Face to Face with Kaiserism

by James W. Gerard

The king has a natural desire to take a prominent part in the negotiations for peace, but here again is dangerous ground for him. He should be given a part, if possible, in the preliminaries of peace, but while I believe that he sympathises with one of the Entente countries, the Allies are forced to recognise the fact of which he himself reminded me, that he is not only King of Spain, but Archduke of one of the Central Empires, the son of an Austrian Archduchess.

The king told me that he was most desirous that American capital should become interested in the development of Spain. He did not tell me the reason for this desire but perhaps he fears that if German capital should take a great part in the development of industrial Spain that the tentacles of the German propaganda and spy system which go hand in hand with her commercial invaders would wrap themselves around the commercial, social and political life of Spain.

Perhaps King Alfonso, when he wishes capital other than German to become interested in Spain, is thinking of the occurrences of 1885, when Spain and Germany so nearly clashed. In that year the crew of a German warship hoisted the flag of the German Empire on the island of Yap, one of the Carolina group, an island long claimed by Spain. The act so stirred the people of Spain that a great meeting was held in Madrid, attended by over one hundred thousand people. Later the mob attacked the German Embassy and Consulate, tore down the shield and flag staff of the Consulate and burned them in the principal square of Madrid. In the end, Spain was compelled to humbly apologise to Germany for the insult to the German Ambassador.

Some years before the war the King sent to this country a special emissary to interest American capital in Spain. Means of transportation are very meagre. Great mineral districts are as yet undeveloped and many other opportunities for foreign capital present themselves.

I asked the Spaniards why Spain was not developed by Spanish capital and they told me that the rich put all their money in government bonds and lived as gaily as possible on the interest.

Our own Government, whether Democratic or Republican, must always be careful to see that taxes are not so high as to prevent the naturally enterprising American from risking part of his capital in new ventures and such protection must be given to American citizens that they will continue to try their luck at business in foreign countries for the immediate benefit, of course, of themselves, but also for the commercial supremacy of the United States.

The American who goes to Mexico and there develops a railroad or a plantation, a commercial business, a bank or a mine, is not only adding to the wealth of Mexico, but any money which he makes after paying his due share of taxes there, is brought back by him to the United States, is subject to taxation, and by just so much not only lightens the tax burden of other Americans, but adds to the power in trade of the whole country.

A business man who is taxed too much on any profits that he makes will, like the Spaniard, invest his capital in Government bonds. He will stop taking up new enterprises because if he loses no one compensates him for his loss, while if he wins most of his profit is taken in taxes by the State.

I do not think that the Spanish harbour any spirit of revenge against us because of the events of the Spanish-American war. There was nothing in that war to arouse particular resentment. No one used poison gas, or enslaved women or cut off the hands of babies. On our side, at least, there was an intense admiration for the splendid, chivalrous bravery of our enemies. Spain was, in reality, benefited by the loss of Cuba and the Philippines; in fact, they were practically lost to her before we entered the war. Thinking Spaniards believe the war with America benefited Spain; and the lower classes rejoice because their sons and husbands are not forced to serve in the Spanish Army in the fever-laden swamps of the tropics.

On the war Spain is hopelessly divided: Conservative, against Conservative; Liberal, against Liberal. The usual German propaganda is furiously at work, all the paraphernalia, bought newspapers—bribes. Roman Catholic prejudice against former French Governments is a great stumbling block in the way of the Allies in Spain, for that country became the refuge of many orders and priests driven from France. Many of the Spanish Catholics still resent the action of previous French Governments towards the Catholic Church.