1. The transport of goods and people.
2. The financing of such transactions through bills of exchange, and the like.
3. The insuring of trading ventures.
The people which succeeded in obtaining the carrying trade quite generally secured the banking and insurance business, both of which until recent years, have been principally concerned with trading.
The trade of the middle ages was small in volume, and was carried on, for the most part, in valuable commodities, since the cost of transporting bulky, cheap articles was generally prohibitive. With the emergence of modern industry, and its production of large amounts of surplus commodities, important industrial groups like Britain and Germany which depended for their prosperity on their ability to find foreign markets for their surplus commodities, have been driven to a fierce struggle for these markets.
Latterly the effort to dispose of surplus has taken a new form—the investment of capital in foreign enterprises. Instead of trying to sell an electrical plant to the city of Buenos Aires, a German business adventurer (enterpriser) secures a contract to build the plant, buys the equipment from the German General Electric Company, takes the bonds of the City of Buenos Aires in payment for the plant, and finances the transaction by selling the bonds to a German banking syndicate. Through this process, the German (or Belgian, or British) business world invests its funds in "undeveloped" countries.
At the outbreak of the World War, foreign investment had become a science, with the British leading all of the investing nations. C.K. Hobson, in his book, "The Export of Capital," and in a later article in the "Annals of the American Academy" for November, 1916, throws some important side-lights on British foreign investments. He notes that for some years preceding the war, Britain had never invested less than 500 millions of dollars per year in foreign countries and that just before the outbreak of the war, the annual export of capital had reached a total of a billion dollars per year. In 1913 the British foreign investments were approximately 20 billions of dollars, distributed geographically in a most significant fashion. The largest investment (3,750 millions of dollars) was in the United States; then came Canada with 2,500 millions; following were India, 1,800 millions, South Africa, the same amount, Australia, 1,500 millions, and Argentina a like sum. The British investments in Belgium, France, Germany and Austria were negligible. Thus it was in the new and undeveloped countries, not in the old and developed ones that Britain sought her investment opportunities. In their efforts to play at this great game of imperialism, and to win their share of profitable business, Germany, France, Japan, Belgium and the United States were dogging the British heels.
Each of the important producing countries must provide itself with the essential raw materials—coal, iron, copper, cotton, rubber, wheat, etc., upon which the continuance of its industrial life depends. Consequently each of these countries busies itself to secure the control of the largest possible reserves of the raw materials most needed by its own industries.
The case of petroleum is peculiarly instructive. When it became apparent, in the early years of the present century that oil burning ships, motor vehicles and air craft were bound to play a determining part in the economic life of the immediate future, various interests such as the Shell Transport, Royal Dutch and the Standard Oil, with the open or tacit backing of their respective state departments, entered on a campaign to secure the world's supply of petroleum. In Mexico, Central America, the Near East, Russia and the United States this struggle has been waged, and it still continues to be one of the most active contests for economic power that has been fought in recent times.
Petroleum-hunger is only one of the many economic factors that drive modern nations. The efforts to control the coal and iron of Alsace and Lorraine, the Saar and the Ruhr undoubtedly played a leading rôle in making the War of 1914 and the Peace of 1919. The partition of Upper Silesia was based on the same contest for iron and coal. Wherever the coal veins or iron deposits are, there, likewise, are gathered together the representatives of industrial enterprise, which depends for its life upon iron and coal.