No doubt this assertion of a complete opposition between British and German commerce and investment contains an element of exaggeration. In 1913 England was the greatest consumer of German goods and Germany an excellent customer of Great Britain and the British colonies. If Germany were to be extinguished, Englishmen would be poorer, not richer. Yet the competition between German bagman and English pedlar is real, and this commercial competition is merely an expression of a far more significant industrial competition. As German organisation, science, and technical ability build up iron, steel, machinery, chemical and other industries, British industry, though still growing, finds itself circumscribed. If national colonies can be utilised for special national advantage, financial, industrial or commercial, the attempt will be made. If trade and investment can be made to follow the flag, the nation has an interest in securing colonies.
There is always a certain presumption that colonials, partly from tradition, and partly from commercial patriotism, will deal with their home country. The merchant in British colonies is familiar with British firms and trademarks and rather resents the necessity of becoming acquainted with foreign wares and the standing of foreign merchants. Prices being equal, we patronise the people we know and like. Investment also leads to trade. The Englishmen who control the vast resources of India, tend, without compulsion, to buy of British merchants. The possession of even a free-trade colony often insures the retention of its most profitable commerce.
It is true that this presumption in favour of the home nation may be overborne. Lower prices, better service, a more active and intelligent business propaganda may divert trade to foreign merchants. Before the war, German manufacturers found an increasing market in British colonies, overcoming colonial prejudice as they overcame the prejudice in Great Britain itself. Geographical nearness is even more decisive. Thus Canada is economically far more closely bound to the United States than to England. In 1913-14 we sold Canada $3.11 worth of goods for every dollar sold by the United Kingdom.[[2]] To Jamaica our exports exceeded those of the United Kingdom, while our imports from the island were over three times as great as the British imports.[[3]] The United States profits far more immediately from the economic development of Canada and Jamaica than does the United Kingdom.[[4]]
In the main, however, even under free trade, subtle influences are constantly at work to bring the colony into closer commercial relations with the home country. Thus in 1913-14, 64 per cent. of the imports of British India came from the United Kingdom, and other British dependencies showed a similar preponderance of trade with Great Britain.[[5]] The volume of the entire traffic between the home country and its colonies is overwhelming. In 1914, the United Kingdom imported from British possessions no less than £205,173,000, or over 29 per cent. of its total imports, and exported to these British possessions £179,350,000 or almost 42 per cent. of its total exports (of British produce).[[6]] This trade, which is increasing faster than the total trade of the United Kingdom, is peculiarly valuable. From her overseas dominions Great Britain secures a far larger proportion of food products and raw materials than from foreign countries, and to these overseas dominions she sends a large proportion of manufactured goods, containing a high percentage of labour. Thus, says Prof. Reinsch,[[7]] "From the point of view of the development and prosperity of national industry it is important that the exports of the nation should be composed largely of manufactured goods, the value of which includes as high as possible an amount of labour cost. The export of raw material, of coal, of food materials, and of machinery used in factories, cannot be considered of the highest advantage to the industrial life of a manufacturing country, nor is it most profitable from a national point of view to furnish foreign countries with ships, which help to build up their merchant marines." But according to the figures of 1903 "only 10 per cent. of the exports of British goods to the colonies consist of those commodities which the national industry derives relatively the least profit from, while for foreign countries the figure is 27 per cent."[[8]]
The general colonial trend has been in the direction of deliberately securing by legislative means a preferential advantage for the home country. "France," writes Dr. Wilhelm Solf, former German Secretary of State for the Colonies, "has assimilated Algeria and a portion of her colonies from the point of view of customs. She regards them almost completely as within her tariff boundaries, which fact gives French commerce the advantage over that of other nations trading with these colonies. In regard to her other colonies France has introduced preferential tariffs favouring the motherland, and reciprocally the colonies, which amount to as much as 85 per cent. of the normal duties. In Tunis, likewise, France has favoured her own trade in important lines, such as grain, by admitting them free of duty when carried in French bottoms. Portugal has introduced discriminating customs rates up to 90 per cent. of the regular tariff in favour of her own colonial shipping. Spain has acted similarly. England also enjoys tariff advantages as high as 33 per cent. of the normal rate in her self-governing colonies. She has in this manner secured for British industry a market which, without this preference, she would not have been able to maintain to the same degree. Likewise, the United States has to a large extent assimilated its colonies in customs matters. Belgium has, it is true, no preferential tariff, but by means of her extensive system of concessions she has practically precluded the competition of other states and secured a monopoly in the trade with her own colonies."[[9]]
No such colonial preference amounts to a complete exclusion of the trade of competitors. The Germans, not the English, are the chief purchasers of India cotton, and from the German colonies, diamonds go chiefly to Antwerp, West African copper to the United States and Belgium, and East African skins and hemp to North America. In many colonies and dependencies a complete legal equality of trade is maintained. On the whole, however, whether as a result of tariffs or of quiet discrimination by local authorities, the foreign merchant finds obstacles placed in his way and the trade goes to the home country. Thus in 1914, of Algerian imports 84 per cent. came from France, while of her exports 79 per cent. went to France.[[10]] The trade of all the other French colonies and dependencies tends also to go to France. Thus of the import of all French colonies and dependencies (exclusive of Algeria and Tunis) 45 per cent. in 1913 came from France and French colonies, while of the exports 42 per cent. went to France and French colonies.[[11]] Similarly in 1909 of the entire import and export trade of German colonies (exclusive of Kiau-Chau), 65.3 per cent. were with Germany.[[12]]
To the citizens of the home country go also the investment opportunities, the chances to secure concessions for mines, railroads and tramways. The legal right to these lucrative monopolies inheres in the nation that develops the backward country. This preferred position, this assured possession of a sole and undivided privilege is of the essence of imperialism. All the economic arguments for peace based upon the theory that trade heals enmities, shatter upon this fact. Free traders never tire of insisting that trade is reciprocally advantageous, blessing him who sells and him who buys; that the more trade there is, the more there is to get. They argue that England, Germany, America and Japan might continue until the end of time amicably exporting pianos and gingham aprons to the backward peoples, and receive in return unimaginable quantities of sugar, rubber and tobacco. But modern imperialism, extending its dominion ever further, is dreaming not alone of this field for competitive selling, but of concessions, monopolies, exclusive privileges, immensely lucrative pre-emptions. There are whole worlds to exploit, and whoever rules garners. When France extends her sway over North Africa and develops these lands, the valuable concessions go to French corporations. The actual capital used comes in last analysis from the great capital fund of Western Europe, from French, English, Belgian, Dutch and German capitalists, and whoever wishes to make four or five per cent. may lend his money to the banks that lend to the development companies that invest in the new country. But the big profit—the cream—does not go to these petty ultimate investors but to the political and high finance promoters, and these are French if the enterprise is French. Moreover, trade accompanies and follows investment, and if France secures control, the imported locomotives, rails, cars and mining machinery come from France. In Morocco, France keeps the inside track, as does England in Egypt and India, and Germany in Togo and East Africa. Let who will pick up the scraps.[[13]]