757. Commerce of Germany during the war.—Germany maintained active commercial relations with the other Central Powers, importing particularly foodstuffs from the rich plain of the Danube basin, and lignite (brown-coal) from Bohemia. Trade with the more distant allies, Bulgaria and Turkey, proved difficult and relatively unimportant. Railroad facilities were in such demand for the transfer of troops and the movement of munitions to the front, that they could hardly be spared for distant service in southeastern Europe; water carriage on the Danube was preferred but was slow and ineffective.
There was a marked increase in the value of trade with neutral states, of which three, Switzerland, Netherland and Denmark, were directly adjacent, while Norway and Sweden were separated only by water which lay outside the control of navies of the Entente. These states accounted for about one-seventh (14%) of the total trade of Germany in 1913, and took on a new importance when Germany was denied other sources from which to supply her wants. The German government has not supplied statistics by which to measure changes in trade during the war, but they can be traced in the commercial statistics of the neutral states, and are illustrated in the following table.
| Foreign Trade of Denmark, 1913-1919 | ||||||
|---|---|---|---|---|---|---|
| (Values in million crowns; crown equals $.27) | ||||||
| Total imports | Imports from Germany | Total domestic exports | Domestic exports to Germany | Total foreign exports | Foreign exports to Germany | |
| 1913 | 855 | 328 | 637 | 159 | 84 | 20 |
| 1914 | 795 | 265 | 780 | 275 | 87 | 26 |
| 1915 | 1,157 | 200 | 979 | 436 | 150 | 50 |
| 1916 | 1,357 | 265 | 1,177 | 653 | 132 | 38 |
| 1917 | 1,082 | 237 | 968 | 482 | 97 | 6 |
| 1918 | 946 | 316 | 710 | 307 | 48 | 1 |
| 1919 | 2,605 | 335 | 740 | 187 | 268 | 79 |
A feature of the table which deserves particular attention is the relatively small amount of foreign wares which reached Germany through Denmark. Doubtless wares of this kind were smuggled across the border in considerable quantities, and so do not appear in the statistics; but the strictness with which England, in behalf of the Entente, regulated the importation of these wares by the neutral countries, allowed no large surplus for export to Germany, and strangled the overseas trade of that country.
Germany imported from all these neutral countries foodstuffs, especially meat and fats; from particular countries she imported iron ore, metals, and special textiles for military purposes. Payment was made largely in coal and iron products, for which the small states had been used to rely on Germany, and which they sorely needed.
758. Effects of the political revolution.—Sections above enumerated various losses which Germany suffered as a result of the war. To appreciate the condition and prospects of the country after 1918 it is necessary to consider another element of weakness, of which the importance cannot be questioned, even though it may be hard to estimate. This is, namely, the political revolution which accompanied the armistice.
All the faults of the military monarchy of the Hohenzollerns appeared prominently in the outbreak and in the conduct of the war. The world paid a tremendous price to be rid of it, and did not count the cost. The evils inherent in the old political system should not be allowed, however, to blind our eyes to some merits that it had, notably its honest and efficient administration. They should not obscure the important fact that the old system, however bad it might be, was that to which the German people were used, and without which they were at a loss. The monarchical system was deep-rooted in German life. Most of the people accepted it with sincere conviction; the opposition to it, as exemplified in the party of the Social Democrats, was perfunctory rather than popular. In reliance on the monarchy the people had been content to retain a passive attitude; they lacked a sense of individual political responsibility, and lacked political initiative. When, therefore, the people realized at last that their trust had been misplaced, that the war which was to be over (so they had been assured at its beginning) by Christmas, 1914, was never to be ended until they had confessed to utter defeat, they swept away the old system but did not know how to operate the political machine which they erected in its place. Attempts at social revolution by the radical Spartacists, infected by Russian doctrines, and at reaction by adherents of the old military monarchy, rendered the new republic insecure at its foundations; while the desperate conditions of life prevailing at the close of the war shattered the former administrative organization and rendered the new administration costly and ineffective.
759. Peculiar importance to Germany of sound politics.—A decline in political efficiency will have a more serious effect on the productive organization in Germany than it would have in other countries for two reasons. (1). The state has taken a particularly active part in the control of economic affairs. Its power over them was greatly extended in the course of the war, and is still so great that much depends on the wise exercise of this power. (2). The state will transmit to the people by taxation the burden of paying reparations. This burden will be and ought to be a heavy one. The minimum amount to be paid annually, under the terms of the London Settlement of 1921, is variously estimated by German economists to amount to 8 or 16 or 28 per cent of the total real income of the country. The proportion, if we choose the middle figure, does not seem unduly high. Many, perhaps most, American families could sacrifice one-sixth of their income, and still retain the essentials of health and happiness. Conditions were very different in Germany at the close of the war. A considerable part of the people was on a stage of living which may fairly be termed a minimum; depression below that stage implied an actual loss in productive efficiency. Under these conditions it was of peculiar importance that the tax system should be just in principle, economical and impartial in administration. No slight importance, therefore, attaches to the fact that the government even in 1921, three years after the armistice, was still unable to balance its budget, and was meeting its domestic obligations by issuing more and more paper money, a tax which in the long run is of all taxing devices the least effective and in its immediate effects is the most iniquitous.
760. Dismemberment of Austria-Hungary.—Some time before the end of the war, while the power of resistance in Germany still was strong, Austria-Hungary gave evidence of distress. The state had been held together by the military dominance of a minority, and as the end of the war approached and the failure of the military party was evident, the state dissolved into its component parts by a natural process quite independent of any action of the Entente.
Fragments of the old dual monarchy were absorbed by bordering countries. Galicia, the great crescent-shaped province lying to the east of the Carpathian mountains, went to the new state of Poland. It had been grievously ravaged in the course of the war, but promised to develop in time considerable agricultural resources, and was particularly prized for its supply of petroleum in the east and the coal mines of the Teschen district attached to it in the west. Transylvania, with parts of some adjacent provinces, brought to Rumania an area rich in forest products, with some mineral resources and some fertile grain land (Banat of Temesvar). Rumania became by these accessions and by the acquisition of Bessarabia, on the Russian border, one of the larger states of Europe, with a population (about 16 million) double that of Jugo-Slavia, the next largest state in the Balkan peninsula. This new state grew out of the old Kingdom of Serbia, in which the World War began, and which was finally rewarded for its sufferings in the war by union with the kindred people along the Adriatic coast and in the southwest of the old dual monarchy. The trials of Jugo-Slavia were not ended with the war, for it had still to make good its claims to Fiume, its natural outlet at the head of the Adriatic. The justice of its claims were not, in the opinion of the writer, open to serious dispute, but Italy, which had already pushed its Alpine frontier far past the Austrian districts occupied by an Italian population, was jealous of a possible rival in the Adriatic, and refused to agree to the occupation of Fiume by another power. The unfortunate exploits of the Italian bravado, D’Annunzio, complicated the issue, but it was at least settled by a compromise between the two powers which promised in the course of time to give Jugo-Slavia the commercial outlet essential to its prosperity.