We shall now examine the six other elements of Germany’s present advantageous situation—those which result from the domination which the war has enabled her to exert over her own allies, Austria-Hungary, Bulgaria, and Turkey. This domination, which amounts practically to actual seizure, has permitted her to fulfill the scheme of Central Pan-Germany as a result of the crushing of Serbia.
II
The second element of German advantage:
the Pan-German loans
A portion of the approximate sum of 115 billion francs devoted by Germany, up to the end of July, 1917, to the carrying on of the war has enabled her to burglarize her own allies by taking advantage of the extremely bad financial situation which faced them at the end of the Balkan wars. As a result of this situation, Austria-Hungary, Bulgaria, and Turkey, in order to sustain the present long-drawn-out struggle, have been forced to draw on the credit of Berlin. The sum total of the loans made by Germany to her allies and secured by her own war loans cannot yet be verified, but there can be no doubt that it mounts up to a respectable number of billions.
These loans have worked out to the immense advantage of Germany, for the following reasons. Established facts prove that, without the assistance of Austro-Hungarian, Bulgarian, and Turkish troops, and without the numerous products supplied her by the Orient, Germany would have been beaten long ago, even in spite of the Allies’ blundering. As these troops and resources are of priceless value to Germany, it would seem that she must have paid dearly for them, and in gold. However, as the reserve of the German Imperial Bank was 1,356,875,000 marks in July, 1914, and 2,527,315,000 in February, 1917, it is certain that Germany has not lent gold to her allies,—in large quantities, at any rate,—but only paper, whose value depends solely on the strength of German credit.
In reality, therefore, Germany, simply by keeping a printing-press busy turning out little stamped slips of paper, has obtained troops, food-stuffs, and raw materials which were indispensable to her in avoiding defeat; and at the same time she has so established herself as a creditor as to give her the right to exact final payment by her allies for advances which were primarily made to them in Germany’s own vital interest.
Now these obligations weigh so heavily on countries like Austria-Hungary, Bulgaria, and Turkey, already in sore stress, that they incur loans which no one of these three countries can ever hope to pay off unless a victory of the Allied democracies should shatter the financial yoke of Berlin.
In order to appreciate the nature of these loans and their consequences, the example of Turkey is particularly instructive. ‘Germany’s advances to Turkey in no way represent Turkish war-expenditure. We must add to them the requisitions made in the country itself, and the war-material purchased in Germany and Austria-Hungary which is not yet paid for.’
At the beginning of 1917 Djavid Bey arranged in Berlin for a new loan of three million pounds, simply to enable Turkey to pay her debts to the Krupp firm, as well as the advances made her by the different groups of financiers and the German Minister of Finance. This means, therefore, that, when Germany sends arms to the Turks in order that they may use them to consolidate the Pan-German scheme, she also finds a means of making this consignment of arms serve to entangle the Turks still more hopelessly in the financial web. ‘In Pan-Germanist circles, there has been much discussion of the compensations which Turkey must make to Germany in return for services rendered in the course of the war. It is the unanimous opinion that Germany, without gaining any territorial acquisitions in Turkey, must have controlling rights in the Ottoman Empire, so that the Pera-Galata bridge may be as near Berlin as Constantinople.’
What has taken place in the spheres of finance between Berlin and Constantinople has, by the very nature of things, been duplicated between Berlin and Sofia, though of course in a less pronounced form. Germany, therefore, by means of paper loans based on her own credit, has caused colossal obligations to be assumed by her allies—countries representing vast areas of land: Austria-Hungary with 676,616 square kilometres, Bulgaria with 114,104, and Turkey with 1,792,900, or 2,583,620 square kilometres in all. Now these three countries are precisely the ones which are indispensable to the carrying out of the Central Pan-German ‘Hamburg to the Persian Gulf’ scheme; the loans, therefore, are Pan-Germanist loans.