Let me give you a simple case of the operations of that trade council. Ex uno disce omnes. A certain firm had a fairly profitable monopoly in a chemical product which it had maintained for many years. It was not a patented article, but one for which the firm had discovered a good process of manufacture. About six years ago this firm found that its Liverpool custom was being transferred to German makers. On inquiry, it transpired that the freight on this particular article from Hamburg to Liverpool had been lowered. The firm considered its position, and by introducing economies it found that it could still compete at a profit. A year later German manufacturers lowered the price substantially, so that the English firm could not sell without making a dead loss. It transpired that the lowering of price was due to a heavy export bounty being paid to the German manufacturers by the German State.
It is the bringing of the heavy machinery of State to bear on the minutiæ of commerce which makes it impossible to compete with such methods. One article after another is attacked, as opportunity offers; British manufacture is killed; and Germany acquires a monopoly. No trade is safe; its turn may not have come.
Much has been said about British manufacture of dyestuffs, and much nonsense has been written about the lack of young British chemists to help in their manufacture. There is no lack of able inventive young British chemists. Owing to the unfairness of German competition by methods just exemplified, a manufacturer, as a rule, does not care to risk capital in the payment of a number of chemists for making "fine chemicals." He finds "heavy chemicals" simpler. I do not wonder at his decision, though I lament it. There are also other reasons. The duty on methyl alcohol (for which no rebate is given) makes it impossible to introduce economically methyl groups into dyes; the restrictions incident on the use of duty-free alcohol do not commend themselves to manufacturers; these constitute other obstacles in the way of the British color maker. Lastly, our patent regulations are even yet not what they might be, although an attempt has recently been made to improve them. The British manufacturer is thus trebly handicapped.
Besides, the English competitor is at a disadvantage owing to what may be termed systematic and fraudulent attacks, for which no redress has been obtainable. Thus the manufacturers of Sheffield still complain, I suppose justly, that German articles for foreign consumption bear the words "Sheffield steel" stamped upon them. I myself have been approached by a German swindler with the proposition that I should assist his firm in infringing patents; he was surprised and pained to learn that I did not consider his proposal an honorable one.
Nor are methods like these confined to business or manufacture; they have greatly affected British shipping. Our shipping companies, in good faith, have associated themselves with others in "conferences," apparently for the mutual advantage of all, forgetting that behind the German companies lay the powerful mass of the German State. Tramp steamers, and with them cheap freights to the East, have been eliminated. The Royal Commission on Shipping Rings, which met some years ago, referring to the system obtaining in Germany, and fostered by the German Government, on charging through rates on goods from towns in the interior to the port of destination, observed in its report: "Such rates constitute a direct subsidy to the export trade of German manufacturers, and an indirect subsidy to those German lines by whom alone they are available. And as they are only rendered possible by the action of the German Government, it appears to us that the British lines can in no way be held responsible for the preferences which these rates afford to German goods." Now, our Government pays large mail subsidies to many of our shipping companies. Could these not be so utilized that it would become impossible for Germans to capture our trade by indirect state bounties?
These are a few examples (and your greater knowledge will enable you to supplement them with many others) of the methods which have been employed against us by Germans with the co-operation—nay, the active support—of their State.
Of late a new factor has appeared. The German Imperial Chancellor made his noteworthy (or notorious) remark about a "scrap of paper." And Dr. von Bethmann-Hollweg, speaking in the Reichstag, acknowledged openly that the German Nation had been guilty of a "wrong" to Belgium. This breach of faith has the approval of the whole German people. Do they realize what it means? Are they not aware that no treaty, political or otherwise, with the German people is worth the paper it is written on? That the country and its inhabitants have forfeited all claims to trust? That no one, in future, should make a bargain with a German, knowing that he is a dishonorable and dishonored man?... Germany has made many blunders—an almost inconceivable number of blunders; but this blundering crime is surely the culminating point of blunder. Did any nation ever before deliberately throw away its political, commercial, financial, and social credit to no purpose? To gain what? England as an adversary, and the contempt of the whole civilized world. Her treatment of the poor Belgian civilians has added to contempt, loathing and scorn.
Now, gentlemen, you see our problem. At, the end of this war we shall have Germans again as trade rivals; if there is a German State our German rivals will be backed by their State. They will, as they have done before, steal our inventions, use trickery and fraud to oust us from world markets, and we know now that we need not expect any bargain to be binding. I am not a commercial man; science is supposed to be above such trickery. Yet I read a few days ago, not as a single example, but only as the last I happen to remember, an article by a distinguished American professor, protesting with great moderation that an important scientific generalization which he published in 1902 had been annexed, without acknowledgment, by a versatile and adroit professor in the University of Berlin—an acquaintance of my own—in the year 1906; and it was not until 1910 that the latter was made to confess his guilt, with much subterfuge and blustering.
Commerce, indeed, is in Germany regarded as war; we now know it, and we must meet war by war. How is that war to be waged?
I can see only two methods. One is recommended by a writer in The Observer of the 10th inst., who acknowledges himself to have been a lifelong free trader. His remedy is a 25 per cent. duty on all German goods, and on German goods only, imported (or rather offered for import) into Great Britain and her colonies, and also that German passenger liners and freight boats should not be allowed to call at any one of the ports of the empire. His reasons are fully stated in his letter; it is signed "A City Merchant."