A War of Commerce to Follow
By Sir William Ramsay
That commerce in Germany is regarded as war, that the "powerful mass of the German State" is projected into methods meant to kill off the trade of other nations, and that after the war between the nations the German war with British trade will be resumed, is the burden of this address. Sir William Ramsay delivered it in Manchester on Jan. 22, 1915, before representatives of British associations of employers and of leading industrial concerns in many parts of the United Kingdom, making up the Employers' Parliamentary Association. Sir William is one of the world's great chemists.
I suppose that among my audience some are convinced free traders, while some believe that our commercial interests would be better served by a measure of protection. This is neither the time nor the place, nor have I the knowledge and ability for a discussion of this much-debated question. Nor will I reveal my own private views, except in so far as to say that I agree with the majority. But, as the question cannot be ignored, I should like to say that I hold firmly the conviction that all trade should be carried on for the mutual advantage of the parties engaged. The old fable of Æsop may be quoted, which relates to a quarrel between the different members of the body. Every one of us can be, and should be, helpful to every other, independent of nation, country, and creed. That is, I am sure, what lies on the conscience of each one of us, as an ultimate end to be struggled for, although perhaps by many considered unattainable.
For the same kind of reason, it appears to me that we all think that peace is a blessing, and war a curse. For under peace commerce and industry prosper; science and the arts flourish; friendships are made and adorn the amenities of life. Moreover, our religious traditions in all Christian countries, and in some non-Christian ones like China, influence us to believe that war is wrong, indefensible, and, in the present year of our Lord, an anachronism.
We imagined, perhaps not most, but many of us, that no important European nation thought differently. Your leading Liberal paper, The Manchester Guardian, on July 22, 1908, wrote, "Germany, though the most military of nations, is probably the least warlike"; and this doubtless represented the views of the majority of Englishmen. Some of us knew better. I have, or had, many German friends; we have lived for many years on a footing of mutual kindliness; but it was impossible to disregard the signs of the times. The reason of this war is at bottom, as we have now discovered, the existence of a wholly different ideal in the Germanic mind from that which lies at the base of the Latin, Anglo-Saxon, Dutch, or Scandinavian nations. Such a statement as this is sweeping; it can be illustrated by a trivial tale. In 1912 an international scientific congress met at Berlin; I was a member. Although the conventional language was German, in compliment to our hosts, it turned out that in the long run all discussions were conducted in French. After such a sitting, the members separated, the German committee remaining behind for business purposes. The question of language was raised, I think by a Dutchman, in the corridor. Of the representatives of the fourteen or fifteen nations present, all were agreed on this—that they were not going to be compelled to publish in German; some chose English; some French; Spanish was suggested as a simple and easily understood language; but there was no love lost between the "foreign" and the German representatives, and this not the least on personal, but purely on national grounds. Acknowledging to the full the existence of high-minded German gentlemen, it is a sad fact that the character of the individuals of the nation is not acceptable to individuals of other nations. Listen to a quotation from a letter I have received from a very distinguished Swiss: "Une chose me frappait aussi, dans les tendances allemandes, une incroyable inconscience. Accaparer le bien d'autrui leur paraissait si naturel qu'ils ne comprenaient même pas que l'on eût quelque desir de se défendre. Le monde entier était fait pour constituer le champ d'exploitation de l'Allemagne, et celui qui s'opposait á l'accomplissement de cette destinée était, pour tout allemand, l'objet d'une surprise." [Translation: "One thing has also struck me in German tendencies; that is an unbelievable want of conscience. To grab the belongings of others appeared to them so natural, that they did not understand that one had some wish to defend himself. The whole world was made for the field of German operations, and whoever placed himself in opposition to the accomplishment of this destiny was for every German the object of surprise.">[ The view is not new; the feeling of surprise at opposition was expressed wittily by a French poet in the words:
Cet animal est trés mechant;
Lorsqu'on l'attaque, il se defend.
This animal is full of spite;
If you attack him, he will bite.
Well, gentlemen, this war has opened the eyes of some of us, and has confirmed the fears of others. Not one of us wanted to fight. Our hand was forced, so that we could not have abstained without national and personal dishonor.
Now, I do not think it is even yet realized that Germany's methods in trade have been, and are, as far as possible identical, with her methods in war. Let me rub this in. As long ago as 1903, at a meeting of the Society of Chemical Industry, under the Presidency of your fellow-citizen, Mr. Levinstein, I pointed out that under the German State there was a trade council, the object of which was to secure and keep trade for Germany. This council had practical control of duties, bounties, and freights; its members were representative of the different commercial interests of the empire; and they acted, as a rule, without control from the Reichstag. You can read what I said for yourselves, if you think it worth while, in The Journal of the Society of Chemical Industry for 1903.
Let me give you a simple case of the operations of that trade council. Ex uno disce omnes. A certain firm had a fairly profitable monopoly in a chemical product which it had maintained for many years. It was not a patented article, but one for which the firm had discovered a good process of manufacture. About six years ago this firm found that its Liverpool custom was being transferred to German makers. On inquiry, it transpired that the freight on this particular article from Hamburg to Liverpool had been lowered. The firm considered its position, and by introducing economies it found that it could still compete at a profit. A year later German manufacturers lowered the price substantially, so that the English firm could not sell without making a dead loss. It transpired that the lowering of price was due to a heavy export bounty being paid to the German manufacturers by the German State.
It is the bringing of the heavy machinery of State to bear on the minutiæ of commerce which makes it impossible to compete with such methods. One article after another is attacked, as opportunity offers; British manufacture is killed; and Germany acquires a monopoly. No trade is safe; its turn may not have come.
Much has been said about British manufacture of dyestuffs, and much nonsense has been written about the lack of young British chemists to help in their manufacture. There is no lack of able inventive young British chemists. Owing to the unfairness of German competition by methods just exemplified, a manufacturer, as a rule, does not care to risk capital in the payment of a number of chemists for making "fine chemicals." He finds "heavy chemicals" simpler. I do not wonder at his decision, though I lament it. There are also other reasons. The duty on methyl alcohol (for which no rebate is given) makes it impossible to introduce economically methyl groups into dyes; the restrictions incident on the use of duty-free alcohol do not commend themselves to manufacturers; these constitute other obstacles in the way of the British color maker. Lastly, our patent regulations are even yet not what they might be, although an attempt has recently been made to improve them. The British manufacturer is thus trebly handicapped.
Besides, the English competitor is at a disadvantage owing to what may be termed systematic and fraudulent attacks, for which no redress has been obtainable. Thus the manufacturers of Sheffield still complain, I suppose justly, that German articles for foreign consumption bear the words "Sheffield steel" stamped upon them. I myself have been approached by a German swindler with the proposition that I should assist his firm in infringing patents; he was surprised and pained to learn that I did not consider his proposal an honorable one.
Nor are methods like these confined to business or manufacture; they have greatly affected British shipping. Our shipping companies, in good faith, have associated themselves with others in "conferences," apparently for the mutual advantage of all, forgetting that behind the German companies lay the powerful mass of the German State. Tramp steamers, and with them cheap freights to the East, have been eliminated. The Royal Commission on Shipping Rings, which met some years ago, referring to the system obtaining in Germany, and fostered by the German Government, on charging through rates on goods from towns in the interior to the port of destination, observed in its report: "Such rates constitute a direct subsidy to the export trade of German manufacturers, and an indirect subsidy to those German lines by whom alone they are available. And as they are only rendered possible by the action of the German Government, it appears to us that the British lines can in no way be held responsible for the preferences which these rates afford to German goods." Now, our Government pays large mail subsidies to many of our shipping companies. Could these not be so utilized that it would become impossible for Germans to capture our trade by indirect state bounties?
These are a few examples (and your greater knowledge will enable you to supplement them with many others) of the methods which have been employed against us by Germans with the co-operation—nay, the active support—of their State.
Of late a new factor has appeared. The German Imperial Chancellor made his noteworthy (or notorious) remark about a "scrap of paper." And Dr. von Bethmann-Hollweg, speaking in the Reichstag, acknowledged openly that the German Nation had been guilty of a "wrong" to Belgium. This breach of faith has the approval of the whole German people. Do they realize what it means? Are they not aware that no treaty, political or otherwise, with the German people is worth the paper it is written on? That the country and its inhabitants have forfeited all claims to trust? That no one, in future, should make a bargain with a German, knowing that he is a dishonorable and dishonored man?... Germany has made many blunders—an almost inconceivable number of blunders; but this blundering crime is surely the culminating point of blunder. Did any nation ever before deliberately throw away its political, commercial, financial, and social credit to no purpose? To gain what? England as an adversary, and the contempt of the whole civilized world. Her treatment of the poor Belgian civilians has added to contempt, loathing and scorn.
Now, gentlemen, you see our problem. At, the end of this war we shall have Germans again as trade rivals; if there is a German State our German rivals will be backed by their State. They will, as they have done before, steal our inventions, use trickery and fraud to oust us from world markets, and we know now that we need not expect any bargain to be binding. I am not a commercial man; science is supposed to be above such trickery. Yet I read a few days ago, not as a single example, but only as the last I happen to remember, an article by a distinguished American professor, protesting with great moderation that an important scientific generalization which he published in 1902 had been annexed, without acknowledgment, by a versatile and adroit professor in the University of Berlin—an acquaintance of my own—in the year 1906; and it was not until 1910 that the latter was made to confess his guilt, with much subterfuge and blustering.
Commerce, indeed, is in Germany regarded as war; we now know it, and we must meet war by war. How is that war to be waged?
I can see only two methods. One is recommended by a writer in The Observer of the 10th inst., who acknowledges himself to have been a lifelong free trader. His remedy is a 25 per cent. duty on all German goods, and on German goods only, imported (or rather offered for import) into Great Britain and her colonies, and also that German passenger liners and freight boats should not be allowed to call at any one of the ports of the empire. His reasons are fully stated in his letter; it is signed "A City Merchant."
The other method is perhaps less apt to offend free trade susceptibilities; it is to impose on what remains of our opponents at the conclusion of this war free trade for a term of years. It remains to be seen whether we shall be powerful enough to insist on this measure, or to persuade our allies that it is one likely to fulfill the proposed end. It is, so far as I see, the only other alternative.
Those who are thoroughly convinced of the benefits of free trade should welcome this suggestion, unless, indeed, they think that such a blessing is not deserved by Germany. On the other hand, they may comfort themselves with the certain knowledge that no possible punishment inflicted on the Germans could possibly be more galling and repulsive to them. Doubtless, too, it would suit the books of our allies very well, who could impose on German goods any duty they thought fit, and deposit their surplus and inferior goods in Germany at a price which would defy competition. But these are questions which I must leave to those more conversant with the merits and demerits of free trade and protection than I am.
Whatever view you take, you cannot but acknowledge that the situation calls for early and anxious deliberation, and well-thought-out and firm action; and it must be action taken as a nation—through our Government—whatever the political complexion of the Government may be at the close of the war. It is for you, as members of the Employers' Parliamentary Association, to make up your minds what you wish to do; above all, to agree, and to take steps to force the Government in power to carry out your wishes.