England and Germany

by Emile Joseph Dillon

The device is simple, and has hitherto been efficacious. In Switzerland the number of German firms is large and continues to augment. They are branches of German houses, and their aim is to further the interests of these. They mask their intentions by assuming Swiss names and also by obtaining for their employees naturalization papers in the little republic. How, it may be asked, do the Allies propose to thwart these manœuvres? They probably have not given the matter a moment’s serious consideration. A Swiss journal of repute[147] published some time ago a characteristic letter received by a Swiss business man from a German textile manufacturer. One passage is worth reproducing: “The actual situation renders it impossible for us to maintain relations with our former customers. Hence, it is of the utmost importance for us to be informed respecting the commercial and financial situation with a view to the resumption of our intercourse in a lucrative form after this long interruption. It is our intention, therefore, to have our products sold through a Swiss branch by Swiss agents.”[148]

With their incorrigible disposition to judge others by themselves, the British people fancy that after the war a wave of liberalism will sweep over Germany, demolish the strongholds of militarism there, and reveal a pacific, level-headed nation with whom it may be possible to hold friendly intercourse. This, to my thinking, is also a delusion. Even if the Kaiser and his environment were dislodged from their places, Germany’s ideals, aims and strivings would remain unchanged. But the Kaiser and his Government are minded to leave nothing to chance. They, too, have their plans, which are simple and comprehensive, and would appear to have escaped the notice of British optimists. And yet they are well worth consideration. The Germans themselves put the matter thus—

The enormous expenditure necessitated by the war will call for special financial legislation of which the keynote will be found in monopolies. Now, the present German Finance Minister, who is a banker by training, intends that the monopolies to be created shall be effected, not by the unaided resources of the State, but by its co-operation with the interested business men and banks. On this basis he is working at monopolies of cigarettes, life insurance and electric power. This complex arrangement is facilitated by the machinery of the banks and their peculiar activity. And here we touch upon one of the main sources whence German organization after the war will draw its vitality. It is on the operations of these financial institutions that it behoves us to lay stress. They are so many magnetic centres which attract nearly all the free capital of the country and then employ it as they think fit. And one momentous consequence of this command of money is the possession of almost unrestricted power over industrial enterprises, present and future. For it depends on the banks to extend these and to restrict the output of those in consonance with the economic policy pursued by the State.

Nor should it be forgotten that the power and influence of the banks is not limited by the amount of capital they actually possess. Over and above this they wield all the financial force conferred by the vast amounts deposited with them by customers. This was evidenced in the case of the Banca Commerciale in Italy, which had a working capital of £6,240,000 in the year 1914. Now, of that sum only 2·5 per cent. was owned by Germans, yet the bank itself and all the industries dependent on it were exploited by the German Board of Directors.[149] In the Fatherland we observe the same phenomenon. All the German banks together, excepting the hypothecary institutions, owned £195,000,000 sterling, about 44 per cent. of which belonged to the eight principal banks of the empire.[150] Possessing only £86,050,000 of their own, they disposed of £259,600,000 belonging to other people.

One effect of the establishment of groups of monopolies will be to increase the number of persons dependent for their livelihood on the State. It is calculated that the total, including heads of families, will amount to tens of millions. The corn monopoly will bring in five million farmers, heads of families, who will have to look to the State for the amount of their yearly income. For it is evident that the Government will be “co-operating” not with the peasants, but with the great landed proprietors. Now, these are the men whose backing is indispensable, and has never been wanting, to the military and court parties who are primarily responsible for the war. Once the wages of the workmen and the interest on capital become dependent on the State, the entire nation is but a vast machine worked by the men in power. To suppose that these will lend a willing ear to the demands for political liberty which are certain to be made after the conclusion of peace is to expect the impossible. What will probably happen is a keen struggle between the classes and the masses for the mastery, but until it is decided in favour of the latter, the Germany of the future will continue to be the Germany of to-day.

In the meanwhile, the Teutons, despite their striking inferiority in numbers and resources, have kept the Great Powers of the world at bay, have defeated their armies, sunk their mercantile marine, occupied their territory, drained their wealth, paralysed their trade and deprived them of all the odds which they owed to circumstance. Organization has thus more than made up for the seemingly overpowering advantages possessed by the Allies at the outset. That it will suddenly lose its worth during the remainder of the campaign is hardly to be expected. The contingency which we may have to face, if we continue to move at our present pace, is manifest to the observant student of politics.

By the average man and our “leaders of men” it is hardly even suspected. Our easy-going optimism is largely the result of temperament and partly, too, of presumptuous confidence born of past luck, and in especial of the relief we feel at our escape from most of the obvious dangers that menaced us at the outset of the war. There has been no trouble over Ireland, no rising in India, no serious defection in South Africa, no invasion of Egypt. And we irrationally feel that these dark clouds, having drifted harmlessly past, the others will follow them. It was said of the Swiss in mediæval times, that they were kept together by the bewilderment of men and the providence of God, confusione hominum et providentia Dei. The same might be truly predicated of the British people of to-day.

But there is no reason for assuming that they will be thus providentially cared for in the future. The Allies have not yet driven the Germans out of Belgium, France, Serbia, Montenegro, Poland or Kurland. Neither have they contrived to starve them into sueing for peace. They talk glibly of exhausting them as though their own resources were inexhaustible. They do well perhaps to make light of the Zeppelins, but they pay far too little attention to the submarines, and seem not to realize the magnitude of the losses which these weapons have inflicted on our merchant shipping, nor to have calculated how long it can hold out at the present rate of destruction. Freights have increased enormously, and they have not yet reached the highest point they are likely to attain. Imports have been restricted, prices have gone up and taxation has increased. Time may not be on the side of our enemies, but is it on ours? It is a fickle ally at best, and to rely on its support is to lean on a split reed.

Optimism of the unreasoning kind prevalent in Great Britain is unwarranted, whether we confine our view to the actual campaign or extend it to the greater struggle of which that forms but an episode. Taking the former case first, one is struck with certain considerations which, without inspiring dismay, ought surely to preserve us from that excessive self-confidence which is too often a hindrance to fruitful exertion. The financial burden and its relation to the limits of the allied nations’ capacity to bear it is a fit subject for meditation when we feel uplifted in self-complacency. Doubtless it is encouraging to watch the symptoms of slow exhaustion displaying themselves in the central empires and to speculate on the consequences of the further fall of the German mark. But these consequences we are too apt to exaggerate. For we misjudge the character, the staying powers, the ideals, the psychology of the German people. We fancy that because they have been reduced from comfort to hardship therefore they are on the verge of collapse. We imagine that because their commercial and industrial classes are keen on making money and ardently desire peace, they are also ready to purchase it by acquiescing in conditions which would dispel their dreams of world power. We feel certain that if Prussia and all the German States received genuine parliamentary government, the costly ambitions of the military party would forthwith be dispelled for all time.

It is by delusions such as these that the British people were hoodwinked in the past, and it is by the same vain imaginings that they may be victimized in the future. For they seem incapable of gauging the German psyche. The two races meet each other in masks. The apparent ingenuousness of the English-speaking Teuton is calculated to throw the most vigilant Anglo-Saxon intelligence off its guard. We have no psychological X-rays by which to pierce the peculiar racial vesture in which the German soul is shrouded, nor are we endowed with the gift of patient observation which might enable us to extract those rays from facts. And so we stumble along, dealing with an imaginary people whom we ourselves have created after our own image and likeness, falling into fatal blunders and recommencing anew.