There were many reasons that might be brought forward to show how Mr. Lloyd George was justified in asserting that England could stand the financial strain better than Germany. One great factor was responsible for this, namely, the command of the sea. It is true that during the war our trade with Germany, Russia, and France must be practically at a standstill. There are even pessimists who say that our general European trade must be severely crippled until the campaign is over. Even if we assume this to be the case, however, there is, relatively speaking, no cause for despondency. Our exports last year were valued at over £525,000,000. If most of these exports had been sent to European countries, there might possibly be some ground for concern. Of the huge total, however, the countries with which we are at war, Germany and Austria, took exports from us to the value of only £45,000,000; and our exports to every European country, including Germany and Austria, amounted to less than £180,000,000.
Expressed in other words, this means that roughly speaking, one-third of our exports went to European countries, and two-thirds to countries in other parts of the world. We have thus about two-thirds of our ordinary export trade to come and go on—thanks to our command of the sea—and, thanks to our command of the sea also, the oversea commerce of Germany and Austria has for the time being completely broken down. In view of this fact, the significance of which has hardly yet been generally appreciated, it is possible for us at the present time to capture, if not all, at least a large proportion of orders from oversea countries which in the ordinary way would be given to German or Austrian firms. It would be foolish to say, of course, that our economic life can proceed as usual during a European war in which we are involved; but it cannot be too emphatically pointed out that our economical conditions here are, or can at least be made, infinitely superior to those prevailing in the countries with which we are at war, or even in Russia or France. German commerce is ruined; our commerce can be made almost normal.
Take another point. We have a very large income from our investments abroad, which are valued at rather more than £4,000,000,000. It is estimated that our yearly income from this source is £200,000,000, and, in addition, for services rendered internationally, our bankers, brokers, shipping firms, and so on, receive an additional sum of £150,000,000. That is to say, in exchange not for goods but for services, we receive from various nations about £350,000,000 every year. True, a large proportion of this sum is derived from investments in countries affected by the war; and, on account of the war, many of these normal returns have fallen off. It must nevertheless be remembered that much of this large income comes to us from countries which are only slightly, if at all, affected by the dislocation—from India, for instance; Spain, the United States, all our own oversea dominions, and South America. Our interests in Central and South America alone are valued at £1,300,000,000.
There are other points to be remembered in connection with our position as traders. At least ten million men in France, Russia, and Germany have now been withdrawn from industry and are engaged in war. The effect of this on the remainder of the adult population and on normal production is naturally very considerable. In this country we have not as yet found it necessary to withdraw such large numbers of men from their ordinary work. Practically half a million men have joined the second army, and another half-million are asked for. The withdrawal of a million men from our industries is not likely to be seriously felt, especially as many thousands of these men will be taken from non-productive occupations. There is, therefore, no reason why we should not continue our normal export trade as well as—though of course to a smaller extent—our carrying trade.
And now for a glance at Germany's exports. In 1912 they amounted to £440,000,000, and of this figure £106,000,000 represented raw material, and no less than £295,000,000 manufactured articles. Such things as clocks, toys, musical instruments, paints, paper, glassware, iron and steel goods, gloves, hardware, and cutlery were poured into every country in the world. We ourselves took £70,000,000 worth of this stuff; India £6,000,000 worth; Australia £7,000,000; and Canada and South Africa about £3,000,000 worth each. To Argentina, in 1912, went German goods valued at nearly £13,000,000, and to the United States manufactured articles worth nearly £12,000,000. These are a few instances; the consular reports and Board of Trade statistics will furnish several others. A determined attempt must now be made to secure this trade. We shall, of course, have to compete with the United States, where for two or three years past eager attention has been paid to the possibilities of developing the South American market.
Germany, it must be remembered, did not enter upon this campaign without taking into consideration her own economic position, and especially her food supplies. Whether she was able to carry out the plans she knew she ought to carry out is another matter. The advanced state of her mobilisation at the time she declared war on Russia and France made it quite clear that her decision to put her fortunes to the test of the sword had not been taken in a day. Not even the perfect Prussian military machine could have thrown so many troops against the frontiers of France and Belgium at short notice, and it is certain that the Berlin Government, in addition to giving its attention to the organisation of the fighting forces, must have seriously considered the question of the nation's food supply. Yet the circumstantial reports which have filtered through relating to "food riots" in the capital and other large towns indicate that this important matter—perhaps because it is civil rather than military—has not had the consideration to which it is entitled.
Germany is, indeed, in an unfortunate position if her food supply is running short at this early stage of the campaign. So seldom in the history of our own country have our trade routes been blocked for even a short time that it is not easy for us to realise the situation of a country which is dependent for a large proportion of its daily bread upon foreign countries and happens to be cut off from communication with them.
The latest figures show that Germany imported agricultural products and foodstuffs in 1913 to the value of £351,836,900. These figures show but a slight deviation from those of 1912 and 1911, a deviation which changes in the population easily explain. Even when we make every allowance for wines and various luxuries which are classified under this heading, we shall be on the safe side in saying that Germany must import necessary foodstuffs every year to the value of not less than £180,000,000. This is a huge total, and it is accounted for by the fact, which has caused some concern already to German statesmen, that from an almost purely agricultural country Germany has, since the Franco-German War, developed at a remarkable rate into an industrial country. The producer has left the farm for the factory, and though one result has been a vast increase in the wealth of the German Empire, another has been to leave the Empire more and more dependent upon foreign countries for its supplies of the necessaries of life.
Germany obtains a great deal of her meat, wheat, eggs, barley, coffee, maize, butter, etc., from beyond her borders. In 1913, for example, Russia sent her grain and cereals to the extent of 3,600,000 tons, valued approximately at £30,000,000. In 1912 Argentina exported to her grain and livestock products worth nearly £11,000,000. From Hungary she received last year cereals valued at £4,000,000; and even little Roumania contributed £1,000,000 worth of wheat to the total.