while we have been and still are
content very largely to neglect them
Take the first o f these unheeded avenues
—
for British Trade the vast continent of
Russia For close upon a century we were
estranged from her people T O day they are
knit with ours in bonds of fervent fellowship
—a fellowship cemented in common sacrifice
Russia has a population of 1 7 0 millions M ost
o f them are within four summer days journe y
For years the Germ ans have
o f London
made not merely a study Of these people s
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3
T HE
COM I N G TRADE WAR
needs but they have laid sieg e to the field o f
commerce which those needs c re ate In many
i nstances they have succeeded in obtaining
a virtual monopoly of supply and by their
insistence ubiquity painstaking energy and
admirable and persistent canvassing they
have accustomed the Russian t o thin k that
there is no one much worth trading wi th in
the world save the attentive Teuton w h o
alone sedulously solicits and seeks his custom
But your Russian is at heart a sentimentalist
As M r J A M alcolm the Secretary of the
“
Russian Society very aptly puts it :
In
Russia friendshi p leads to business and
”
business to friendship
The German h as
now lost the Russian s friendship and aroused
the deep passionate and over masterin g
anger of the Slav It is more than probable
that the Russian will be slow to purchase
—
German goods again provided that he can
obtain others that are or appear to be as
good If he cannot well then obvious l y since
self preservation must outweigh sentiment
h e w i l l return like the dog o f the Scriptures
to his vomit What i s being done to d ay t o
se cure for Britain an entry i nto this huge
market "P ractically nothing A f e w y ears
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33
THE COM I N G TRADE WAR
since we made a spurt in the direction o f
awakening Russian interest i n our industries
We knocked feebly at the door which the
Germans had locked and bolted on the other
side We cried falteringly for admission and
the German already comfortably entrenched
within laughed stridently scornfully and
derisively at our lachrymose appeals So far
as Russia is concerned we are a people
Wh ose in s i gh t n ever ha s bor n e fru i t in deeds
Wh ose v a gue reso l ves n ever have bee n fu l fi ll ed
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"
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A few firms o f British manufacturers it is
true had the hardihood to send representa
t i ve s to Petrograd who by an d by returned in
des p air repeating the time worn shibboleth
that the German had so established himself
that to attempt to compete with him was
labour in vain They had forgotten the adage
that no way is impassable to courage The
German had w o n his position by infinite
tact and uncomplaining patience ; we are
losing whatever we might have had by i n
finite complacency and fatuous neglect The
”
Ru ssian merchant and shopkeeper says a
well informed correspondent of Th e Ti mes
is extremely quick to see any advantage for
his business He is easily accessible and O pen
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34
THE COM I N G
T RADE
WAR
eight years an Anglo Russian C hamber o f
C ommerce in Petrograd It is a small affair
certainly boasting only a thousand members
but it
o f whom nine hundred are Russians
could be developed A similar institution
should be founded in London The London
C hamber o f C ommerce h as a Russian section
which claims to have done good work but
something much bigger and more distinctive
is needed We m u st spread our banking
system O ur business houses should be
represented in Russia by Russian speaking
Englishmen Export firms should at once
send young men out to Russia to learn the
language and the conditions of commerce
”
There seems to be no reason
o n the spot
M r Fraser continued
why a deputation
from the Associated C hambers of C ommerce
”
should not tour Russia during the war
There spoke the expe rt and the statesman
but his warning h as been disregarded The
C hambers of C ommerce have n o t despatched
the deputation for whic h M r Fraser pleaded
o u r banking system has n o t been pushed with
Russia and the young men who should have
been sent out a t once to learn the langu age
and to study the conditions of commerce on
f or
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3
THE COM I N G TRADE WAR
—
the spot where are they P Some
doubt
are giving of their blood freely in the trenches
or doing work even more vital to British i n
Foster Fraser suggested
t e r e s ts than M r
But dozens and scores who could be spared
for this profoundly important and patriotic
work are kept here at home engaged upon
tasks of comparatively trivial importance and
o f almost negligible value
Even if there be
any validity in the plea that men of military
age must not leave the country have we no
Englishmen over 4 0 of sufficient res i lience
and of the necessary business ability to act as
o u r ambassadors in this vast continent which
is now waiting hungering and almost plead
ing for the chance of trading with us P C rom
well was over forty when he be came the
greatest cavalry leader of his day Gladstone
had passed the half century when his Budgets
astonished the world M any an advocate at
the Bar achieves celebrity only when his hair
is silvern Without being a C romwell or a
Gladstone or even a rollicking cute
there are plenty of middle aged men capable
of carrying out in Russia the work that M r
Fraser has indicated To day that work is
b eing utterly and shamefully and completely
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37
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THE COM I N G TRADE WAR
neglected To morrow it will have entered
that disma l city over whose gates are for ever
”
ins cribed the mournful words To o Late
Russia with its teeming millions o ff ers
immense and unprecedented opportunities
for British industry SO much is admitted
and this is the market which at present the
great business houses the C hambers of
C ommerce the captains o f industry and our
leading bankers are content to ignore "
We
do not include the Government in this i n
di ct men t As we ind i cated in the previous
chapter : their hands are quite full enough
But that the best brains and the liveliest
intelligences in the commercial and industrial
world should be content t o sit passively
by and allow the trade o f a continent to
—
elude them that surely is a tragedy which
will scarcely bear writing about Unhappily
it is a tragedy that will come to be bitterly
repented when o u r streets may be crowded
with mobs of angry men and o u r workhous e s
filled with sullen women
It may be urged that even if we undertook a
Trade C ampaign in Russia to day we cou l d
not fulfil her requirements That is true
but we could discover them "We c oul d
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3
,
T HE CO M I N G T RAD E WAR
s c ert ai n exa ctly where i n l ay her c hi ef r e
u i r e me n t s and h o w best in the future to
q
satisfy her demands It is very necess a ry in
this connection to note that o n e o f o u r diffi
c u lti es after the w a r w i ll be t o arr a nge f o r the
acqu i sition and e rection o f essent i a l machinery
T o day i t i s the i roni cal and depressing fa ct
that o u r manufa cturers and traders d o n o t
know t o what tasks they sha ll s e t their peop l e
wh en the war is over Their att i tude i s largel y
rel i eved only by the
o n e o f bewilderment
Mi cawb e r i an opt imi sm th at somet hi ng will
”
tu rn up But t h e wi se a nd pru d ent course
al one b y which they c an ach i eve v ictory is t o
prepare beforehand and at once f o r the
conquest o f the markets upon whi ch o u r
whole futu re wel l being and p rosperi ty
depend
There a re very few p eo p le wh o as yet
complete l y realise the pl a ce Russia will
inevitab ly t ake i n al l t h e peacefu l re c on
s tr u ct i o n s which wil l shape themselves after
the war very few wh o ful l y grasp h er re al
posit i on now and therefore are unab l e to
form any notion o f what t h at pos it i on prog
n o s t i cate s i n the future trade w ar an d i ts
econo mic re a dju st ments
a
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39
D
THE COM I N G T RAD E WAR
She wi ll t ake her p art and her p l a c e i n
a dual c apacity She will enter the arena
a n ew world s commer c e both as a
of
powerful competitor a nd a st aun ch coadjutor
a re i nforced and a self rel i ant compet itor
wi th the enemy ; a reclaimed a re ctified
and a rejuvenated c oadjutor wi th the Al lies
This is amongst th e things we do know We
a lso all more o r less vaguely understand that
she poss e sses enormous physical and n atural
resources as a c ountry overlapping tw o co n
We know that s h e possesses a n
ti n en ts
enormo u s potentia l in pr i me l abour p ower
We know that she is in the throes o f l arge
and involved c ommercial developments We
know that s h e is experi enc i ng a great awaken
ing We know that a preliminary stage o f
national abstinence and temperance is but
part of a new mor a le which includes pol i tical
visions o f democratic retrenchments and
reforms In a word we feel th at Russia has
a l ready entered a period O f sincere heart
searchi ng a nd vi vi d sel f revelation and that
thi s supe r venes over her whole teemi ng
and varied peoples from Petrograd in the
n e ar West t o Vl a di vo s to ck in the Far
E ast
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4
0
THE CO M I N G TRADE WAR
We know o r rather vaguel y apprehend
all this But h o w many are aware o f the
historic germination and growth o f the
many moral and e c onomic issues which
onl y since the war with Japan i n 1 9 0 4
have produced her present position and
status "Th e single outst a nding and sur
prising phenomenon wh ic h g reets every
ey e to day is the lo yal and ungrudgi ng sup
p ort whi c h Japan i s patiently giving t o her
erstwhile p rotagonist DO we fully realise
h o w this has come about P And what bearing
it h as upon the future reconstru ct i ons in the
c oming trade war "We O pine n ot We are
wel l aware o f the existence o f the Trans
Siberian Railway as a single vast artery
stretching thous a nds o f miles across the
pristine plains o f two continents along whi c h
military assistance is being projected by the
virility of the Japanese Empire But are
we aware o f the L eviathan proport i ons o f the
Rus s ian Railway Programme and its alread y
large ramifi c ations under Japanese auspices
i n the Far East o f the Asiatic C ontinent "
We know that along the track o f this s i ngle
vast a rtery are already numerous germinal
cent r es o f i ndustria l l ife ; that oil coppe r
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1
,
THE COM I N G T RAD E WAR
s i lver l ead zinc and even gold and coal and
numerous metal and chem i cal activit i es are
in infant and incipient O peration that corn
grain flax eggs butter wood timber are
collected and distributed a l ong the th i n blue
line o f its highway and imported to the s e
shores that from o u r o w n shores are l i ke
wise transmi tted mach i nery metal goo ds
herr i ngs coal etc commi ngling in the
p l exus o f a commer c e as yet onl y in its gi ant
i nfan cy that in all these industrial develop
ments in Russia there are in course o f gro wth
quite new industries supplementing those
in continuous growth amongst the O ld And
we a p prehend that al l this portends qu ite
fresh and expand ing re l ationships i n e c ono mi c
and trade enterprises with ourselves and the
Allies general l y We know all these things
we repeat with more o r less acuteness o f
detail o r sign i ficance o f impo r t But o n e thing
we venture to think our countrymen do n o t
realise an d it is this As Rus si a h as b ecome
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merg ed fr om
th e Fa r Eas t e n or mous energ i es of mil i ta ry
for ce whi ch will con tr i b ute to a n i mmedi a te
s e ttl eme n t of th i s b l oody con i c t s o by th e s a me
fl
t
ewa , a n d a l on
a
t
s
a
a
r
t
e
h
e
m
e
e
r
i
es
w
i
l
b
l
,
g
y
g
th e g a teway
th r oug h wh i ch
h as
,
2
4
e
TH E COM I N G TRADE WA R
in dica t i on o f Russ i an r app or t with J a pan and
other neighbo u ring countries in the Eastern
fields of enterpri se The history O f t h i s I n s titu te
during the 1 7 y ears o f its exi sten c e is s ym
b o l i ca l o f Russ i an o ffi c i al e ffort to foster and
deve l op conne ctions o f culture and commer c e
with Jap a n and her O riental neighbours It
is a repository o f l iterary and art tre asures
It i s a Polyte c hn ic o f courses o f stud y
e spec i al l y in l anguages and general edu c ational
equipments f o r c ivil e c ono mi c mi l itary
political and commercia l o ff i cia l dom
Its
membership and p er sonel le are cosmopolitan
and it enjoys the patronage and support o f
v a ried representat ive p ersonages an d peoples
It possesses its o wn po lyg o t library and period
i cal organ It possess es also the quality o f a
sort o f mi litary station f o r the avo i dance o f
coll i s i on between Russi a and her O riental
ne i ghbours It is i n fact a great P eace Inst i tute
and C ommer c ial C ollege e ffect i ng u ni son
and fusion o f interests between d iverse
peoples It h as grown w ith the industr i a l
growth of E aste rn As ia such industrial growth
having proceeded largely thr ough the enor
m o u s energies o f Japanese enterpri se And
thi s Inst i tute in which the English and
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44
THE CO M I N G T RAD E WAR
French languages and institutions are studied
amongst Russian and O riental is utilised by
peoples wh o are mutual l y interested in under
standing each others characters and needs
f o r the c ommon cosmopolitan intercourses
peace humanity and commerce This
of
Institute is the symbol and significat i on o f
the root quality of a great pacific people The
Russians detest and despise the arroga nt and
domineering character of the Prussian spirit
infesting their Western borders and having
become interlocked with the Japanese com
merce and enterprises in the East they now
seek to e ff ect further strength and growt h
through the embrace o f an equally pacific and
humanitarian people in the Western World
the Allies It will become O bvious therefore to
the deeper student of these matters that more
t han the development o f Russian i nternal
resourc es are involved in the readjustments
and reconstructions of the coming Peace
She had already grasped hands across sea
and continent with Japan before the present
outbreak She will become the medium of
un i son between the O rient and the O ccident
where hesitating o r recalcitrant races like
Turke y C hina M anchur i a
Korea or
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45
,
THE COM I N G T RAD E WAR
M ongolia are concerned She wi ll be come the
great student pacifier and regulator Of
peoples to o remote f o r the persona l tou c h o f
the Westerns She wi ll become t h e great
interm ediary the isthm u s bri dgi ng the v ast
distance s b y l and And along the p l ains and
steppes o f Ru ssia wi ll ro ll a flood o f tr affi c
from the Far E ast meet ing and mingling
with the s u r gi ng spri ngs o f trade a l ong her
overflowing into t h e m arts
o wn rich lands
and markets o f the Western world
But th e Ru ssian market is n o t the onl y
o p portunity that the war h as created f o r
Bri t i sh trade an d commerce We have a
graver re p ro a ch at hand in Ital y
Ital y has ha d a brilliant although i n some
respe cts a distracting c ommercial h i story
Her economic status like her political stat u s
h as fluctuated through precar i ous stages
nevertheless she h as always been as fam o u s
i n crafts and fine art wares espe c iall y silke n
fabri cs as she h as been renowned in he r
political exp loits The historic seven in d e
pendent States Of the peni nsu l a were them
selves so stratified originall y as to cut
geographicall y the natural channe l s o f trade
At o n e time a M il an manufa cturer s h ipp i ng
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4
T HE COM I N G T RADE WA R
ilks to Floren c e h a d to p ass through eight
c ustoms stations in about 1 5 0 miles And a
m erchant pro c eedi ng o n his way from Bologna
to L u cca was held up at n o less than seven
s u ch stat i ons o n a route o f about 1 2 5 miles
These p hys ic al and fiscal conditions a l one
embarrassed national trade development
without the severity o f the political cata c lysms
wh ich have rent t hi s unfortunate c ount ry
down to the nineteenth c entury When
po l itical u n i ty h ad finall y been accomplished
it then seemed ineffe ctive in complete ly
freeing trade and industry from some a d
mi tte d ly bad form s O f protection despite
the extensive seaboard
These forms preva il i n cons i derable degree
Still since the eff orts O f the
to d ay even
—
i ll ustrious tri umvirate C avour the states
man M azzini the thi nker and Garibaldi the
—
revolution i st general accomplished the unit y
and freedom of their beloved country a
l i beral me as u re o f c ommercial unity and
prosperity rapidly followed N evertheless it
can scarcely be said that since 1 8 8 0 up to the
p resent time the vol u me o f commerce has
been commensurate with the nat i on s large
population and politi c a l i mp o rt an c e
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47
THE CO M I N G T RA D E WAR
In the recent past especiall y Ital y has
made brave if somewhat convuls ive e ff orts
to remed y man y ingrained flaws i n her c o m
me r ci al system although i t i s re c ogn i sed by
c ertain of her economic authorities that there
is much yet to be ac c omp l ished And especially
at this time it i s thought that c ertain financia l
and trade divergencies should be adjusted if
the comi ng r appr och emen t between Italy and
ourse lves is to be ren d ered c omp l ete and
mutual l y beneficia l
We naturall y hes i tate to ado p t to o cr itica l
a tone in these matters and we are quite alive
t o the magnificent accomp li shments o f o u r
Ally in industria l and fis cal growth But
some things must be frankly and squarel y
faced if reciprocal relations are to be estab
l is h e d and kn i tted in perfect and equili brate d
servic e
We o f course cannot shut o u r ey es to t h e
fa ct that Italy wi th its population o f some 34
millions and i ts geographi cal area O f some
square miles is a highly protected
country and that certain evils are traceable
to the excessive application o f prote ction
Wages are abnormally low and cost o f living
high Both agricultural and manufa ctured
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8
4
THE C O M I N G TRADE WA R
i mports h ave su ff ered from immoderate
dut i es ; and th i s tends to militate against
progressive increase in the volume of pro
duction as it a l so does against the indivi dual
powers o f the human uni t o f economi c
exert i on Ital y i s thus not so famous for great
leaders o f successful industrial enterp rise
tech nical knowledge and bus i ness energy
O n the c ontray as Signor Lu zz atti h as quite
recently said there is undue and ex c essive
speculation i n exchange And the country
h as groane d under the l av i sh expend i ture
of capital with its expen s ive merchant
marine and excessive freights L ike o u r
selves too agriculture once s o propor
ti o n at e l y large and important has had to
struggl e in competitive antagoni sm with
industria l growth and i n fl ati on s and even
yet needs fostering in the i nterest O f a sound
economic system In fine anyt h i ng l ess than
vita l changes i n her e conom ic system wi ll fai l
to serve Ita l y as the groundwork in adjusting
the l arge adverse ba l ance in her trade relat i ons
with the United Kingdom Fo r at the present
roughly she sends us litt l e more than o n e
ha l f the commodit i es that we send her And
agai n about o n e h a l f o f o u r own exp o rt s to
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49
TH E COM I N G T RAD E WAR
It aly are in the form o f coal St il l we d o n o t
desire to look to o much o n the l ess favourab l e
s i de in regard to Ita l y O ur cr itical remarks
are designed to c l arify the situat i on to some
extent and whilst they are intended to frankly
indicate the character o f t h e gap which has
hitherto separated o u r Al ly from ourse l ves
and the l ead ing nat i ons in the wor l d s industry
and commerce they are n o t intended to
i mp ly th at that gap i s unbri dgeab l e b y any
means
Di fli cu lt i e s there are Of course and the
thought l ess man makes them a stumb l ing
block the wi se man o n the other hand makes
o f them a r i nging challenge and an insp i r i t i ng
battle cry Both Italian agricu l ture and u rban
industri es o ff er vastly richer promises f o r
the future Al ready there is to be seen an
ever wi dening desire in the c ountry i tself to
approximate British methods and to adopt
alread y may
o u r o w n more liberal system
be witnessed a really hearty wish to c ome to
closer grips of c ommercial friendship and
interchange wi th ourselves
It is a mistake o f course to suppose that
industry is an a ff air o f the heart o r that the
people o f a country trade only with those to
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5
THE COM I N G TRADE WA R
ori gi n That assumption is purel y falla ci ou s
but i t i s as we believe the major de lu s i on
upon wh ich the Bri tish are rel y ing t o day to
win the trade war a war that as we fond l y
hope i s over before i t starts Depend upon it
w e are wrong As M r Venus the Cle r ke n
”
well
articulator
rem arked
there are
s trin gs that must n o t be played u p on
”
a lways The sentiment o f the Al lies wi l l n o t
once the w ar is finished c arry them s o far as
a boy c ott o f German goods and if therefore
w e re ly upon sentiment alone to achieve
victory in the very arduous c onfl i ct before us
w e shall be b i tterly unde ceived But when
this i s s ai d all is n o t said C learl y sentiment
though i t i s n o t the determining factor in
these matters does count to a very c onsider
able degree a nd there can be no question
whatever about it that for long after the war
the Italian like the Russian wi l l c ertainly
prefer to buy Br i tish rather than Germ an
goods ; indeed he will only purchase the
latter becau s e no contra i nducement is being
held o u t to him The negle ct of the Itali a n
market in fa ct is o n e degree l ess dep l orable
than o u r disregar d o f the new oppo rtunities
that t h e wa r has c reated for us in Russ i a
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2
5
THE C O M I N G TRADE WAR
what i s the position "Fo r decades p a st
Germany h as sedulous ly cultivated the land
wh i ch England helped to free from her Ally
—
the Hapsburgs and subsequently chose most
regrettabl y to ignore To day we have h o w
ever the chance Of maki ng good o u r long
negle ct o f the nation for whose l iberat i on
Englishmen fought shoulder to shoulder with
Gariba l d i to achieve Let it not b e th o u gh t
that thi s i s merely an enthusiastic accl am
ation o f o u r o wn ind ividua l opinions It is
If o u r readers
confirmed by ex p ert v i ews
turn to Th e Ti mes Trade Su p plement o f
Apri l they wi l l find the fo ll owing remarkable
confirmat i on o f th i s vi ew
The fri en ds hi p
”
between Great Brit ai n and Ital y s ays The
Ti mes
i s o f long standing the aspirations
o f the It a lian people to become a free a nd
i ndependent nat i on have al ways el ic ited the
warmest sympathy i n England and the prae
t i cal expres s i ons given to it have served to
forge a link wh i ch h as always proved strong
enough to resist disrupt i on by po l it i cal
”
strain
The union between the tw o nations as
re cent evidence h as shown has held because
its ele ments a re the co mmon pri nc i p l es wh ic h
Fo r
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53
THE CO M I N G TRADE WAR
stand f o r human progress It has survi ved
the fact that Ita ly dri ven b y po litical i n
t e r es t h as f o r 30 years fretted u nder the yoke
o f the Triple Alliance
N o w ho w ever that
she h as broken with t h e C entral Emp i res
s h e i s free to add to the links wh i ch unite her
t o Great Brita in t ha t o f a c loser commerc ia l
”
re l at i ons hi p
We ca n d o mu c h m ore than h itherto to
extend that re l ationshi p but we are o f t h e
Opini on t o o that much a l so m ay be done b y
Ita ly to fac i lita te i t A pre li m i nary sentiment
wh i ch i s c lassic h as long bound us to Ita l y
as i t has in the case o f Greece In the back
ground Of the B ri tish mi nd there i s a stand in g
s ympathy an d adm i rat i on asso ci ated wi t h her
i llustr i ous ant i quity her magni fi c ent monu
ments and memori als o f a co l ossal p ast
her medi ae va l beaut i es o f archi tectu re her
superb accomplishment s in art
Thi s
romantic atmosphere appears to have t e
l
l
forestalled
utilitarian
i
nte
r
c
ourses
e
d
r
e
o
p
However it may be Ital y is vi sual i sed
as an arena for the touri st rather th a n
a great m a rt f o r internationa l barter
On
the other hand it must be rem a rked
that Italy ha s shown jea l ousy o f ce rta i n
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54
THE COM I N G TRADE WAR
industries as for instance her cotton
and woollen i ndustries which although
highly protected have not been remarkable
f o r their progress It cannot be denied that
by im p o rtant developments in Electrical
Engineering in ship building in automobile
construction Italy gives evidence o f high
rank in ente r prise and design But then
again the British manufacturer must recog
nise that the sinister pressure of the Ger
man with his subtle e ncroachments o n
the C ontinental M arkets in the case of
Italy
demands
serious
consideration
This sinister influence was to be seen
t o the extent even of favouring newspaper
advertisements in Italy According to Signor
Luigi Lo gan o w r iti n g in the Econ omi a I ta li a na
the gain o f the C entral Empires at our expense
has reached an enormous aggregate We
have only to glance at the following table
published in that journal to realise that the
Teuton has made full use o f the opening
which we have chosen to disdain Here are
the figu r e s which make pla i n his gain and
o u r los s
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55
E
THE CO M I N G T RAD E WAR
G t. B
C otto n pi e c e goods
W oo ll e n pi e c e goods
S il k goods
R aw w oo l
w oo ll e n waste
L ea t h er
B oot an d s h oes
P i g i ro n
Met al s c r ap s
Stee l 8 i ro n ( w orks t h ereof)
C o pper bra ss an d bro n e
( n gots s c r ap s filin gs )
C o pp r bra ss an d bro n e
( b a rs s h eet or w orks
t h ereo f)
machin ery an d
B o il ers
pa rts t h ereof
O p t ical an d e l e c tr ical i
m
S il verwa re
N w s hi
C o al an c oke
R ubber g tta p er cha an d
a r icl es t h ereof
C o l ours an d d y es
Ch e mi al man ure
Su lpha tes an d s ilica te
Min er l
P a ra ffi n an d m otor
W oo d p u lp
s
:
i
L
G
i re
L
,
s
,
i re
ustria
L
i re
4 18 5 71 9 5 4
31 337 1 2 7 2
5 1 7 3 2 1 30 9
1 x# 5 5 1 5 7 0
I
9
,
7 fl 37 1 66 0
I
1
37 3, 25 0
1 59 .
899
2,
z
,
,
A
2 ’ “16 1 0 4 5
,
e
er many
z
,
,
ri tain
,
,
2 4 1 6 20
1
9 3
l
a
s t ru
e n ts
e
8
,
-
u
331 388 : 20 3
,
t
c
l
x$ 24 4 ,
79 2
7 1 6 l 7 1 79 5
‘1 8 2 5 9 35 2
s
1 , 9 70
a
99
v
l
9 , 35 2.6 5 x
It i s evi dent from thi s table as The Ti mes
c orrespondent points o u t that the imports
from Germany in the y ear 1 9 1 3 amounted in
v alue to a total o f
lire and o f th i s
total nearly 60 per cent i s in manufactured
produ cts N early 2 5 per cent o f Ital y s tota l
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5
THE C O M I N G TRADE WA R
i mp o rts emanated from Germany and Austria
Hunga ry In text il es particularly silk in
l eather stee l and iron and n o n ferrous metals
in m ac hin ery in optical instruments in
ru bber c o l ours and dyes in wood pulp the
paramount cy 0 f the German in It a ly is c l ear
O n ly i n coal i n c ertain groups o f chemical s
i n ship s and raw woo l and woollen waste h a s
t h e Br it i s h m a nufa cturer at present any i m
portant stan d i ng in the Italian markets
The sour c es o f this power o f dominat i on
wi e l d ed b y the C entra l P owers and es pe c ially
those p ecu l iar t o Germa ny rea l ly requ i re
cl ose study The y rest p ri ma rily in the
Ka rtel l s yste m Of syndi cation whi ch covers
and inter l ocks the wh ole commerc i al and
i n dust ri al face o f the Emp i re This Ka rtel l
system i s s o organised in its monopol y o f
markets as to comm an d the highest s ca le o f
p r ic es t h e ne arer del i very i s t o the c entre o f
product i on That is to s ay prices take o n a
gradua l ly dim inishing scale as the c ommodity
passes from the foci of m a nufacture to the
c i rcumference o f deliver y Thus the pooling
o f h u ge p rofits in t h e nea r markets p ermits
o f d u m pin
i
n
t
h
e
far
markets
T
h
us
a
lso
ca
n
g
German y c rus h c o mp etit i on i f she des i re it
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57
THE COM I N G T RADE WAR
i n fore i gn markets by dump i ng goods at
profits whi ch may di min i sh to the point o f
invi s i b i l ity and yet susta in n o actual l oss i n
the bulk o f output We sha l l take the o ppo r
tu n i ty t o revert in more de tail t o this Ka rtell
system M eanwhile British traders may be
sure that i n addition to this fu ndamental
advantage the German takes i n fin ite care to
study the l ocal requirements o f the m arkets
he des i res to capture to provide e asy and
su itable terms o f credit as wel l as preparing
and provid i ng the ne c essary banking arrange
ments and facil ities Furthermore a carefu l
s c rutiny o f the foregoing table o f Italian
imports wi ll n o t fai l to reveal obvious over
tures wh i ch the British trader may at once
make Ital y h as always been a large bu y er o f
o ur c oal I t is a v i tal and incre asing necessity
We
t o her i n her expan d i ng manufa ctures
i ncline to the vi ew that o u r export o f c oa l
should be alway s ca refully safeguarded i n
o u r o wn home interests
Why could not the British exp loit the list
previ ous l y given in the exte ns ion o f delive ri es
o f pig iron t inplates agri cultur a l a nd texti l e
ma c h inery c ement maki ng p lant cutle ry
c hem i c al s c otton and lin en goo ds an d s al te d
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5
,
THE COM I N G TRADE WAR
frequent di fli cu lti es as to terms o f p ayment
and the lack o f banki ng faci li ties o f the ri ght
kind The need f o r a c loser fin a nci a l c0
O perat i on h as been long apparent and it is
satisfactor y that the movement f o r the form
ation o f an Anglo Ita lian b ank has n o w
reached a definite stage It is the German
financial compet i t i on i n Italy wh i ch h as
proved o n e o f the greatest handicaps to ot her
nations seeki ng a foothold i n th at market
and Great Britain has su ff e red the addition al
disadvantage that the German bank i ng
organization most closel y in touch wi th Italian
markets has had a bran c h in London through
whi c h i t attempted to exer c ise contro l o f
many o f the financi al tra nsactions arising o u t
”
And he goes o n to urge
o f British trade
with great force the formation o f an Anglo
Italian banking organization which at this
jun cture with the end of the war not yet full y
in sight would be a call to the Brit i sh trader
t o l ose n o time i n maturing his plans for an
atta ck o n Germ a n trade in Italy To wait
until after the war would be to play the game
o f the enemy Evidence has been g iven th at
in spite o f the drain o n her industri al
res ources ca used by the p rolongat i on o f
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60
THE COM I N G TRADE WAR
hostilit i es Germany h as perfe cted plans f o r a
vigorous o ff ens ive in foreign markets at the
e arliest poss i ble moment It is c e rta i n that
the mo st strenuous eff orts wil l be made by
the enemy to retain s o important a market as
Italy In c onfirmat i on o f this belief there is
the defini te i nf ormation that agents o f German
chemi c al manufa cturers are already endeavour
ing to book c ontracts from Italian houses f o r
deliver i es after the war o f the enormou s
stocks wh i ch i n this and other trades are
believed to have been a c cumu l ated f o r a
dumping campaign wherewith to O pen the
bitter commercial fight which wil l then be
”
waged
Cl earl y the need for a ct i on al ong these
—
lines is obvi ous nay it is gross gl ari ng
palpable But the wheels o f o u r chari ot stil l
—
linger and time valuable time is be ing
l ost
So mu ch f o r I taly and Ru s s i a They d o
n o t stand a l one There i s a th i rd and perhap s
an even greater market over wh ich the
G ermans held a lmost complete sup remacy
till the war destroye d her Far Eastern trade
—
a tr a de that
be it noted we developed
long before the Fath erland had dreamt o f a
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,
T HE
COM I N G TRADE WA R
fleet C hi na wi th her co u ntless teemi ng
millions was first traded with b y the English
men N o w that Germ any has temporar i ly
gone out of bus i ness and while America i s
busy coining gold o u t o f the blood of Europe
C hina has no o n e to trade with her And y et
think o f the prospects that her development
opens to the European C hina in fact o ffers
u s in the future opportunities that transcend
those possibly o f any other country and those
golden opportunities will be opened up we
believe in the way we have described But as
with Russia and Italy s o with the flowery
land The German trader l s thoroughly i n
formed quite alive to the superb openings
that we have indicated His trade with the
Far East as with Italy and Russia is well
organised intelligently hand l ed vigorously
administered It is the British who remain
indi fferent and unrespons ive content to let
the commercial sovereignty in these great
realms p ass into the hands o f the enemy
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C HAP TER I II
T HE
GATEWA" OF
THE
EA ST
HE first step towards the solution o f
a problem is somebody has shrewdly
r emarked the correct apprehension
o f the facts If that be true then we shall n o t
have l aboured wholly in vain in O ff ering these
pages t o the world for at le ast they will
have helped to dispel that distressing but
most mischievous fallacy which h as blinded
the vision o f o u r rulers and threatens to make
o u r people themselves imagine a vain thing
the fallacy that pretends we can recover from
Germ a ny the lost regions of British trade
wi thout a struggle f o r them o r at al l events
without that preparation organisation and
adaptation of means to an end in the absence
of which struggling is in vain Thousands o f
o u r fellow countrymen have permitted them
sel ves t o be persuaded that o u r trade war with
Germany is won ere y et the first preliminary
skirmish has been entered on That way
madness li es If there be o n e thing cry stal
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63
THE C O M I N G TRADE WAR
clear in this matter it is that delay is n o t
—
merely dangerous it i s posit ivel y fatal The
policy o f waiting o n events i s an invitation
t o the future t o d e stroy u s and that masterl y
i na ct ivity which o u r optimists s o dearl y
cherish seems to us dangerously like that
creeping paral ysis whi c h is the precursor o f
the end The time to deliberate to plan to
—
arrange ay e and t o a ct is now
,
.
,
,
,
.
,
,
,
m ov i n g fin ger w ri tes an d ha v in g wri t m o es o n
all y our pi ety n or all y our wi t
N
Can call i t b ac k to canc e l hal f a lin e
N
all y our tea rs wa s h out o n e w ord of i t I
Th e
,
ot
v
,
,
,
"
ot
We must rid ourselves at on c e o f the burden
though it be feather
o f an optimism that
brained is yet to o heavy f o r any nation
however strong to carry ; an optim ism
which leads n o t to increased exertion to
further i ni t i at i ve to more strenuous e ffo rts
but which confirms us in the sloth the
d i gnified re p ose the inert i a that h as allowed
P russia to be c o m e n o t o nl y the first military
nation in th e worl d but perh aps the greatest
mer cantile and i ndustri al org an i sat i on that
ever threatened mank i nd
L et us l ook ca lmly and resolutel y at the
fa cts look at them so that we see them i n
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64
THE CO M I N G T RA D E WAR
their true propo r tion
see them steadily
”
and s ee them whole We have seen that in
at least three great markets o f the world
Germany i s still predominant and that we
have n o t s o far made any really serious e ff ort
t o challenge her supremacy The policy o f
”
“
wait and s e e of postponement of pro
of
doing nothing with a deal
c r a s t i n at i o n
”
has already cost us clear In Russia
o f ski ll
—
perhaps the most valuable o f the three
—
markets the resultant losses have proved
s o c ostly that it is well worth examining the
facts in detail Those facts are a ghastly irony
o n the present confidence of o u r traders and
men o f business Fo r they S how that even in
the case o f goods produced no t in the Father
l and but b y ourselves within the Empire
goods that Germany had actually herself to
import before s h e could tr a de i n them and
t o import f o r the most pa rt from us that even
with these s h e captured the m ajor portion of
the Russian market
Cotton c o ff ee jute vegetable oi l s and
—
wool these raw materia l s are n o t German
products ; they are with the exception o f
cotton in which America is supreme staple
produ cts o f the Br itish Emp ire Indeed s o
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65
,
THE COM I N G TRADE WAR
’
considerable had Germany s import o f o il
fruits and o i l seeds for treatment for domestic
consumption and for export become that the
Union o f Dealers at the Produ c e Exchange
o f Hamburg in 1 9 1 3 took the i nitiative in
supplanting the s o called
London co n
”
tract by a German contract
The fact
says a great authority on Anglo Russian
‘
trade
the fact that Germany secured so
much of the export to Russia that should have
been i n o u r hands and the middleman s
profit in the supply o f the Russian market
seems scarcely creditable to Br itish enter
pri se The handling by O ur enemy o f those
C olonial products was indeed a danger in
s o far as it tended t o the expansion of Ger
many s mercantile mar ine and the related
growt h o f Germany s hostile navy The same
may be s a i d o f Germany s great lead o f u s in
the supply o f unmanufactured metals though
her ascendancy in that respect is sca rcely
surpr i s ing when we reckon wi th the grip that
the German metal octopus had secured even
In
o n the production of the Bri tish Empi re
1 1 3 Russia imported tin and lead t o the
9
of which J€ 8 9 6 0 0 0 worth
value o f J(:2 4
M r R J B a rrett E d i tor of Th F inanci er
-
-
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,
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’
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e
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66
"
.
THE COM I N G TRAD E WAR
otal
imp orts
T
er man
p ro port i o n
G
an d p etro l eu m m oto rs
Se win g M achin es
D ynam o e l e c tr ic te l e ph o e an d te l e
graph appa ra tus
Pu mp s c o mp ressors
Ste am e n g in es
T yp e w r i ters
i g machin es
Pl
M achin ery f te t il e in dust y
For typ ographic in dustry
For millin g in dustry
V a r i ous in stru m e n ts an d too l s
La t h es
A gric u l tural machin ery
Ga s
-
n
-
.
an n
or
x
r
Let i t n o t be thought that t hi s i s a so li tary
example o f Germ an suc c ess We may run
t hrough the who l e g amut o f Ru ss i an i n
d us tr y anal y se her i mpo rts compare and
value her pur c has es and everywh ere the
same de p ressing s e q u e ls : c o n front us In
chemic al products i n co l ours a nd dyes in
steel i n meta l i n hi des ski ns a nd furs in
almost every trade in pra cti cal ly every in
d u s tr y we have been ignom i n i o u s ly routed
by o u r ub i qu i tous enemy w h o h as c ontr ived
to defeat us even in those br a n c he s o f manu
facture where o u r supremacy h a d h itherto
been u nchal l enged Says M r Barrett :
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68
THE CO M I N G TRADE WAR
The c ompar at ive tab l e o f Bri tish and
Ge rm an i mports into Russ i a shows that
Germ any contributed
o f Russia s
total i mport o f chemi ca l s a nd drugs amount
whi l e the Uni ted Ki ng
i n g to
dom s share w as only
It al so shows
th at o f Russ ia s tota l im port o f colou rs and
dyestu ff s amounting to
the
and the Bri t i sh
German s ha re w as £1 0 5
only
O ne of the m os t impress ive
l essons taught by t hi s war i s the wor l d suprem
a cy o f Germ an y in chemica l i n d ustry and
Br i t i sh l axi ty There is good evi den c e that
we are l ay ing that lesson to heart and Russ i a s
d ir e need n o w th at supplies from Germany
a re cut o ff has led to s uch i ns i stent dem ands
o n o u r market that the foreign a s we ll as the
domesti c i mpo rt an c e o f b i g deve l op m ents
”
here i s man ife st
To s umm a ri se the s i tuati on we find that i f
w e exam ine Bri ti s h and German proport i ons
o f Russ i a s pr i n c ipal imports in 1 9 1 3 Ger
man y had secured a lead i n the ra c e that was
nothing sho rt o f sta rtling Here a re t h e figures
as gi ven b y M r B arrett him self
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69
CO M I N G T RAD E WAR
R U SS I A S P R I N C I P A L I MP O R TS I N
9 3
i a E uro p e an R usso F inni s h an d B lac k Se a Fro n t i ers )
MA P
G
H G
T AL
H A
O
T ot al of
B ri t i s h
G er man
G rou p
p ro port i o n p p t
THE
’
(
v
1
-
,
B R1T 1S
ND
1
N
ER
.
R O P O RT I O N S
’
F E AC
RO U P s
OT
.
'
rO
6x
soo
7 1 5 34 1 30 0
3
1
:
30 9 70 0
,
,
X
n
1
5 37 1 5 0 0
,
,
n
é
nimal Fa ts an d O il s
Ch e mical p rodu c ts an d
ma ter ial s
C o al
C oke
C o ff e r aw in th e be an
C o l ours an d Dy estuff s
C otto n r aw wa ste
A
e
or
94 1 1
t ssues
F i s h h erri n gs s al ted an d
s m oked
4 38 4
H i des Sk in s Furs r aw an d
p re pa red
5 75 8
58 7
J ute an d J ute C o m b in gs
Machin es appa ra tus an d
pa rts t h ereof
M et al s u nman ufac tured
tot al of
Met al M an ufac tures
Of w rough t i ro n an d stee l
Wi re an d man ufac tures of
f
V a r i ous m et al m
tures incl ud in g han d
tool s f tra des
P ap er an d man ufac tures f
S il k ra w an d c o m bed wa ste
Win e s pi r i t an d li q ueurs
T
( incl ud in g br ic k te a )
T ob acc o an d man ufac tures
of
V egeta b l e o i l s
W
W oo l u nc o m be d an d c o m
bed
W oo l y rn
35 7 5
W oo ll e n or hal f w ooll e n
man ufac ture
I ncl ud in g C rude G lyc er in e
I
i
:
,
21
,
,
1
00
1
00
7 6 0 1 30 0
,
1
0
1
,
00
31 4 79 1 5 0 0
7 I 1 40 0
,
,
I I
75 1
‘'1
’
30 0
:
,
3: 4 96 i l 0 0
:
1 9 532 1 9 0 0
1 34 1 5 0 0
a nu a c
or
o
x1 37 5
,
70 0
,
ea
g 5 s 20 °
1
ax
.
,
a
,
s
0
7
00
31 0 9 1 1 7 0 0
5 0 71 6 0 0
1
r
‘7 31 7 0 0
THE C O M I N G T RA D E WA R
we would d o well to pause here and
as k ourselves h o w i t i s that Germany i s
enabled to obtain s o masterfu l a command
n o t merely o f t h e Russ i an markets but of the
world s markets in general In order t o defeat
the enemy i n ordinary warfare the first thing
we do is t o reconnoitre and est imate the
nature and strength o f his position To defeat
Germany i n the Trade War and to reduce
her to a position o f economic subordination
at le ast economic equality would be the
or
highest obje ct o f patri ot i sm s i nce without
her vast surplusage and reserves O f wealth
over and above her compet itors S he cannot
again pile up armaments in preparation f o r
another raid u p on civi lisation The question
i s h o w best to eff ect th i s P We mainta in that
the answer i s to be found to a very cons i der
ab l e extent in a study o f the enemy s o wn
methods and in certain i nstances in an as
s i mi l at i o n o f those methods
L et us therefore briefly exam in e the co m
me r ci al system o f Germany wh i ch o u r Al lies
Russia and France may well be assumed to
be more familiarly acquainted wi th through
being neighbours and having been vi ct imi sed
b y Ge rmany s i ngen i ous li tt l e ways
N ow
,
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I
7
F
THE CO M I N G TRADE WA R
We have already dealt with and shall i n
future chapters continue to refer to var i ous
mi nor but not less important features for
the study and guidance of o u r readers But
the tw o fundamental features o f the Germ an
system whi ch merit o u r earnest attent i on
are (a ) its peculiar methods o f Prote ct i on and
monopoly an d (b ) its d i st i n ctive methods o f
Banki ng an d C redit As in a future speci al
chapter we propose to set forth the latter it
i s here that perhaps the former m ay be briefly
and usefully des cr ibed
The Intern ational P arl i amentary C on
ference lately convened in P aris discussed
measures o f p recaution against the du mp
ing o f accumulat i ons o f German goods after
the war Whi l e the apprehensions o f Germ an
activities in this direction may be somewhat
exaggerated there is n o doubt that the enemy
will resume them at the first opportunity
The assumption of large energies to this end
ma y be prem ature The production o f goods
f o r exp o rt to an y c onsiderab l e extent mu s t
i nevitably have been suspended through the
absorption o f national energies in sanguinary
warfare and the stress o f obtaining th e
immed iate ne c essaries o f li fe Desp i te the
,
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2
7
THE COM I N G TRADE WAR
state m ents o f certain Swedish p ape rs r e
specting the prodigious production and storage
dumping pur
o f goods in Germany for
poses ; it seems that according to the i n
t e l l i g e n ce branches o f o u r Home Departments
fears o n this head may be much discounted
N evertheless there can be no doubt that the
vast machinery and mechanism for dump
ing will at the first opportu ni ty be set in
motion by the c ombined energies of Germany
and her A l lies
N ow the mach inery f o r
dumping
is
i dentical with the whole structure and
me chanism o f Germany s highly organised
system of syndicated industries which may
be said to be entirely peculiar to the country
It has a certain bearing upon o u r o wn as yet
incipient ideas of t a r ifli s m which are in the
air as a weapon to be used against the enemy
but which are not yet reduced to definite
formul ae A description will i n ter a li a suggest
the nature of the weapon and this weapon
will prove t o be we think a form o f Pro
t e cti o n that will not a ff ront those i ngrained
pri nciples o f Free Trade which have u n
deniably characterised o u r o wn c ommer c i al
history and development
,
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73
THE CO M I N G TRADE WAR
As Ri chard C obden has become f o r t hi s
country the fount and origin o f Free Trade
and a national sa i nt for the po l itical econ
o mi sts
s o i s Friedr i ch List regar d ed as the
father o f German Protect i on and the
pres i ding deity o f their great protective
system the present Kartell system A certa i n
school in Germany however contend that
the final upshot o f L ist s theory was in reality
n o t Protection
but Free Trade However
that may prove to be L ist admittedly a d vo
c at e d
as the b asis o f his doctrine the i m
position o f duties necessary to protect
industr i es i n thei r p er i od of i nfa ncy The
history politically speaking o f the growth
o f this idea into the system of protectionist
solidarity now extant we must leave aside
We content ourselves with describing what
a large proportion o f the German trading
community regard as its logical outcome
Germany is dominated in policy and
practice by a constantly in c reasing ministry
I t is a thing
o f protection and monopoly
grown and cultivated f o r home powers as
well as for foreign influence And the tyranny
o f its internal operation is no less than its
external
Protection i st solidarit y
is its
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74
THE CO M I N G TRADE WA R
these and a ll such rules o f the Kartel l the
executive may use the right to control co m
mo di ti es delivered o r i n tr ansit o r to inspect
books documents and correspondence A
common o fli ce o r dep ot may be the centre o f
thi s routine of espionage and regulat i on
through whic h transactions pass for all the
separate and subordinated con c erns under
th e Kartel l It all reminds us o f the o l d pr i n
ci pl es and polic y of the medi aeval guilds
Amongst the remarkable e ffects o f t h i s
—
organisation whi ch we cannot stop to full y
—
particularise it may be noted that the retai l
mer c hant has c e ased to exist he h as become
a mere agent It is l aid down from whom he
may buy He buys from th e Ka rtell governin g
his geograp hi cal area The buying and th e
selling price is fixed f o r h i m And more the
sort o f goods Stil l mo re the distri ct where
he may sell i s pr escribed
These Ka r tells largel y embody the p ro
d u ce r s o f raw material : c oal rolled iron
meta ls in raw forms and s o forth The
passage o f r aw products to the finishing
ind ustri e s being similarly controlled and the
finishing industries themselves being also
enrolled into Kartells all this completes the
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7
THE COM I N G TRADE WAR
p i cture of a solid interlocki ng o f national
commerce into complete protective solidarity
M uch more may be said But it may be
finally pointed o u t how this system facilitates
dumping In England you buy coals cheapest
at the pit s mouth the price increasing by
natural gradations according to the distance
In Germany the reverse is the
o f delivery
c ase Prices are highest where an industry is
carried on because monopoly o f production
and distribution is complete for the given
geograp h ical area The incidence of com
p et ition increasing in acutenes s with the
distance from that central area prices com
mence to sink But such competition is the
more easily borne be ca use the maximum
profits o n an y given commodity have already
been secured in home markets It i s obvious
therefore that large surplus e s o f goods are
ava il able for dumping on distan t markets
wi thout real loss C ouple wi th this Kartell
protection the imposition o f prohibitive
duties at port o r frontier and also the height
e n i n g o f railway freights from frontier t o
interior and y ou have a graphic representation
o f the solid front o f prote ct ion which Ger
ma ny p res ents to the wor l d un d er c over o f
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77
THE COM I N G T RAD E WAR
which she discharges her c ommercia l gu nnery
into the outer markets o f the earth
N o w wh at is to be o u r method o f defen ce
o r atta c k a ga inst thi s entrenched pos i tion o f
the enemy in the tra de war P The c ourse o f
this essay from first to last will h ave we hope
”
suggested many p o i nts Every
bullet
”
w e trus t wil l find i ts
b i llet
But we
would l ike to bri efly evo lve a s i ngle po i nt
re l ating to th e weap on o f protection wh i ch i t
i s as sumed we must adopt And it ari s es
d i rect ly from the operat i on o f the Kartel l ;
o r rather it is assoc i ated with the name o f its
alleged originator Friedrich L ist We have
n o intent i on o f entering i nto a polem ic a g ai nst
t h e Karte ll It carries wi t h in it in o u r judg
ment the seeds o f i ts o wn defeat The e mi nent
e c onomi st w h o has be come the i dol o f the
German p rotectionist school was ne i ther the
advo ca te o f indis c ri mi nate duties n o r o f
th eir general perm anence Fo r o n e th i ng he
w as an advo cate o f the freedom o f imports
wi th respect to all those commodities whi ch
home industri es c ould n o t o r need n o t pretend
to produce He did not believe in the ex
h au s ti o n o f national economi c energies i n
unsuccessful competitive struggle It was
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7
T HE
COM I N G T RADE
WAR
onl y those commodi ties f o r whi c h the country
was n aturally fitted to produce upon whi ch
he would impose p rote ctive duties Where
those natural cond itions were available and
sufficient c apital was n o t forthcoming then
p r otect ive dut i es might be usefully imposed
until that branch o f industrial oper ation was
suffici ent l y strong t o en able i t to freel y co m
pete with its forei gn riv al s His argument
w as f o r dis c rim inating Development Dut i es
rather than f o r a ny general p rote ctioni st
do ctrine o r policy He re asoned that c ap i ta l
would be attracted to a y oung i ndustry at
home b y a duty o n i ts foreign importa tio ns
Such duty would at first raise the pric e in the
home m arket By th i s ri se in pri ce n ew c apita l
wou l d be tempted to embar k in its pro
duct i on In other words domest i c co m
petition i n th e m a nufacture o f the new
c ommod i t y would i ncre ase Such home co m
petit i on would force o n improvements in
manufacture P ri c es in the home market
would then c ommence to dim inish until the
minimum cost o f production was found Both
the minimum c ost and the power to stand
alone wou l d be ultimate ly determi ned b y its
re l ease into conditions o f free economic
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79
THE COM I N G TRADE WAR
equalisation throughout the world s m arkets
Hercules being tended and fostered in infancy
makes his entry into the world and is vic
to r i o u s against the N emean lion l
Such we gather is the real do ctrine wh i ch
L ist would fa in have propagated And so
far as it may be made a weapo n against hi s
country who h as forsworn hi m in giving
birth to such a monstrosity o f prote ct ion as
the Kartell we o ff er it to our compatriots f o r
use in the coming trade fight P rotect i ve it
i s in i ts immediate application ; but i n its
ultimate upshot it is Free Trade
But there are other weapo n s We have been
at p ains to urge and elaborate our views with
regard to the Russian market because the
change of sympathy there i s but natural after
having suffered the nightmare p resence of
the German menace s o l ong
Let u s
i ndicate a weapon o f another order whi ch
we m ay pat i entl y forge to slay it keeping
o ur eye the while o n the table o f Russian
imports already quoted
We have an unique an undreamt o f o ppo r
tu n i ty o f recapturing Russia s lost cus tom
We have on l y to t u rn to the reports of o u r
Vice C onsu l s to find that Russ ian
o wn
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80
THE COM I N G TRADE WAR
merchants are actua l ly desirous o f buyi ng
the goods they formerly obtained in Austro
Hungary from Britain ( Report from M r
Vice C onsul Bagge o f N i co l ai e ff ) Why then
i t may be asked d o they not follow their
i nclination and give us the benefit o f their
money and purchase n o longer from the
enemy but from the Ally for whose a ims
methods and characteristi cs there is to d ay
such intense enthusiasm t h roughout Russia P
The answer is distressingl y obvious The y
cannot do so because our merchants and
traders have not given them the opportunit y
We may be told that however deplorable we
ought to regard this fact as being in norma l
times of peace while we are at death grips
with Germany i t is really of trivia l i mportance
—
But that is a S hort sighted we had almost
said an unpatriot i c vi ew AS M r Taylor
P edd i e has pointed o u t with re al insight and
most opportune saga city
Experience has taught us that the power
and prestige o f a nation does not lie only upon
its military and nava l forces The ca pacity to
produce effi ciently is at le a st as important as
the other two Industry h as not only to be a r
the cost o f sust a ini ng o u r naval a nd mi l itary
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81
T HE COM I N G T RA D E WAR
for c es o u t of profits but it h as also to de li ver
su ff i cient munitions f o r destru ctive purposes
and the amount requ i red is regulated entirely
by the productive capacity o f other com
e ti t i ve n a tio n s All this do ctrine wi ll survive
p
until all nat i ons agree to live peaceabl y wi th
o n e another and to remove all restrictions t o
the free exchange of goods But this has n o t
h appened yet and we have to take the worl d
”
as we find it
Upon Germany s industrial and co mm ercial
renaissance in fact depends her power to
menace us in the future and o u r victory over
her in the realm o f trade means o f necessity
that her comparative poverty wi l l render it
impossible f o r her t o accumulate again those
vast stores and munitions which all but gave
her the mil i tary suprema cy over the world
In a word it is sound patriotism as well as
good bus ines s that we should as k ourselves
seriously to consider what is being attempted
to recover f o r o u r exporters the position and
authority in the Ru ssian market which they
should never have lost "
uestion and answer
both are ludicrously simple They remind
o n e o f the famous pr on unci omen to of the Abb é
Sieyes in the ea rly days o f the French
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82
THE C O M I N G T RAD E WAR
petent to discuss details such as are requ ir e d
in a ny l angu age but the i r o wn That O bje ction
we answer plump and plain by saying that
the sooner such men as we have in mind make
it their business t o achieve a mastery over
the languages required the better it wil l be
not o n ly f o r them but for the future o f
British trade We are n o t sure indeed that
it is not largely this neglect o f a S imple pre
caution that h as enabled the German to
progress s o vigorously in the industrial race
We all remember that sceptic o f the Scri p
tures w h o was told that he could be cleansed
o f leprosy if he bathed himself i n Jordan
and h o w he disdaining the remed y as to o
supremely simple cont i nued to remain
a fll i ct e d with the disease
Something very
like this has happened as regards the British
manufacturer and exporter The scales o f
that white leprosy which is a death i n life
have des c ended with paralysing effect upon
hi m and h e has a l lowed the German to
achieve a monopoly O f many o f the most
important i ndustries o f the world simp l y and
solely because he h as disdained to learn a
foreign tongue o r to dis c uss matters o f
bus i ness in any language but his o wn Small
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84
THE CO MI N G T RA D E WAR
wonder that the Teuton has forged ahe a d
small
with almost miraculous swiftness
wonder that the Briton has lagged behind
until we have ceased to be the workshop o f
the world and become in many cases the
mere hewers o f wood and drawers o f water
mere helots for the German capitalist
That we are not talking at random in this
matter but with the fullest o ffi cial authority
can be easily proved O ur readers have only
to turn to the Trade C onsular Reports to find
that o u r conclusions are borne out by the
”
testimony o f the men o n the spot by those
lonely sentinels o f British Trade who work
ing with a most inadequate staff and under
innumerable disadvantages yet continue to
report to the heart of the Empire the need
o f the moment and to demand swift action
and e ff ective combinat i on o n the part o f the
commerc i al community here at home Fo r
i nstan c e ac c ording to M r Vice C onsul Bagge
there are
wh o is S ituated at Ni co l a i e ff
innumerable openings for British trade in
Russia and both British manufa cturers and
c apitalists thus have the enormous possi
b i lit i e s o f the Russian market within their
grasp It lies wi th t h em alone to make u s e o f
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85
THE COM I N G TRADE WAR
this un i que
But be i t noted
that he goes o n to s ay that
I t i s however
essential f o r those wishi ng to profit b y the
present favourable c i rcumstances and t o
secure the bus i ness co n ne ction wi th and
maintain a firm hold o n the Russian m arket
t o bear i n mi nd the follo wi ng obse rvat i ons
o n local market customs
The personal factor p l ays a gre at part
Br i tish firms sho uld be lo ca lly represented
either by resident agents o r by travellers
These representatives shou l d be conversant
w i th Russian language they S hould also be
men chosen n o t only f o r their bus i ness talents
but f o r their capacities o f making themse lves
pleasant and o f suit i ng themse lves to the ir
”
clients
Then follows the followi ng momentous
sen ten c e :
The present usual methods o f
attempting to open up a connect ion by corres
and
as
a
o n d e n ce only is o f small avail
p
general rule can be said to be a sheer waste
”
o f time and troub l e
Thi s O pinion o f the Vi ce C onsu l at
N i c o l a i e ff is co nfi rmed by other authorit i es
wh o have examined cond i tions o n the spot
See N 5 544 A nn u al Se r i e D ipl o ma tic an d Co n u l a r
R p ort
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86
s
THE COM I N G TRADE WAR
According to M r Vice C onsul M egalos who
is stationed at Kertch it would appear that
adequate representation of British firms in
Russia is more than half the battle in the
capture of the trade of that continent He
says :
For years past goods of German
manufacture were pushed by means of expert
commercial travellers and the system pre
vailing in the United Kingdom of forwarding
price lists etc in the English language is
utterly useless O ne could wi sh that these
words could be inscribed on the walls of
every commercial house and every offi ce in
the British Isles for although the point they
make is s o O bvious that one is amazed that it
should require amplification yet the fa ct
stands that up to within two years ago
where as the Russian trader was visited almost
monthly by the same expert commercial
travel l er he received from Great Britain
nothing more inspiring than a price list
which was written in a language he could not
”
understand M r M egalos goes on
British
trade would be greatly benefited if manu
f actu r er s o r shipping firms would act on
repeated recommendations either to have
their price lists printed in the language
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87
G
THE COM I N G T RAD E WAR
measures weight and currency o f the c ountr y
—
and this he says is the best
o r to send out
plan
expert travellers w h o should speak
the language and carry suitable patterns o f a
”
good selection of cheap articles
If we turn from these to other i ns tru ctive
comments o f these C onsular Reports we
shall fin d the same point emphasized again
and again M r Vice C onsul Blake y writing
from Kh a r ko ff pleads that it is greatly t o
be desired that the e fforts to acqua i nt Russia
wi th Bri tish goods should be most stren
u o u s l y pushed forward and that a c onsistent
study be made f o r the best mean s to this
”
end
He adds wi th pathetic insistence
that where as a few excellently illustrated
catalogues with good Russ i an text have been
received at the Vice C onsulate from Bri tish
engineeri ng firms this is by n o means the
rule
Ger ma n fir ms h a ve ma d e a speci a li ty
o a dver ti s i ng i n Rus si a a nd as th is h a s ha r d ly
f
been r es or ted to by B r i tis h fir ms the i dea h as
d
e th a t B r i tis h fir ms ha ve b een
o
a
i
ne
r
u
n
d
h
er
g
g
o u ts tr ipp ed i n a l l moder n br a nch es of pr o
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ducti on
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C ould there be a more damning i ndictment
inertia and indi ff erence which
o f the sloth
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88
THE COM I N G TRADE WAR
has caused the trade o f o u r Al lies to pass i nto
German hands P
"e t it is very diffi cult even n o w to rouse the
British manufacturer to a sense of the o ppo r
t u n iti e s that a re o ff ered him in the Lan d of the
Slav although he is told with extraord in ary
emp hasis and by these p erfectly impartial
o ffi cials that there is within his grasp such
an o p portunity as he has never had since the
E ast India C omp any was established in
Bombay o r since the Spinning Jenny o f
Arkwr i ght enabled the C otton Industry first
”
t o a ssume g i gantic proportions
Russia
says the Vice C onsul o f Kherson M r
Ca ru ana Russia is now a very large market
The whole o f the i ndustrial wor l d there
is anx i ous to b oy co tt a l l Ger ma n g oods I f the
British merchants would take energetic steps
a tremendous in c re ase in their trade with
”
Russ i a wil l be the result but he adds
it
i s imperative to work the Russian market
more thoroughly that is to s ay British
merchants must appo i nt reliable agents and
representatives for the sale of their good
If the British firms will appoint only reliable
agents and put business generally o n a
”
sounder basis a l arge tr a de ca n be done
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89
THE COM I N G TRADE WA R
His opinion i s echoed by that o f the Vice
C onsul at Rostov o n Don M r Edwards
wh o dec l ares that after t a k ing the opini on o f
“
the largest bus i ness firms in hi s town
I
c onsider that there is only o n e way to pro c ure
big results i e for Britai n to step entirely
into the shoes o f the German an d Au stro
Hungarian Trader and to continue w orking
”
o n his condi t i ons and terms
So that we have a c loud o f witnesses whos e
authority cannot be ga i nsaid wh o tel l us
th at given adequate representation o n the
spot (now al as almost ent i rely la cking ) we
can achi eve f o r o ur people and produce f o r
ourse lves br i lliant c ommer c i a l results that
we ca n c onquer markets hi therto almost
dominated b y o u r relentless enemy
The first thing then to win b a ck these
markets for Bri tain is to s ee that a study o f
the l angu ages involved is entered o n without
delay by as many competent business men
as can be enth u sed with their possibilities
When thi s is done the y should be despatched
t o the di ff erent distri cts concerned and the y
S hould then supply o u r traders and manu
f a ctu r e rs with those thous an d and o n e deta il s
which hithe rto we have always negle cted
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9
°
THE COM I N G TRADE WAR
a nd su p pos i ng a really capable and ins pi red
man o f business were put at its head and
who is unfami liar
n o t merely a politician
wi th the vulgar details o f the nation s bus i ness
then indeed we can conceive of no better
machinery f o r undertaking the work But at
pres ent n o M inistry o f C ommer c e exists If
if is brought into being it i s more than li kely
to be dominated by a politician whose pre
emi nence o n the platform is in inverse ratio
to his administrative capacity We would urge
therefore that this work should not be left to
politicians but that it should be undertaken
by a committee to be hereafter elected by
the di ff erent C hambers o f C ommerce up and
down the country Those C hambers should
send their ablest men to a joint conference in
London and that conference should ele ct an
Executive C ommittee t o engage and instru ct
these various trade Amb assadors who are
going to peg o u t cla i ms for Br i tain in these
foreign markets If that course is not followed
then we can onl y le ave matters t o the i ndividual
ini tiative and action o f the more alert and
sagacious among our o wn traders I t may be
that in generations to come when a real
M inistry of C ommerce has been found to be
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9
THE COM I N G TRADE WAR
essential in this country and when our Trade
C onsu l ar system has become pract i cal and
effi cient this most necessary work will be
undertaken not by private initiative but
by the Government itself which as we are
the greatest commercial people in the world
might be supposed to have some interest in
these matters At present however that hope
i s a vain o n e and we must rely upon the
prescience imagination and courage of the
pick of o u r merchant classes This only will
we say before we leave this particular point :
for reasons that we have already made clear
there should be no delay in the matter as
Germany is already familiar with the require
ments o f the three markets in question and
unless we take the trouble to make ourselves
at least as we l l informed as s h e is the first six
months after the war will w itness our dis
co mfitu r e and the enemies suc c ess
So much for the first step Important as it
is it has to be succeeded by others I t is not
only his knowledge o f local conditions that
has enabled the German exporter to forge
rapidly ahead the plain fact remains that if
we are to c ompete with him in the future it is
essential that we should adopt and extend
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93
,
THE COM I N G TRAD E WAR
our Banking system until it h as lost many o f
those features of c onservatism that to day
enormously hamper the British trader O ver
and over again the German exporter h as
succeeded in ousting the British competitor
because he is able to give longer credit L et
us take the case of Russia According to the
report from which we have already quoted
from M r Vice C onsul Bagge
The usual
British condition o f cash against documents
is an e ff ective bar to business C redit of from
four to six months must be given and if care
is taken in selecting clients as is done by the
best German firms the risk attached to this
method o f trading is very small I n thi s con
ne cti o n I wou l d s ay th a t B r i tis h fir ms s hou l d
s o muc h a tten ti o n to th e fin a nci a l
n o t pay
r esou r ces of th e i ndi vidua l or fir m i n ques ti on
to his or i ts r ep u ta ti o n f or commer ci a l
as
mor a li ty a nd s tr a ig h t dea li ng This remark
applies with equal if not more force t o the
selection of agents These could be found
amongst men with small if any financia l
resources who o n account of their honest y
and business activity would be far preferable
”
to many of the apparently richer agents
And he goes on to add this most significant
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94
C H AP TER IV
SO ME
ESSEN TI AL REFORMS
VE R"race ,
.
l ess than every man
has the defects of its qualities and we
in these favoured islands are no
exception to the immutable law which applies
o f necessity to all the sons o f Adam
O f o u r qualities we need not speak : al l
the world has paid them tribute O ur stead
fastness our dogged resolution our c heer
fu l ness under misfortune o u r dauntless
persistence under defeat and our patience
under delay the s e have extorted the wonder
ment even o f our enemies and have insp ired
the sceptics among our friends to an e n th u s
l asm which has c onsumed their doubt in
generous admiration Brita i n in this war
has discovered herself and has won the
approbat i on of Europe And yet we are not
sure whether the discovery h as been c omplete
f o r it h as t o be candid done mu c h to O bscure
those faults which are a l most inseparable
from the qualities we have named I n these
times o f stress and trial it i s o f paramount
importance t hat we should learn to adapt
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9
THE COM I N G TRADE WA R
ideas swiftly and su r e ly to the shift ing
exigencies of the moment and that we should
l earn above all else to be o n o u r guard again st
that most depressing o f all tyrannies the
”
tyrann y of the shibboleth o r the insanity
”
as the French have it
o f the fixed idea
M atthew Arnold that sagacious apostle o f
”
sweetness and light
warned us ha l f a
—
century ago against this besetting S in a s i n
—
natural to a staid and immobile race i n
words pregnant with w i s d o n He abjured us
t o accustom ourselves to let o u r intelligences
play perpetually upon o u r ideas O nly thus
he pointed o u t could we protect ourselves
from the mental stagnation which seeking
its s olace in the unintelligent repetition o f
p hrases is blind to their true application to
the world in which we live
We may be pardoned perhaps f o r feel i ng
at the moment more than a little depressed
by the contemplation o f this chilling form o f
mental conservatism We have to S how o u r
rea d ers h o w we m ay ( 1 ) complete the local
representation in Russia upon which we
touched in the last chapter and (2 ) provide
for that increased period of credit which i s
the great secret of the German suc c ess i n
our
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97
THE COM I N G TRADE WAR
the other markets To accomplish these twin
t a sks we shall be compelled of necessity to
challenge at least tw o o f the pre conceived
ideas of the average business man that is to
s ay the average Brit i sher and we shall have
t o invite him his conservatism n o twi th s t an d
ing to place in that mental crucible he h as
f o r so long neglected at least tw o o f his most
cherished predilectio n s
those are (a ) his
v i ews as to the part which banks and b anking
ought properly to play as regards industry
and commerce and (b ) his concept i on o f the
functions o f the State in regard to th at trade
by which we live
N o w as regards the first i t is more th an
possible that the man in the street h as
scarcely troubled t o think at al l about it If
challenged o n the point h e would reply to
the eff ect that a bank w as primarily a place
wh er e yo u could leave money with the utmost
se curi ty and an organ i sat i on whi ch lent o u t
i ts funds only o n terms and in i nvestments
that precluded any possibility o f l oss The
business o f bank ing he would s ay was to
invest in gilt edged se curi ties only and to
o ff er the equiva l ent assurance to its customers
N o w wit hout troubling to as k ou r se lves h o w
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9
C O M I N G TRADE WAR
T HE
of
the Prussian arm y Frederick the Gre at
was it is perhaps worth while recalling a
convinced opponent of c ompulsory service ;
so much so that he uttered the famous paradox
that in a perfectly organised State the n o n
combatant c itizen ought n o t t o be troubled
b y the knowledge that the country w as at
war As a matter o f actual fact the i deal o f
conscription was introduced into mode rn
Europe by the French and was copied from
them b y the Prussians after the N apo l eonic
Wa rs
Similarl y we are accustomed to think o f
the Germans as the great pioneers i n Housing
and Sanitary Reform although as a m atter
of
fa ct both these important movements
had their rise in England in the days o f our
grandfathers long before Germany had begun
t o realise even the necessity o f washhouses
and while L ord Be aco n s fie l d was proclaiming
aloud the Gospel o f Sa ni tas Sa ni tas Omni a
”
Sa ni ta s
And as with C ons c ription and
Housing Reform s o with Bank ing The
Pru s sian w h o borrowed his literature from
Fran c e borrowed hi s banking system from
the same sour c e the only di ff erence being
that whereas in the o n e case the wit and
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100
THE COM I N G TRADE WA R
humanism o f Vo lta i re and M oliere was
perverted into the insanities of N i e tzch e o r
depres s ed into the banal ities o f Treitschk e
s o far as the more pract i cal sc i ence w a s c on
c erned the descendants o f Frederick the
Great may fairl y cla1m to have s o elevated
its practi c e as t o obtain the utmost possible
advantages f o r their tra ders with a minimum
o f risk
What is the German banking system "It
may be described as o n e that recognises as
the true function o f a bank the feeding
stimu l ation and encourage m ent o f industry
We need hardly point o u t t o those o f o u r
readers w h o are familiar with the daily co n
duct o f business that banking as it is at present
conducted in these Is l ands h as objects t o
which the aforenamed are but se c ondary In
Germany the business man the merchant o r
the t r a d e r wh o desires to in c rease his a ctivities
t o extend a p articular line o f his wares or to
laun c h o u t into new markets h as o nl y t o
apply t o the bank t o be provided with the
requisite ca pital The bank o f course requires
t o be satisfied as to the soundness o f the
p ropos ition whi c h he is introducing but if
the y are c onvi nced first as to his capacity
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10 1
THE COM I N G T RA D E WAR
and integrity and secondly as to the possi
b i l i ti e s o f the venture he is interested in
then no d i fli cu lty whatever is made in the
matter of accommodating him with those
S inews o f war wi thout which he could not
pro c eed In Germany it is n o uncommon
circumstance to find businesses prosperous
and successful finan ced by the b anks wh o
are content to place almost unlimited funds at
the d i sposal o f the dire ctors In England that
i s the exception n o t the rule The individual
trader shopkeeper merchant o r manufacturer
who goes to the bank for an overdraft must
have collatera l security and his business must
be o n e th a t has been firml y and for long
establ i shed ; and even then the required
assistance may not be forthco mi ng
In
Germany the banker is famil iar with the
deta i ls o f produ ction the methods o f market
ing the modes o f execut i ng orders the risks
to be run the profits to be earned in fact
with a l l the minut i ae not o f o n e o r two
favoured houses alone but o f a large variety
and d iversity o f trading concerns The com
mer ci al libraries in the German banks those
monuments of painst aki ng care the most
br il l ia nt exemp l ars w e h ave o f German
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102
THE COM I N G TRADE WA R
Ge rman B anker now offers as a matter o f
course Let us recall the observations made
o n this point :
Scotland o ff ers the finest
example in the world s history of how a
people may pass as if by magic from a state
o f poverty misery and all forms of industrial
commercial and financial struggle (in some
remoter parts amounting almost to a depth
o f barbarism ) to one o f the most flourishi ng
and prosperous nations i n Europe And to
this rapid and wondrous transformation w as
d ue a significant ch ange in o n e department
al one o f its economic system The Bank
C harter lapsed in the early years o f the
eighteenth century namely i n 1 7 1 6 and the
supply o f capital and credit became free
Ho w the bankers took advantage o f their new
pos ition is well attested by historians and
e c onomists and b y few more clearly t han
Dunning M acleod Al l such authorities and
e y e witnesses o f the worki ng of these un
hampered banks vie with each other in the
recognition o f their great utili ty their ex
ce pt i o n a l immunity from panics ruin or l oss
and their unequalled prosperity produ ci ng
”
power
But although Scotch bankers i n
those days were practi cally in the same
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THE COM I N G TRADE WAR
pos ition as are the German bankers to day
they were able to freely grant cash credits t o
producers to aid their productions in the form
and the results
o f their own notes and gold
that followed this system were acknowledged
in a remarkable Report of the Lords and
C ommons C ommittee in 1 8 2 6 on the state o f
Ci r c ulation of Scotch and Irish N otes
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”
There is one part of this system says
this Report
which is stated by all the
wi tnesses (and in the opinion of the C om
mitte e very justly stated ) to have had the
best e ff ects on the people of Scotland and
particularly upon the middle and the
poorer classes of society in producing and
encouraging habits of frugality and i n
,
,
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,
d u s tr y
.
The witnesses whose evidence we have
quoted stated that it was calculated that
the number o f persons who had C ash
C redits granted to them amounted to
about
or
and as the average
number o f securities to each bond might
be taken at three there were about
persons interested as securities ; s o that
the total number of persons at that period
,
,
10
5
THE COM I N G TRADE WAR
—1 8 25—who were interested in the s ystem
was at least
The Bank s were then
supposed to be under enga gement o f that
sort to the amount of
of which
about two thirds were drawn out This
system has a great e ff ect upon the moral
habits of the people because those who
have securities feel an interest in watching
over their conduct and if they find that
they are misconducting themselves they
become apprehensive of being brought
into risk and loss from having become
their sureties and if they find that they
are s o misconducting themselves they
withdraw the security the practical effect
o f which is that the sureties do in a greater
o r less degree keep an attentive eye upon
the future t r ans actions and character of
the person for whom they have thus pledged
themselves and it is perhaps di ff icult for
those not intimately connected with it to
conceive the moral check which is aff orded
upon the members of a great trading com
munity who are thus directly interested
in the integrity prudence and success o f
each other I t r a r ely
e ver
h app ens th a t
”
B a nks s ufier l oss by s ma l l Cas h a cco un ts
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10
6
THE COM I N G T RADE WA R
N ow
the draft is the chief medium o f ex
change in the French b a nquier system The
method is simple in the extreme When a
French producer or merchant has sold a
parcel o f goods and made o u t his invoice h i s
first step i s to draw a dr aft o n the bu yer This
draft he takes to his banker who makes o u t
a b or der ea u The bordereau is a statement i n
wh i ch the net value o f the drafts paid in that
day is arrived at by the deduction o f interest
d i ff erences o f rates o f exchange and bankers
c ommission The drawer is then credited by
the banker f o r the net amount o f each b or der ea u
i n account current and is allowed to draw
e ither the full amount o r part of it at once
As a keen competition exists between the
bankers such producers o r merchants whose
drafts as a rule in due time meet wit h a pr o mpt
acceptance and payment c an generally draw
the full amount and are often granted an
overdraft
The powerful influence by which thi s
b a nqu i er system acts upon t h e rapidity and
fru itfulness o f production may be well i m
a i n e d when it is seen that it specia l ly adapts
g
itself to the small as well as the larger class o f
trades or i ndustr i es It is in f a ct e s s e n ti al l y
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8
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THE COM I N G TRADE WAR
’
a people s system The b a nqui er may be
located in the most modest o r remote centre
o f in d ustry as for instance the agricultural
ho rt i cultural o r fishing industries for wh i ch
France i s noted The b a nqui er system has in
fact expanded like a net over the face o f
France And its extension t o other countries
even facilitates the smallest and most modest
extension o f international tr ad e Th e i r business
for the most part is to discount the b or der ea u
draft The method is more profitable than
money lending
and requir ing but co m
at ive l
ar
small
capita
l
s
a
large
turnover
is
p
y
made at considerable advantage
The drafts thus discounted for customers
are generally drawn on localities distant from
the local market As a rule preceden c e is
given to this business As soon as a banker
for instance in Valence re c eives drafts o n
other places he sends them each to a banker
in the place on which they are drawn o r
if the place is too small t o a b a nqui er nearest
in that district Drafts o n foreign places may
Such
o thr ough Paris or a foreign banker
g
corresponding bankers credit the Valence
banker o n receipt sending him in return
drafts dr awn on Valence and its neighbour
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9
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THE COM I N G T RA DE WAR
hood which have accumulated in their hands
These the Valence banker presents for pay
ment and by t hi s supplies himself with c ash
which he holds f o r the disposal of his cus
t o me r s And s o forth throughout the net work
o f the system Long drafts are disposed o f t o
the larger and wealthier bank s in the leading
centres These can be drawn on at sight by
the smaller b a nqu i er s Thus o u r Valen c e
banker can always replenish his cas h supply
The point is that the b a nqu i er system facili
tates the local production and sale of goods
f o r delivery outside his district That is to
s ay it is the producer himself wh o can best
employ labour or w h o h as the greatest
business ability rather than the wealthy co n
sumer whose business is sought and whose
thrifty operations o f trade are brought o u t
The rich who require cash for consumption
purposes are not suitable customers for the
local b a nquier
for any c apital advanced to
them is not replaced by the exchange of the
b or der ea u drafts Thi s is the case in a nutshell
for the P eople s Banks idea whi ch M r
Farrow advocated This is the vital factor
in hi s ;
plea for an amplified system o f
Banking and C redit for the smaller business
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1 10
THE C O M I N G TRADE WAR
the peop l e are the basis o f all credit Any
prosperous community may in fact secrete
enough credit for its o w n use by its own
labour exertion Such credit passing into the
main circulating stream i ncreases the amount
and the availability and makes the humblest
labourer the medium o f maximum product i on
and pros peri ty
N o w i t wa s this system which enteri ng
Germany from Fran c e by the eastern border
as well as from Belgium and Switzerland
h as now spread all over the country and has
enabled the German capitalist and producer
to forge ahead wi th such astounding rapidit y
t o increase h i s output and to c apture cus
to me r s beyond the reach o f the British
producer Let us contrast f o r a moment the
position o f the Germ an trader under the o l d
regime and that which he occupies to day
Thirt y o r forty years ago he had to l imit hi s
business to the small amount o f capital he
possessed o r to borrow o n mortgage o r
collateral security O bviously therefore his
purch ases o f raw material were comparatively
tr i fli ng Frequently they had to be made at
an artificially high price When he had reached
almost the limit o f his capital in manufacturi n g
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1 12
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THE COM I N G TRADE WAR
goods he had to S lacken production until
those goods were first sold then paid f o r
Fr e q u e n tl y t o tide him over th i s trying per i od
he had to sell to a middleman and at a l o w
price Thus he was hampered by trade raw
material price o f sale a limited produ ction
and those economic incidentals which always
fasten o n a business short o f cash
T o day all that is changed The system of
banking in vogue in Germany has created an
entirely new condition of aff airs The manu
facturer can buy largely and in the best
markets direct and without the aid o f the
middleman He can manufacture o n a larger
scale simply because so soon as his goods are
o u t of the factory he can draw drafts o n his
customers and through the bankers renew
his capital O bviously this fact puts him in a
position of marked advantage as regards the
invasion o f foreign markets and the dumping
down of cheap goods wherewith to capture
the enemy s trade But that is n o t all M uch
might be said about the benefits ac cruing to
him from buying wholesale in the best
markets on terms which for the seller are
nearly as good as cas h terms as well as the
advantages ga ined from a large turnover I n
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1 1
3
THE COM I N G TRADE WAR
all business and especially in a manufacturing
business there are big expenses which remain
the same whether the turnover be large or
small such as rent interest on machinery
living expenses clerks foremen m odels
patterns moulds travellers advertising
experiments samples artistic assistance dyes
stamps etc In many small factories where
these small expenses amount to as much as
and in many crafts
r aw material and wages
carried o n on a small scale these are the chief
expenses while raw material and wages are
insignificant If a man h as 7 0 per cent of
such expenses and a small turnover and can
by better financing produce ten times more
his goods cost him 6 3 per cent less and he
will easily beat those who work in a small
way M oreover it is manifest that all such
benefits conferred by improved financing
a ff ect others in the community besides the
manufacturer ; they mean a general amal
a mat i o n o f the welfare o f the working people
g
A larger production means a greater demand
for hands a higher wage ; and cheaper
produ ction means lower cost of living and
extended enjo yment f o r the workers It is
clear then that the b a nquier system brings
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1 1
4
THE COM I N G T RADE WAR
che rish o u r o wn antiquated methods as
And the sad
t hough they were i n fallible
spe ct a cle o f British manufacturers handi
capped at every turn and striving to keep
pace wi th their more fortunate in this regard
more enlightened foreign competitors and
being forced often against their will to sweat
their o wn workmen o ff ers a saddening
comment upon o u r dogged adheren c e t o o u r
antiquated an d irrationa l system
We have been at pai n s to treat this question
and at
o f German B a nk ing thus in detail
some l ength because quite apart from the
—
fas c ination o f the subject a subject far to o
li ttle known to the people of these islands
i ts vi tal importance is obvious It is tr a ns
r e n tl
clear
that
the
increased
credit
fa
c
ili
a
p
y
ties which the German banks place at the
d i sposal o f the German exporters enable
those same exporters to give in turn longer
credit to the i r customers and thus to capture
their custom as against the British c o m
peti tor and to close i ts doors against him
Incre ased credit means not merely in crease d
production but that the markets f o r the
products ca n be quickl y easily and firml y
se c ured "
uite obviously then if Briti sh
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1 1
6
T HE
COM I N G TRADE WAR
c ommer c e is to regai n its lost ground we must
s e e t o it that British banking methods are
subject to reforms which however drastic
—
are absolutely necessary reforms that we
discuss in th e next chapter
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1 17
,
C HAP TER
V
.
THE N EW BAN KI N G.
GREAT thinker once happily r e
marked that i t was only infir mit y
”
that clung to a label
We have
alwa ys deemed the saying a shrewd one and
at this crisis in our history it seems peculiarly
apposite N ow if ever it is necessary
supremely necessary for us to pass in r e vi e w all
to challenge
o u r o l d conceptions and ideas
o u r cherished prejudices and to bring even o u r
sympathies to the bar of intellect The beliefs
and inspirations that have guided us hereto
—
—
fore the very phrases that we use l et us s e e
that they have a r ea l signifi cance to day and
that we are n o t merely using them as a
substitute for thought We s ay this with the
more insistence because the trade war wi th
Germany is an event that demands not merely
earnestness vigour and determination but
that grip o f realities without which these avai l
nothing
We must take a clear view o f the situation
We must r i d our minds o f the tyranny o f
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1 18
THE COM I N G
T RADE
WAR
At present the part that the State or the
Government ought to take in the industrial
conflict falls under one or other of two dia
metrically opposite schools of thought neither
of which we opine have found wisdom in this
matter The first of these preceding logica l ly
from the mid Victorian individualism o f
C obdenite economics asserts that the less
the State h as to do with business the better
Its advocates i nsist on the importance o f the
free initiative o f the individual trader whom
they urge should be as unfettered as possible
and they argue that while the State ham
pered by bureaucracy red tape and o fli ci al
d o m can never bring t o bear on th e cognate
but shifting problems of the Kaleidoscope
o f the world s industry
that swift decision
and ready acumen which characterises the
business man it may on the other hand do
infinite misc hi ef by imposing restraints
especially by way of tariffs on those whom
it is quite incapable of superseding Hence it
demands that trade shall above all other
considerations be free and that restraints o n
its operation shall be abolished
The other school insists that the true free
dom o f trade lies in its Protection against the
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1 20
THE C O M I N G TRADE WA R
cut throat and unfair competition of other
peoples and asserts that only by a system of
scientific tari ff s can our traders and our pro
d u cer s have a chance to develop O n the one
hand therefore we are faced with the pro
positions that if Free Trade is to be exultant
and secure then the State can and must do
—
nothing except of course police our streets
check the most obvious forms of counterfeit
and enforce the Factory Acts and that once
Protection is established throughout the
British Empire private enterprise the
initiative of individual firms the ubiquity
of the retailer the persistence of the small
—
man in industry all these and much else
must pass into the Ewig kei t O n the other
hand we are told t h at without the solvent of
a Tari ff we are lost and all e ff ort is vain
For ourselves we are unable to adopt either
view The situation as it seems to us resolves
itself into this that whereas there is much
that the private trader can accomplish which
the State cannot do while he can launch n e w
ventures conduct fresh enterprises open up
undiscovered markets It I S also certain "that
there is very much that the private trader
cannot attempt without the aid of the State
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1 21
THE COM I N G T RADE WA R
and that the S tate in its turn cannot ach i eve
wi thout the aid o f the private trader I t would
be folly for instance to leave the reconquest
o f o u r trade from Germany to the State o r
to put i t more plainly to State Ofli ci als These
lack the insight the ubiquity the business
instincts o f private commercial men O n the
other hand it would be equally childish to
pretend that the private business man can
wi thout Government assist a nce achieve the
results we all have at heart ; he l acks the
O pportunities the methods the resourceful
n e s s t h e command of information the gener al
sense o f power and responsibility that must
follow the State Hence it is that we postulate
the necessity o f the State not arbitraril y
interfering checking o r restrict i ng the private
firm o r man of business but rather i ts aiding
stimulating and supporting him In a word
if we are to recover the trade that we have lost
t o Germany it i s very necessary that we shoul d
adopt a new vi ew alike o f the functions o f the
Sta te and o f its industrial and commer ci al
possibilitie s Whi le we should dismiss the
idea that industrial victory is to be achieved
only b y State reorganisation we shou l d
nevertheless carefully consider the suggestion
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1 22
,
THE COM I N G TRADE WAR
them to adopt n e w methods until much
valuable time had been lost time which our
German rivals would use to recover their
lost hold on their old customers For that
very reason therefore it seems inevitable
that the Government must play a leading
and a vital part in the great transformation
scene that we hope will follow the war That
part h as been admirably indicated by no less
3 Banking authority than Sir Edward Holden
the distinguished C hairman of the London
C ity and M idland Ba n k Sir Edward s u gge s
ted some little time since that we should
lose no time in forming a new banking com
—
bination i n e ff ect a Trading Bank to be
capitalised from the resources both of existing
banks and those of their customers who were
engaged in the export business
a bank
whose function it should be s o to finance our
home firms as would enable them to hold
their o wn against the Hun in this vital matter
o f extended cred i t The part to be played by
the G overnment was a striki ng one They
were to guarantee a fair return on the capital
i nvested duri ng the i nitial period and under
the protection of that guarantee one has no
d oubt th at the milli ons necessary fo r the
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1 24
THE C O M I N G TRADE WAR
gigantic t ask I have outlined would be readily
forthcoming
We recall a speech o f Sir Edward Holden
as far back a s January 1 9 1 4 when he t e
viewed the financial situation principally in
relation to our gold reserves in comparison
with Germany and especially also our financial
embarrassments through the protective char
acter of the banking institutions of Russia
and France The meeting was that of the
London C ity and M idland Bank and the idea
then was to appeal to the Government for
such a ssistance as they onl y could render in
the situation as it was rapidly developing
Incidentally it may be noticed that he then
pointed o u t that Germany had already been
enabled by her highly organised banking
system to increase her gold reserve by fabulous
a mounts She had announced her intention
previously of doing so And British experts
had declared that s h e must fail in these de
signs But at any rate Germany accomplished
Since then however the enormous strain
and i ts unforeseen prolongation is already
putting her at her wits end to keep her hold
o n h er gold reserves in su ff icient quantities
to fin a n ce the revi val of her after the war
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5
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THE C O M I N G TRADE WAR
industry and especially her d umping pr o
e ns i t
Howbeit
the
point
we
would
here
p
y
emphasise is that Sir Ed wa rd at that t i me
mooted a question which will have a most
important be aring upon the concerted action
o f the Al l ies in the future trade war
We have already been compelled to tou c h
upon the anomalous e l ements o f prote ction
which o u r Allies must purge themselves o f
t o some extent i f mutua l work and mutual
service is to be perfectly a c complished We
have handled the protective character o f Italy
as gently and suggestively as might be We
could have passed o n to a simil a r c ritica l
review o f that thoroughly p rote cted country
France And SO in the case o f Russ i a
M any phases o f international e c onomic l i fe
amongst the Al l i es will have to be subjected
t o rectification and renewal before the new
footing o f commerce shall have completely
emerged and have become reorganised S i r
Edward then in 1 9 1 4 brought forward a
question f o r the seri ous consideration of the
Government o f the day concerning the
branches o f foreign banks doing business in
this country Included in h i s survey was the
s t atement that a bran ch o f an Englis h joint
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1 26
THE COM I N G TRADE WA R
have all along been fostered by the German
Government and the German banks and
that on the other hand neither our Govern
ment nor our banks have rendered Britis h
trade equivalent assistance We can claim
with certitude that Sir Edward Holden s
recent scheme is the first practical effort to
adjust that inequality
to give producers
here at home a chance of meeting their co m
i
r s on level terms
e
t
o
That
is
not
its
only
t
p
advantage While it brings to the private
trader the resources and p r es tig e of the State
it still leaves him free to conduct his business
untramm elled by artificial restraints or bureau
cratic regulations We thus have the solidit y
and strength of the Protective system and the
ubiquity and resi l ience o f individual effort
Again let the experiment succeed and it is
—
more than probable that other banks o n c e
the advantages of the n e w method has been
—
demonstrated to them will be qui ck to
adopt proposals of which they have hitherto
fought s h y and we may s e e as a result o f thi s
particular project the gradual but general i n iti
ation of the b a nquier system vivifying s t i mu l at
ing an d quickening the still waters of British
bank ing I t is quite certain that Without
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1 28
THE COM I N G TRADE WAR
some such State guarantee as Sir Edward
Holden has foreshadowed our bankers will
not of themselves initiate a reform so alien to
their present methods There is abundant
evidence of this to hand in their reluct
ance even to consider the feasibility of the
idea
Let us hear M r Barrett on the point
“
”
About eighteen months ago writes that
distinguished journalist
when the i n s titu
tion of a bank to finance British industry on
lines approximating to those of the great
German banks was being urged I ventured
to suggest that our joint stock banks S hould
themselves provide capital for such a bank
which would be a distinct entity and meet the
requirements of the industrial community
without imperilling the confidence of deposi
tors in the parent institutions At the same
time such a bank would have the enormous
advantage of the intelligence organisations
possessed by those institutions I submitted
the scheme to directors and managers of
lea ding joint stock banks but the replies were
none too encouraging Several approved but
others only saw di ffi culties and it seemed
fairly evident that whether good o r b a d
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1 29
THE COM I N G TRADE WAR
there were mutual j ealousies that made the
”
needfu l c o O peration improbable
This testimony is conclusive We may rest
assured that without such support from the
State as would free them in the initial stages
from all r i sks o u r great banking ho u ses wou l d
n o t enter o n s o complete a reversal of the i r
normal policy
It i s clear then that the suggestion whi ch
S i r Edward Holden h as advanced ought to
be p ressed o n the Government with increasing
vigour by the commercial classes and espec
i al ly by the export traders o f the country
We d o n o t say f o r a moment that it is the first
step t o be taken in the campaign of which
we are writing That we described in o u r last
chapter O ur traders have at the outset to
secure local repre sentation in the markets we
have ind i cated and in other markets that wi ll
occur t o them O nce that is secured and they
have thoroughly mastered the local require
ments o f the various districts with which
they are c oncerned once they h ave satisfied
themselves alike as t o the n e w openings for
British industry and their o wn ability t o
supply o n a large scale when industry again
be co mes normal then the demand fo r a Stat e
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0
3
T HE
COM I NG
T RA D E
WAR
considering within two months of the com
men ce me n t o f hostilities
So long ago as
N ovember 1 9 1 4 there passed into law an
Act known as the Federal Reserve Act de
signed expressly for the purpose we are
advocating and hailed by Dr Ewing Pratt
C hief o f the Bureau o f Forei gn and Domestic
C ommerce as opening a new chapter in the
triumphant progress of that Leviathan state
What has been the result PThat o n N ovember
ork
a 4 t h last the N ational C ity Bank of N ew "
organised a great financial corporation of n o
less than £I o o o o o o o for the express purpose
o f the development o f that foreign trade
upon the capture o f which depends in a large
part the destiny o f the people during the next
half ce ntury
C learly if the shrewd financiers and most
capable C aptains o f Industry who have raised
the U S A to such a pinnacle of commercial
and i ndustrial eminence find this step
necessary much more must we w h o will
presently discover that much of our strength
h as been wasted by wars and expended in
avenues that are unlikely to bring us any
i mmediate return We cannot aff ord to allow
the Holden plan to be j ettisoned or p ermit
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1
2
3
THE COM I N G TRAD E WA R
this vital matter to be side tracked It is
essential that all men o f business training all
patriots all those who realise the immanence
o f the situation that is likely to follow on the
c essation of the war should unite in pressing
a demand upon the Government for effective
a ction along the lines o f State provided
facilities f o r credit
But be it noted when that point has been
w o n we are still only at the beginning of the
great movement for the utilisation in the
service o f commerce o f the resources of the
State There will still be much that the
Government should undertake without any
delay It must organise and at once an
Intelligence Department that shall be worthy
alike o f the colossal advantages to be won and
o f the resources that we can if we but will it
bring to bear upon the task of their capture
At the present moment British traders are
dependent for information as to foreign
markets upon o u r Trade C onsuls some of
whom are men of S ingular devotion to duty
a nd great ability but who are all hopelessly
understaff ed and in some cases not even
men whose racial sympathies are with Britain
A cc ord i ng to C olonel "ates M P
O ut of
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33
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THE COM I N G TRADE WA R
C onsuls and Vice C onsuls in Scandinavia
and Holland only 1 1 salaried and 1 7 u n
salari ed were of British descent while 8 3
were unsalaried aliens In Denmark outside
”
C openhagen we have said the honorary
member o nl y one C onsul wh o is o f British
”
nationalit y In our Spanish service he added
”
there are 20 unsalaried aliens
M r P e n n e f ath e r M P states that before
the wa r o u t o f 6 5 3 o f o u r unsalaried C onsular
representat ives abroad n o fewer than 2 6 8
were o f fore i gn nationality
o r 4 5 per c ent
and o f these 44 were Germans o r Austrians
In 1 9 1 3 only eight o f o u r 37 unsalaried
C onsular o ffi cers in Germany were British
and 2 9 were o f German nationa l it y Well
Ho w can we expect that
may he as k
these men were going to push British
interests as against German interests P It is
incredible
Even where the C onsul i s as frequentl y
happens an astute and energetic man o f
a ff airs keen o n push i ng Bri tish trade he is
left w ith utterly i nadequate support and has
hi mself frequently t o act as his o w n clerk and
messenger According to a recent number
of The Fi na nci er a British merchant at
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34
C H AP TER
VI
WAN TED N ATI ONAL E CON OMI CS
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far alike in our analysis of the reasons
o f Germany s signal success in extend
ing her foreign trade as in our survey
o f the ground we must take up to defeat her
we have been concerned largely with questions
o f grave but still o f secondary importance
The facilities for credit that our exporters
S hould be enabled to extend to their cus
to m e r s the campaign that we S hould enter
o n to push the value o f o u r wares abroad ;
the steps that we should take to equip o u r
selves with the requisite and intimate know
l edge o f the particular requirements involved
these considerations momentous though they
be fade into i n s i gn ific an ce when we come
seriously to consider the question that at once
underlies and overshadows them all That
question may be simply stated
Let it be clearly understood that it does
n o t matter to what extent the British e xporter
is able to give credit it does not matter h o w
well he is represented l ocally in the variou s
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3
THE COM I N G TRADE WAR
markets to which we have directed attention
important as these things are there is one
great paramount determining consideration
It is this
C an he produce cheaper than his
competitor from Germany or Austria Hun
gary P If yes then it is quite certain that
the conquest of Germany from a trade point
If no then no matter
o f view is achieved
what arrangements he may e ff ect as to credit
no matter what results his organisation can
achieve as to local representation no matter
in effect what else he can do whether he can
grant long credit or short credit the decisive
advantage in the industrial struggle between
Germany and ourselves still remains with the
enemy That factor cannot be too strongly
insisted upon If Germany can produce goods
more cheaply to these foreign markets than
we can then her victory is assured If on the
other hand we can produce them not only
more effi ciently more substantially and in
better condition than can our opponents b u t
ess p r i ce in that case the victory in the
or
a
l
f
great industrial struggle will pass to the
people of these Islands and not to their life
long and ubiquitous en e mies Hence it is that
we are d e s I r o u s of pointing out to our fellow
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37
THE COM I N G TRADE WAR
countrymen the necessary conditions of
v i ctory which must be obse rved i f we are to
achi eve success
As it seems to us the State can well prove
i tse l f to be the determining factor in this
matter As we have sa i d the conquest o f
trade from Germany is ul timately a
our
matter o f cheap production Now what h as
enabled t h e German to produce cheaply "
There can be n o question whatever about it
that it is largely because he h as recognised
the enormous the supreme importance o f
the part which the chemist has played in
modern manufactural production There is
n o t o n e single firm in Germany t o day there
is hardly o n e pri vate trader c ertainl y there is
n o t one capita list worthy the name who has
n o t realised the pre eminence o f the chemist
in modern business life Every body who has
studied modern industrial conditions knows
that there are thrown away day by day bye
—
products fats secretions and accessories
that while they may be o f trifling value to
the business out of which they are originally
r o d u c e d m ay yet prove to be o f extraordinary
p
value to industry generally To determine
th i s fa ct the analyti c al chemist i s necess a ry
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THE C O M I N G TRADE WAR
mass of our people utterly uninstru cted as to
their proper utilization It is quite true that
this fatal indi ff erence to chemical research
and its importance is not shared throughout
the British Empire "
uite recently the Govern
ment established under insistent pressure an
Industrial Research C ommittee to whom it
granted the magnificent s u m of
O n the other hand the legislative assembly
of the Parliament of N ew South Wales
granted M r Hughes the Premier the s u m
of
for the purpose o f establishing
and administering an Institution of the C on
duct of Scientific Research in its relation to
industry
This S hows a lamentable condition o f
a ff airs Great Britain the richest country in
the world can only devote a f e w paltry
thousands to recovering from the lost products
of its industry some of the wealth o f the
future Australia a continent comparatively
poverty stricken can cheerfully give more than
ten times the sum to achieve this golden object
What is the reason of this discrepancy "
Frankly we thi n k it is that Australia has
grasped almost intuitively the new view of
Economics that we have adumbrated in these
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THE COM I N G TRADE WAR
pages the view that the science of wealth
should be fre ed from mere academic labels
and unreal distinctions and approached on
broad progressive and national lines from a
business standpoint At present little has been
heard of this n e w thought form As M r
Taylor Peddie its most distinguished a d vo
cat e has remarked
This new Economic Science has grown
upon the world unconsciously and no one
seems to have defined it At any rate I have
not been able to find any works dealing with
the question and I think we may safely
claim to be the first to make the attempt I
can only touch upon it very briefly to day but
I will be able to give you su ffi cient data to act
upon to s e t this discussion in motion and
to justify you I hope in extending to us your
whole hearted support
I think we are all agreed that the S c ience
of Political Economy (if we can call it a
science ) as we know it in this country to day
is a dead science and it has been emphasised
m ore in recent years by reason of the great
advance that has been made In the Sciences
P roduction (in which is i n
o f Education
cluded Industry and Agriculture ) C hemistry
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,
THE COM I N G TRADE WAR
Tra nsportation and Bank ing not onl y i n this
country but in Am eri ca and Germany I have
placed the scienc e s i n what I think i s the
order of importance
Every article o f utility that is produ c ed is
influenced by these five sciences For instan c e
to produce successfully yo u must first o f al l
have Education ; secondly you must have
the latest experience and knowl edge i n method
o f P roduction
and also the latest and most
modern machinery to assist you thirdly
o u must have the Technologist or Analyti ca l
y
C hemist to assist yo u in obtaining the best
possible materials fourthl y yo u require the
services o f the Tran sportation C ompani es i n
ca rry ing o r shipping your goods to those wh o
desire them and fif thl y you need the Banker
o r C apitalist to fin ance your total oper at i o n s
with the greatest possible faci lity
"o u will therefore I hope O bserve that
if the nation is t o advance o n an ything like
progressive lines the ph ases o f a ctivity I
mention should be made as e fli ci e n t as it i s
possible to make them If yo u ado p t and
support that policy as the basis o f your nationa l
business system you must necessaril y b e
come a N ational Economist
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T HE
COM I N G T RADE WA R
the people live while it is little S hort o f
madness to suppose that State offi cials can
supersede private merchants and traders or
can partake o f their keen competitive busi
ness sense
while in short the State
should leave intact the main activities energies
and inspirations of private businesses large
and small yet it can perform a most valuable
function in bri ngi ng to their service resources
and reserves of energy that they cannot of
themselves possibly command We have seen
h o w this can be done in regard to the marketing
o f goods for abroad We have seen how essen
tial it is that the State should help the British
exporter to increased facilities o f credit
how overwhelming is the c a se for its creat i ng
without delay an organisation that shall cover
the whole earth and convey to our producers
here the requisite i nformation as to local and
particular requirements We have seen also
how necessary it is for the State to endow and
organise a really live and well equipped
department o f physical research and chemistry
so that the British trader is no longer at the
grave and cardinal disadvantage that we have
described But that is not all There is much
else that the State can achieve without in the
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44
THE COM I N G TRADE WAR
slightest degree hampering the individual o r
trader much else that it must of necessity
undertake if Britain is to win the war that lies
before us
First then the State must recognise that
the success of our national e ff ort must in the
ultimate depend upon the well being and
wealth of the producers It is quite clear that
if the British workman has to compete with
skilled or unskilled workers who are able to
bring to bear on their occupation a degree
of energy good will and ability that he cannot
command then we shall be hopelessly de
feated in the industrial struggle O bviously
therefore it should be the first care of the
State not merely on philanthropic or humani
tarian grounds but simply and solely because
of business considerations to see that the
conditions of life among the working classes
are such as will enable them to produce more
than their competitors It is idle to deny that
at present the German proletariat is not at
an immense advantage as compared with the
wealth producing classes in this country It
is quite clear for instance that o f recent
years Germany has given far more attention
to the housing of her working classes than
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THE COM I N G TRADE WA R
we have in Great Britain We are of course
aware that the movement for housing reform
ha d its rise in these islands But the fact
remai ns that while Germany has during the
past twenty years devoted a considerable
amount o f time and attention t o say nothing
o f money to the improvement o f the housing
o f he r people we here in Great Britain have
fa i led to keep up the pace we s e t N o w this
i s very lamentable from many points of view
but from none more s o than the severely
business standpoint which regards the work
man simply and solely as an instrument to
produce profit It is quite obvious that a man
livi ng as many o f o u r workmen do live
under debilitating n o t to say deplorable
conditions cannot produce so much during
a given period as o n e who has enjoyed the
benefits o f fresh and comfortable surround
ings I f therefore we are going to enter upon
the trade war w i th any sincerit y and co n
vi ct i o n we must regard money expended upon
housing as a capital i nvestment designed t o
increase the produ ctivity o f o u r wealth and
we s hall no more begrudge its expenditure
than we ought t o beg rudge the purchase o f
new and more effi cient machinery o r the
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THE C O M I N G TRADE WAR
matter a wealth of evidence There have been
Royal C ommissions Parliamentary enquiries
and House of C ommons debates almost a d
n a us ea m but he would be a sanguine man who
could persuade himself that there have been
any cardinal improvements in this matter of
”
the housing of the people "our peasantry
“
said C harles Kingsley fifty years ago
are
”
worsed housed than your horses That is a
true bill to day In the towns some slight
improvement has taken place ;here and there
an enterprising manufacturer has realised the
advantage that would accrue to him and his
S hareholders by providing his workpeople
with superior housing accommodation But
the fact i s that if we were commercially alert
we should make it our business to see that
the improvements which capitalists like Sir
William Lever and M r C adbury have organ
ised for their o wn benefit were made to apply
t o the community as a whole It would be
probably impossible to measure in mathem
a t i c a l terms the precise advantage that the
State would receive in 3 d if the majority
o f its people were comfortably and adequately
housed but o f this we are certain that the
increase in our productive power would
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THE COM I N G TRADE WAR
trans c end many of the most important i n
ven t i o n s
whose advent has s o materially
added to our wealth
There is another matter in which as it
seems to us it is essential that the State should
enter on as regards industry Recently Lord
M ilner in the course of a very remarkable
lecture urged that the State should appear
in all future transactions between L abour and
C apital as the
Third Partner
He laid
stress upon the fact that we were for the first
time in our industrial history limiting the
return to capital by taxing war profits and
he asked why that arrangement should end
with the war and why the return to capital
should not in the fu ture be restricted by the
action o f the State which could return a
portion of the profits so earned to the work
man engaged i n the particular industry
con c erned That it occurs to us is the most
pregnant and practical suggestion yet made
with a V iew to approa ching a solution of the
Labour "
uestion But whether it is adopted
or not o f this we are confident that some
means will have to be found after the war for
allaying that constant labour discontent an d
friction which for five years preceding the
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THE C O M I N G TRADE WAR
outbreak o f hostilities constituted a mo s t
ser i ous drawback to o u r production I f Lord
M ilner s suggestion cannot be carried out
then it would be well for the heads o f o u r
large businesses an d trading concerns to see
if they cannot devise some means whereby
labour can be given an interest or bonus in
the receipts and profits o f the business
Again let us s a y that we urge this not because
o f humanitarian principles but because i t is
absolutely essential that certain developments
in the labour movement whi c h cannot be
suppressed by legislation should be gu arded
against i n the near future Syndicalism the
”
s ympathetic strike
the action by huge
aggregations o f wage earners indiscriminately
directed against capital are likely in the future
t o have a profoundly depressing e ff ect upon
the development of British industry unless
they are checked and so far as we are able
t o see the only certain means o f achieving
this is by giving a wage earner a direct i nterest
over and above hi s wages in the prosperity
such
o f the business in which he is engaged
interest must be o f a t angible ki nd that is to
it must be paid in money and n o t in
s ay
s crip or future benefits
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THE COM I N G T RADE WAR
m aki ng mu n i tions against the evi l day o f
war But we ar e not sure that thi s who l eso m e
rule cannot be applied to othe r industries
I t i s proba ble that we s h all never aga in al l ow
the Germans to obtain s u ch a hold as they
sec ured before th e war upon the meta l
i ndustry to take o n e e xa mple or the e l e ctri cal
busin e ss for another It i s quite clear that ,
unless the les so ns o f the Wa r are t o be ab so
l u te l y disregarded b y us then the n ation
mus t schedule c ertai n trades whi ch n o t
me r ely because o f their bus in e ss value but
n ati o nal grounds s hould be fin ance d
on
under State control by exclus ively Briti sh
capital and m aintained at a high leve l o f
production whet h er the i mm ediate dema nd
j ustifies i ts output o r not That shoul d be
done as an i ns ura nce agains t w a r We ventu r e
t o think that th e same a rrangement s h o u l d
apply i n a l ar ge degre e to agr i cu ltu r e w We
have seen during th i s war the pr ice o f wheat
and o f bread s h oot up to famine figu res and
this despite the f a ct t h at i n general the pr e
domi nance o f our fleet has n eve r been mo re
Obvio us I t is quite clear th at had th e G o ve rn
ment ha d under their control a res erve o f
whea t o n which they coul d have drawn as
on
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5
THE CO M I N G TRADE WAR
and when the occasion demanded those
figures would never have been reached and
we shoul d have been spared many exactions
and inequalities that have pro ved grievously
opp ressive to our people The case for the
organisation of the State Granary used often
to b e urged before the war ; to day the
arg uments to be advanced on its behalf are far
stronger and to them may be added another
namely that the building up of a reserve of
w h eat such as we have spoken of would
keep ma n y thousands of small h olders o n the
lan d and thus further protect us against that
unemployment which is likely to prove one
o f our greatest perils after the conflict in
whic h we are now engaged is over
Beyond that conflict looms another more
arduous it may be more terrible in its
exa ctions perhaps even more momentous
i n i ts results Let u s reme mber that the
soldier fighting to day in the n atI On al cause
with a heroism no wor d s can describe is at
least protected against hunger an d he i s we
fire d
ar e a l l proud to know well equi pped
by a fin e e n th usiasm sus tained by a g reat
faith capably led and well supported by his
c omrades But the men and women o f the
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THE CO M I N G TRAD E WAR
future who have to wage the trade war o f
—
which we have been writing what wi ll their
fate be if we are unsuccessful "their food
their clothes the i r mor a le h o w will these
contrast with those o f
Tommy P O nce
they l apse i nto the ranks o f that other army
—
—
the unemployed they will drift aimlessly
and hopelessly without inspirat i on o r leader
ship u p and down the great industrial back
waters o f England where the y will find n o
use for their skill n o emplo yment f o r the i r
thews and S inews Perhaps some o f them wi l l
look back to the time when they played a
ma n s part in the trenches and wonder wh y
with its resources and strength a great nat i on
th at ca l led o n them when she was at war can
find nothing for them to d o now that the
p i ping times o f peace have come They wil l
seek f o r any task however hard and it shall
be denied to them They will beg for brea d
f o r their children and they will beg in v a in
The countryside wrl l s e e the soldier come
—
back to the plough to learn that there i s n o
field f o r him to till The towns and the c ities
wil l watch the troops g o marc hing by aga i n
in other pro c essions this time pro c essions o f
—
st arveling unemployed o f strong men wh o
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54
C HAPTER VI I
C OMMU N I T" OF I NTEREST
.
0
we
have pres ent ed the subj e c t
to o u r fellow bus iness men of Great
Britai n i n a hortatory and even a prov o
—
cative s pirit and we confess to ha ving
delib e r at ely des igned to stimulate and eve n
t o sting o u r read ers into an alert a n d e n ergeti c
o utlook o n the question The British lion in
its feline re posefu lness o f stren gth is slow to
rouse t o his full height of la shing and rampa nt
a et i v i t ; But when he i s roused nothing c an
y
resist his masterful and unswerving strength
If anything has proved this it is
o f energy
Britain s rapid change from the lion co uch a n t
t o the lion rampant
Let us now conclude by briefly visualising
those environing circumstances of the enemy
the resultant o f the war in its military aspects
which seem to favour and encourage our
action commercially We have shown h o w
in Germany s astonishing and masterful pro
gress in industry her great need for credit
h a s been met by a bankin g system which
far
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THE C O M I N G TRADE WAR
-
er r e mo tes t vi l l ag e s an d ass i sted
the smallest trad er farm l abourer or peasant
pr oprietor to de ve lo p a n d secure c r e dit for
the hu mblest exerti ons o f lab o u r and busin ess
ra
mi fie d
h
to
t
,
,
"
s
*
b e en mos t
s u cces sful
'
ins t i tu t i ons
.
in
c
pe a c e
.
‘
,
i t is
p on p ea ce
u
f at lr e k ind h ave f mle d
'
o
*
.
Art d I th e
credit i nstitutions of the people have
disappeared in the catastrophe and casualties of
war hundreds of industrial centres are closed
down and export trade is in a state of suspended
animation Similarly the mortgage banks o f
the middle classes have become dangerous l y
decimated M ortgages on property have
depreciated to the point of invisibility they
cannot be foreclosed bonds can find no
market Before the war Germany was mort
gaged up to the hilt She has n o w borrowings
over her mortgages Interest was formerly
us
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THE COM I N G TRADE WAR
p ai d by borrowing and is n o w paid by more
borrowing
until the future has become
mortgaged in a measure o f untold years
Fu r thermore interest is paid by paper which
i s i tself at a discount in all neutral countries
An d through it all public l oans have piled
up and credit is defecated to the tenuity o f
a soap bubble as Turkey Bulgaria and other
dependents upon the German Emp i re drain
her o f the last pennyweight o f gold o r strip
her o f the last shred o f credit Amidst all this
collapsing credit Germany has to finance the
boom o f trade S he s o confidently anticipates
and s o feverishl y prepares f o r C an s h e d o it P
Her economic forecast and provision clever
as it was w as contingent upon a brief and
brilliant campaign Its prolong ation wil l most
probably be catastrophic f o r her We must
look to it that we advantage b y it
O ne powerful factor i n the weakening o f
the enemy as compared wi th ourselves i s that
Germany entirely lacks affi liated support
Her Allies are all a phenomenal drag upon
her G r eat Bri tain o n the other hand i s
entren ched with the immense and unimpaired
assistance o f her wealthy C olonial Empire
And France alone h as evin ced unexampled
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THE C O M I N G TRAD E WAR
:
Tr e as u ry N o t es
conve rtible into gold at
demand Germany s note c ircu lation equ als
three times the amou n t of ber gold When
h e f i nte rnational trade is r e s u me d t h e strain
upon her tenuous financia l re s o u rce s in the
reconstruction : of h e r c o mme rCe w ill be
enor mous So far G erman y is th e o n ly b e li
a re
’
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Si l e n t MS
Hff er
discreetl y dr g behind in
ance All exhi bit anxie t y ove r the
a
.
Germa n y
h as
a
lread y ap pr oa ched
th e
.
u
f o od
po i nt
them O ur latent p o we r s in mis direc ti on
should nece ss ity arise are s till very great
What will the position become when the
mark has SO far fallen that only gold will be
acceptable by the neutrals for German needs P
Will she turn to her gold reserves for relief
I f s o what assets remain to her for exchange
for raw materials and for the general pro
motion o f the trade boom P It has transpired
that the prolonged and ineff ective attack on
Verdun was dictated by Germany s leading
group of financiers It is certain that the
whole of this district is a field of supply for
.
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1
60
THE C O M I N G TRADE WAR
iron ore upon which the German Emp i re
outlook f o r o urselves is en
co u r a g i n g
the final note must be o n e o f
warning Production and trade during war
‘
h as its di fl i cu l ti es but we have be c ome inu red
to them Troubles will be increasingly ac ute
when war shall have ceased a n d although the
enemy will be weighed down with h is o wn
we shall have to squarely face many embarrass
m ents In the first place as we have al r eady
shewn there wil l b e a stead y flow o f dis
charged soldiers from the variou s foci o f
military activi ty to find th eir places In civil
life M unition workers wi l l be similarly
tra nsposed from the centres o f supernormal
actively to the centres of normal life The need
for the dilution of labour will have ceased
and women will be compelled to adjust
themselves to their former phases O f domestic
civil social or commercial existence Problems
of relief and reinstatement of men who have
”
done their bit and have su ff ered for it
physically or socially wi l l have to be handled
and disposed o f Then economic r e adjust
ments will press upon our attention and
engender irritating condit i ons We S hal l be
th e
While
,
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.
1
61
THE COM I N G T RAD E WAR
deprived by the casualties of fighting of
the services of many good and great men
Some depreciation o f industrial plant will be
discovered Repair and renewal wi ll be
needed M any will find themselves minus
their most cherished securities O ur financ i al
machinery will have suffered disturbance
and require restoring to normal requirements
C ap i tal may be in tight places its mobility
d i fli cu l t and i ts cost in interest high Internal
dislocation wi ll be paired with external dis
tu r b an c es through the prevalen c e o f new
national trade enmities and their correspond
i ng r e adjustments And then with all these
d i ffi culties o f readjustment and re c onstruction
we must be ready to meet labour troubles
a nd to appease the time honoured struggle
between C apital and L abour
These things suggest the rugged paths
whi ch the c ommercial wayfarer will have to
travel o n his way back t o the normal and
fru itfu l fields of industry and the fair table
lands o f trade Ea c h in his distinctive S phere
o f exertion w i ll have to bo l dly and squarely
fa c e his specific problem But he must extend
his vision further than the mere self sphere
o f the individual
It must reach out to the
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1
62
THE COM I N G T RADE WAR
maintained if we are to once more accomplish
in that N ew Wo rld o f C ommerce whi ch l o oms
before us And well may Whitman s heroic
i ncitement thri ll u s at the prospect
"e a r s of t h e m o d ern "e a rs of t h e u np erformed
"our h ori o n ri ses I see i t p rt in g away for m ore
a ugust drama s
I see tre m e n d ous e n t anc e an d e i t n e w c o m b ina t i o n s
th
so li d a ri ty of r ac
I see t ha t for c e a d vanc i n g w i th i rres i st i bl e p o w er in t h e
w o rl d s st ge
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MR
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DWI N
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PA G E A N T O F D I C KEN S
By w W A L T E R C R O T C H
P r e i d n t f h Di c k n Fe l l o w h i p
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in g ha s graci ousl y acc e p ted a c o py of M r C rot ch s n e w
d d
book Th P a ge an t of D ic ke n s
Th S
O P I N I O N S O F T H E P R E SS
I t i s a book t ha t may w e ll be re c o mm e n ded to t h ose wh o a re
tryin g to fil l t h e l e i sure of c o n v al es c e nc e for i t i s n ot o nly w e ll
w ort h re a d in g for i ts o wn s ake but be ca use i t will se n d i ts re a ders
b ac k to t h e ma ster him se l f t ha t k in d ge ni us a s T hac keray
call ed him wi t h a n e wly awa ke n ed in terest —Sp
M r C rot ch s book i s o n e which s h ou l d be re a d b y every
a d mi rer of D ic ke n—
s —t ha t i s to s ay by every bod y w h o i s n ot a
p r i g or a hal f wi t M C C
in Th N w Wi
M r C rot ch impa rts so de li g h tfu l a li tera ry fl a vour to hi s
chap ters t ha t t h ey ha ve all t h e re li s h of an e c e ll e n t re pa st
h e ac ts n ot o nly a s gu i de but a s h e lp fu l c r i t ic an d hi s e p os i t i o n s
of t h e a ut h or s p ur pose d i s play a ma stery of t h e subj e c t
Th
vol u m e i s a fi tr i bute to D ic ke n s a s man an d n ove li st
We
c o n gra tu la te M r C rot ch wi t h out reserve u p o n a hi g h achi eve
m e n t in li tera ture an d w e a re gra tefu l to him for—
a v al u a b l e
a d d i t i o n to D ic ke n s ian c r i t ici s m an d in ter p ret a t i o n J C W in
t h e M h t Ci y N
M u ch e n t h us ia s m m ust ha ve go n e to t h e ma k in g of t hi s book
an d a d mi rers of Dic ke n s will rea d i t wi t h e n t h us ia s m W e h o p e
i ts m ess age may be reg a rded a s i t deser es to be for t h e out l ook
G
i s w i de an d ill u mina t i ve W tm
M r W Wal ter C rot ch ha s t h e m er i t of b e in g a s inc e r e
e n t h us ia st an d t h oroug hly fu ll of hi s subj e c t H ha s a true c o n
of t h e D ic ke n s s pi r i t
su ch a book l e a ves us mu ch in
p i
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M r W Wal ter C rot ch i s a d i i ge n t an d d i s c ri mina t in g
tud n t a s w e ll
l oyal an d l ov in g a d mi rer of D ic ke n s an d in
Th P a ge an t of D ic ke n s t h ese q u ali t i es a re to t h e fore
It
i s a ge nial re a d a b l e book w ort hy of i ts gre a t ubj e c t D i ly
G ph i
A b ook for t h e Fe ll o w s h i p
a b ook to b y an d re a d an d
re a d an d t h e n re a d a gain a book to be tre a sured but ke p t
alway s o n t h e l o w er s h e l f wh ere i t i s e a s y to be got —
M
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