GERMANY AND ITALIAN FINANCE
It was in congruity with those principles and methods that the Banca
Commerciale, which had its headquarters in Milan, set itself to
discharge the complex functions of a financial, industrial, commercial
and political agency of German interpenetration in Italy.
To German customers and those Italians who imported German goods, the
Banca Commerciale allowed long credits and easy means of payment. To
all who were in need of implements, machinery, or materials for a new
enterprise, the bank "recommended" German houses, and those who were
wise construed the "recommendation" as an ultimatum. For if it was
ignored, their names were inscribed on the black books of the bank,
and by means of an efficacious system of secret dossiers, handled by a
confidential information bureau,[8] they found themselves thrust into
a "credit vacuum," boycotted by finance and condemned to bankruptcy.
All banks shunned them. Their bonds became mere scraps of paper.
Every enterprise to which they set their hands was blighted, and
nothing remained for them but to abandon their avocations or surrender
at discretion.
[8] This secret information bureau is everywhere a potent
engine of attack in German hands. It renders deliberate
libellers and defamers immune against the action of the law.
The victims feel the effects but cannot point to the cause.
The _fiches_, as the certificates are called, are couched in
conventional terms and bear no signature. In the case of
persons whom the bank desires to ruin, these documents are
sentences of commercial death.
But besides this executive of destruction there was another and still
more important board, whose work was wholly constructive. It was
commonly known as the "service of information." Its functions were to
collect at first hand all useful data about Italian commerce and
industry, to draw up tabulated reports for the use of Germans at home
engaged in trade and industry. These lists indicated current prices,
the qualities of the goods in demand, the favourite ways of packing
and consigning these, samples of manufactures, statistics of
production, the addresses of all firms dealing with Italians--in a
word, every kind of data calculated to enable German trade and
industry to compete successfully with their rivals. The manner in
which this body of information was drawn up, sifted, classified, and
made accessible, deserves unstinted admiration. To say that commercial
espionage was practised largely in the working of this comprehensive
system is but another way of stating that it was German.
The Banca Commerciale, which was the head and centre of this
organization, was, as a matter of course, called Italian. For every
similar institution, commercial, journalistic or other, which has for
its object the realization of the Teutonic plan of internationalization,
invariably wears the mask of the nationality of the country in which
it operates. And in this case the mask was supplied by Italians, on
whom the bank bestowed all the highest _honorary_ posts, while
reserving the influential ones for Germans and Austrians. Thus the
moving spirits of this vast organization were Herrn Joel, Weil and
Toeplitz, men of uncommon business capacity, who devoted all their
time and energies to the attainment of the end in view. And their
zeal, industry and ingenuity were rewarded by substantial results,
which have left an abiding mark on Italian politics and entered for a
great deal into the attitude of the nation towards the two groups of
belligerents. In a relatively short span of time foreign competition
in Italian markets was checked, German products ousted those of their
rivals, and at last the very sources of Italy's economic life were in
the hands of the Teuton, whose continued goodwill became almost a
vital necessity to the struggling nation.
Already in the year 1912 Germany stood first among Italy's customers,
whether we consider the list of her exports or that of imports. Italy
bought from that empire goods valued at 626,300,000 francs, and sold
it produce worth 328,200,000 francs; whereas Great Britain, who
supplies Italy with the bulk of her coal, exported only 577,100,000
francs worth, while her imports were valued at 264,400,000 francs. For
France the figures were 289,600,000 and 222,600,000 francs
respectively.
The method by which Italian industries were assailed, shaken, and then
purchased and controlled by this redoubtable organization, bore, as we
saw, all the marks of German commercial ethics. Sharp practice which
recognizes as its only limitation the strong arm of the penal law, is
a fair description of the plan of campaign. Against this insidious
process none of the native enterprises had the strength to offer
effective resistance. One by one they were drawn into the vast net
woven by the three German Fates--Joel, Weil and Toeplitz. The various
iron, mechanical and shipbuilding works, which represented the germs
from which native industries were to grow, were sucked into the Teuton
maelstrom. The larger and the smaller steamship navigation companies
likewise fell under the direction of the Banca Commerciale, which
permitted some of them to exist and even to thrive up to a certain
point, beyond which their usefulness to the general plan would have
turned to harm. In this way Italy's entire mercantile marine became
one of the numerous levers in the hands of the interpenetrating
German. And the importance of this lever for political purposes can
neither be gainsaid nor easily overstated.
In every little town and village which sends a quota of emigrants to
the transatlantic liners, agents of the various steamship companies
are always about and active. Being intelligent and enterprising, their
influence on local politics is irresistible, and it was uniformly
employed in those interests which it was the object of the Banca
Commerciale to further. "This institution," writes an Italian expert,
who has studied the subject with unusual care, "being the mistress of
the dominant economic organisms of the nation, makes use of them to
carry out a germanophile policy. It employs them for the purpose of
exercising a directive action in all elections, commercial, provincial
and general. Every servant of a steamship navigation company, every
purveyor of emigrants is at the same time and by the very force of
things an electoral agent. The position of arbitress and mistress of
the steamship companies carries with it possession of the keys of the
national wealth, and is consequently a formidable weapon of aggressive
competition against all industries, Italian and foreign, which are not
affiliated to those of Germany. The Banca Commerciale, having obtained
that supremacy, forced the Italian companies to lead a languishing
existence in straitened circumstances, whereas they might easily have
grown rich and flourishing. It permits our steamship companies to
subsist and even to earn somewhat, but only just enough to suffice for
the declaration of a modest dividend. That is why Italian navigation
companies levy such excessive rates of freight, why their service is
not organized in accordance with rational and latter day standards,
why they take no thought of winning foreign markets or of national
expansion.[9] They have no means of consigning merchandise at the
domicile, so that the consignees are put to enormous expense for
collection and delivery. And to make matters still worse, Italian
navigation companies are bound with those of Germany by special secret
conventions, which oblige them to abandon to their rivals certain
kinds of merchandise of the Near and the Far East."
[9] Cf. Preziosi, _La Germania a la Conquista dell' Italia_,
p. 57 fol.
If we examine the peculiarly Teuton ways of trade competition in their
everyday guise, and without the glamour of political ideals to
distract our attention, we are confronted with phenomena of a
repulsive character. For the German's keen practical sense, his
sustained concentration of effort on the furtherance of material
interests, and his scorn of ethical restraints render him a formidable
competitor in pacific pursuits and a dangerous enemy in war. His
moral sense is not so much dulled by experience as warped by
education. It may be likened to a clock which has not stopped but
shows the wrong hour. He has been taught that there are times and
circumstances when religious and ethical standards may or must be set
aside, and he arrogates to himself the right of determining them.
Without examining into stories of preternatural meanness and perfidy
which have come into vogue since the outbreak of the war, it is fair
to say that dirty tricks, destructive of all social intercourse,
formed part of the German commercial procedure in France, Britain and
Russia, the only proviso being that they were not penalized by the
criminal law of the country.
An amusing but nowise edifying instance turns upon Paris fashions.
That Berlin, like Vienna, should seek to vie with Paris in setting the
fashion of feminine finery to the world is conceivable and legitimate.
But that Germans should compete with Paris in Paris fashions connotes
a psychological frame of mind which is better understood by the
inmates of a prison than by a mercantile community. American ladies
visiting the French capital to order their gowns are astonished to
note that no fashions really new have been shown to them in the great
Paris houses. They had just seen them all in the German capital. And
the Paris models destined to be placed on the market next season turn
out to be identical with those which the fair visitors had already
inspected in Berlin and could have purchased there at a much lower
price. How this could be is explained simply. A German merchant in
continuous relations with the staffs of the Paris firms clandestinely
obtains from some of the members for a high price the models which are
still being kept secret, has them copied in large numbers in Berlin
and sold at a cheap price. True, the German workmanship lacks the
dainty finish of the Paris article, but the difference is such as
appeals only to the eye of a connoisseur.
In Italy similar phenomena were observed frequently. A firm in
Florence celebrated for special types of wooden utensils which were
never successfully imitated elsewhere was ruined by commercial
espionage. One day the proprietor engaged the services of two foreign
workmen who laboured hard and steadily for some time and then
departed, to his great regret. Six months later Germany dumped on the
Italian markets the very same articles in vast quantities, and at a
price so low that the Italian firm could not hope to compete with
them. At first, indeed, the Florence house made a valiant stand
against the invasion, but had finally to give up the fight as
hopeless. Later on the proprietor learned that the two honest-looking
workmen were first-class German engineers, whose only objects in
entering his service were to acquaint themselves with his methods,
copy his models and then strangle his trade. And these objects they
achieved to their satisfaction.[10]
[10] _L'Invasione tedesca_, p. 147.
Thus, in order to strangle concerns that compete with them
successfully, the average German merchant sticks at nothing. His maxim
is, that in trade as in all forms of the struggle for existence,
necessity knows no law. And he is himself the judge of necessity. The
history of German industry in Italy is full of instructive examples
of this disdain of moral checks, but one will suffice as a type. It
turns upon the struggle which the Teuton invaders carried on against
the Italian iron industry, which for a while held its own against all
fair competition. In their own country, the German manufacturers sold
girders at L6 10_s._ the ton. The profits made at this price enabled
them to offer the same articles in Switzerland for L6, in Great
Britain for L5 3_s._ and in Italy for L3 15_s._ Now, as the cost of
production in Germany fluctuated between L4 5_s._ and L4 15_s._ per
ton, it is evident that the dead loss incurred by the German
manufacturers on Italian sales varied between 10_s._ and L1 per ton.
But this sacrifice was offered up cheerfully because its object was
the destruction of the growing iron industry of Northern Italy and the
clearing of the ground for a German monopoly.[11] The spirit that
animates the Teuton producer, in his capacity as rival, was clearly
embodied by one of the principal manufacturers of aniline dyes in
Frankfort, who remarked to an Italian business man: "I am ready to
sell at a dead loss for ten years running rather than lose the Italian
market, and if it were necessary I would give up for the purpose all
the profits I have made during the past ten years."[12] To contend
with any hope of success against men of this stamp, one should be
imbued with qualities resembling their own. And of such a commercial
equipment the business community of Great Britain have as yet shown no
tokens.
[11] _L'Invasione tedesca in Italia_, p. 149.
[12] _Op. cit._, p. 150.
In Italy the Banca Commerciale was wont to send to every firm, whether
it had or had not dealings with it, a tabulated list of questions to
be answered in writing. The ostensible object was to obtain
trustworthy materials to serve for the Annual Review of the economic
movement in the country published every year by the Bank. In reality
the ends achieved were far more important, as we may infer from the
use to which all such information in France was put. There the
well-known agency of Schimmelpfeng, which was in receipt of a
subvention from the German Chamber of Commerce, was a centre of secret
information respecting the solvency, the prospects, the debts and
assets of every firm in France, and its tabulated information about
French commerce and industry, together with all the knowledge that had
been secretly gleaned, was duly sent to Berlin.
Russians complain somewhat tardily of the prevalence of the same
system among themselves. "Every day," writes the _Novoye Vremya_,
"fresh details are leaking out respecting a certain German firm, ideal
in its resourcefulness, which succeeded in spreading a vast net over
all Russia. It has been satisfactorily established that Germans
occupied many responsible posts in the organization, and that
these[13] officials were subjects of the German Empire. At the head of
the entire business in Russia down to a recent date was also a German
subject." The kind of information gathered by the agents of the
company, "for business purposes," is clear from a circular issued by
the firm just a fortnight before the outbreak of the war.
[13] It is an American Company for the sale of certain
machines. The Russian organ mentions all the names. For my
purpose this is unnecessary. The curious may find them in the
_Novoye Vremya_ of 5/18 August, 1915.
THE FIRM OF XYZ
"Tula,
"5/18 July, 1914.
"_District Card for the Collectors of the Circuit._
"_Form N 246._
"We have forwarded you to-day a number of cards of the printed form N
246, which you are requested to have filled in at once and placed at
the head of form 490 of the corresponding district. We draw your
attention herewith to the necessity of enumerating on the first table
of form N 246 all the villages and other places of the circuit of each
district collector, whether or no they contain debtors of ours, and of
stating in the second table the number of inhabitants. The
registration is to be done by the official charged with that part of
the work: each circuit is to be entered separately and the villages
and places it contains to be given in alphabetical order. These lists
are to be verified every six months and fresh information set out
respecting the growing number of our debtors. We request you to take
this work in hand at once and without delay.
"THE CONTROL DEPARTMENT, TULA."
When this circular was published in Moscow the general director of the
firm wrote to certain provincial newspapers pointing out that the
company is American, not German. "It is curious," a Russian journal
remarks, "that an American firm should need a map containing all the
villages and hamlets of the districts, with the number of their
inhabitants, irrespective of the presence there of the company's
debtors."[14]
[14] _Novoye Vremya_, 5/18 July, 1916.