GERMANY AND RUSSIA
Turning to our other ally, Russia, we find that she underwent a course
of treatment similar to that which well-nigh prussianized Italy. In
the Tsardom the task was especially easy owing largely to the
advantages offered to Teutonic immigrants from the days of yore, to
the German-speaking inhabitants of the Baltic provinces, to the
proselytizing German schools which flourish in Petrograd, Moscow,
Odessa, Kieff, Saratoff, Simbirsk, Tiflis, Warsaw and other centres,
to German colonies scattered over Russia and to religious sects.
During the Manchurian campaign the Commercial Treaty drafted in
Berlin, and at first denounced by Count Witte as ruinous to his
country, was agreed to and signed.[31] It was Hobson's choice. After
that the empire, which had already been a favourite and fruitful field
for Germany's experiments, became one of the most copious sources of
her national prosperity. Commercial push and political espionage were
so thoroughly fused that no line of demarcation remained visible.
[31] In June 1904.
Russia's losses were proportionate and at the time were computed at
35,000,000 marks a year. In the Tsardom the imposition of this tribute
was resented. By the Teutons their economic victory was followed by
political influence. Their agents and spies abounded everywhere. Time
passed, and as relations between the two empires grew tenser, the
danger defined itself in sharper outline to the eyes of Russian
statesmen, who resolved, however, to postpone remedial measures until
the day should come for the discussion of the renewal of the
Commercial Treaty. The knowledge that Russia would refuse either to
prolong that one-sided arrangement or to make another like it, and
that the consequences of this refusal would be disastrous to Germany's
economic and financial position, stimulated German statesmen to bring
matters to a head before Russia could back her recalcitrance with a
reorganized army, and was one of the contributory causes of the
European struggle.
Since then the war has flashed a brilliant light on the dark places of
German intrigue, and some of the sights revealed are hardly credible.
Whithersoever one turns one is confronted with the same striking
phenomenon; the preponderant influence wielded in almost every walk of
life, private and public, by institutions and individuals who in some
open or clandestine way are under German tutelage. In the sphere of
economics this is particularly noticeable. Three-fourths of Russia's
foreign trade was in German hands. Dealings between Russians and
foreigners were transacted chiefly through Germany. Imports and
exports passed principally through German offices, established
throughout the length and breadth of the Tsardom, and commercial
dealings were conducted by merchants in Berlin, Hamburg, Koenigsberg,
Leipzig, and other centres of the Fatherland. Merchandise was carried
in and out of the country by German railway lines, or to German ports
in German bottoms. Even American cotton and Australian wool and tallow
were disposed of in Russia by German middlemen who had them conveyed
in German steamers. On the other hand, Russian corn, sugar, spirits,
were taken to Europe by German transport firms. Intending Russian
emigrants were sought out by agents of German steamship companies,
sent to German ports and accommodated on German steamers. In brief,
whenever the Tsar's subjects had anything to sell to the foreigner or
to buy from him, their first step was to go in search of a German,
through whom the sale or purchase might be effected.
In domestic economics the same phenomenon was everywhere noticeable.
To a Russian's success in almost any commercial or industrial venture,
the co-operation of the German was an indispensable condition.
Individual enterprise might sow and governmental legislation might
water, but it was German goodwill that vouchsafed the fruit. Wherever
Russian industry showed its head, Germans flocked thither to take the
concern in hand, regulate its growth, and co-ordinate its effects with
those of other industries which were under the patronage of German
banks. It was in vain that Witte and his fellow workers threw up
barriers that seemed impassable to German enterprise. They were turned
with ease and rapidity. Thus in order to protect the textile
industries of Moscow, prohibitive tariffs were levied on textile
fabrics of German origin. But the irrepressible Teuton crossed the
frontier, established his factories in Poland, founded the
German-Jewish town of Lodz, and snapped his fingers at the Government
of the Tsar. And forthwith Lodz assumed all the characteristics of a
German city. German schools flourished there, German agents abounded,
German became the recognized language, and permission was at one time
given to German reserves there, to undergo their periodic term of
military drill for the Kaiser's army!
Of the three Entente Powers challenged by Germany in 1914, Russia was
therefore by far the worst equipped for the unwonted effort which the
European War demanded of each. For her liberty of action, and, in some
cases, even her liberty of choice, was hampered by the financial,
economic, and political network which Germany had slowly and almost
imperceptibly woven over the entire population. In the fine meshes of
this net several organs of national life were caught, immobilized and
connected with the Fatherland. And it was not until they strove to
move and discharge their functions on behalf of the Russian nation
that they became fully conscious of their plight. German intrigue and
subterranean scheming, under the mask of sympathy--now for the
autocracy, now for socialism--had effected far-reaching changes in the
Empire, which few even among observant politicians appear to have
realized. These innovations were embodied in the thraldom of Russian
banks to German financial institutions; in the splendid organization
which kept old German colonies that were scattered over the Empire in
touch with each other, and co-ordinated their action; in the eloquent
Russian advocates and influential dignitaries who contributed to the
furtherance of German ideas and interests and swayed the policy of
the State; and in the dependence of the great Russian Empire on its
enemy for munitions, and almost every other technical necessary of
war.
From the days of the great Peter this Teuton influence had been
creeping imperceptibly over the Slav race like some cancerous
soul-growth. It infused a subtle poison in the State organism, the
most appalling effects of which are only now assuming visible shape.
Two palace revolutions were brought about by a national reaction
against the predominance of this foreign influence, which was resented
by the people not merely because it was alien, but largely also
because of its unscrupulous and ruthless character. Some of the most
atrocious cruelties which students of Russian history associate with
court and political life in the Tsardom, during the best part of two
centuries, had their sources in the sheer malignity of Teuton
Ministers who spoke and acted in the name of the autocrat of the
moment. It is characteristic that the Minister Muennich, in the school
for officers which he founded in Petersburg, had Russian history
eliminated from the programme as superfluous, German history being
allowed to remain; and that out of 255 students, only eighteen studied
the Russian language, whereas 237 applied themselves to German. The
first Sovereign to rebel against this Teuton supremacy in his Empire
was the late Alexander III., who made no secret of his profound
dislike for German ways. But as the Russian proverb has it, "one man
in the field, is not a soldier." Hercules, to cleanse the Augean
stables, had need of the water of a river, and the anti-German Tsar
could not hope to make headway without the co-operation of his army of
officials, who themselves were permeated with the Teutonic spirit. And
as passive resistance was their attitude, his purging scheme was
abortive. As a matter of cool calculation, the only hope of freeing
Russia from the meshes of the German net was a war between the two
peoples. And all radical legislation had therefore to be postponed.
In the meanwhile the Germans, having organized and primed their
agents, have been teutonizing Russia cunningly and effectively. With
the precious assistance of their own kith and kin settled in the
Baltic provinces and elsewhere, they employed the never-failing
expedient of taking an active and, when possible, a leading part in
domestic Russian politics, and invariably on both sides. At the Court
they have always been well represented, and in the ranks of the
inarticulate and Parliamentary Opposition they have also been playing
a noteworthy part. In factories and other industrial and commercial
institutions they arranged strikes, called indignation meetings and
hatched conspiracies at critical junctures when it was to Germany's
interest that Russia's attention should be riveted upon home affairs.
No Parliamentary Bill could be privately drafted, no railway scheme
could be secretly discussed, no Ministerial measure could be
canvassed; nay, seldom could a confidential report be drawn up to the
Emperor himself without the knowledge of the Berlin authorities and
the occasional intervention of their agents in Petrograd. It is
interesting to note that in 1914 a secret memorandum of a highly
confidential character, from a statesman to the Tsar, found its way
to Berlin soon after it had been presented to the monarch and had a
certain influence on the decisions which led to the war.
The work of economic interpenetration carried on under the aegis of
such powerful patrons and resourceful coadjutors was greatly
facilitated by the German colonies scattered over Russia for
generations. Many of these foreigners had been invited by Catherine
II., receiving large grants of land and various privileges which
enabled them to flourish at the expense of the native population, on
which they looked down with open contempt.
At that time the extent of free land was considerable in Bessarabia,
Volhynia, and the provinces of Kherson, Ekaterinoslav, Saratoff and
Samara, where down to the year 1915 entire cantons were inhabited by
Germans. In the Novouzensky canton, for example, they constituted 40
per cent. of the population, in that of Berdyansk 17 per cent. and in
the Akkerman canton 14 per cent. The inducements which had been held
out to them to settle in these fertile districts were irresistible.
Each colonist received fifty dessiatines of land,[32] extensive
pastures for cattle, grants for the journey and the cost of stocking
his farm, absolute immunity from all taxes, rates and military
service, and complete local autonomy apart from that of the Russian
community.
[32] About 107 acres.
The Germans whom these boons attracted were of two categories:
sectarians (Menonites), who eschewed military service on religious
grounds; and ne'er-do-wells, who objected to the restraints of law and
justice in the Fatherland; besides a considerable percentage of
tramps. Most of the men of the second category fared as badly in their
adopted country as they had in their native land. They gave themselves
up to intemperance and kindred vices, and their descendants still lead
a hand-to-mouth existence in the Tsardom which their privileges alone
could not better. The sectarians, on the other hand, formed a compact
co-operative body, and by dint of persevering industry and shrewdness,
made the most of their favoured position and prospered. With their
common savings they purchased such vast tracts of land from the
neighbouring gentry that in time the Russian population was
constrained to emigrate to Siberia and other distant parts of the
Empire. And when the present conflict was unchained they were in
possession of an area of fertile land bigger than Pomerania, which is
one of the largest provinces of Prussia. In the Volga country alone
they owned 879,420 dessiatines, or, say, 1,884,471 acres! In the south
of Russia there are 519 German settlements, and the area they occupy
is estimated at more than 31,252 square versts.[33] And the land of
the country gentry in the neighbouring districts was fast passing into
their hands.[34] They have their own local government, their banks
which help them to acquire Russian land, their insurance companies and
their schools. In short, they were a compact little State within the
Tsardom.
[33] One square verst is equal to 0.44 square mile.
[34] Cf. _Novoye Vremya_, October 5, 1914.
The sectarians still hold aloof from the native population. Indeed,
almost the only relations in which they stand to Russians are those
of masters and agricultural labourers. They hire Russian peasants to
till their land and they compel them to work hard for small wages.
Many of these colonies have the appearance of little German towns.
They have added industrial pursuits to agricultural, possess flour
mills, timber mills, and plough their farms with German implements.
They are aggressively German in sentiment, language, character and
Kultur.
That in brief is the history of one type of German colonization in the
Tsardom. There is another at which it may not be amiss to cast a
glance. It is of recent date and consists of German elements already
resident in the Tsardom. It is a monument of Teuton audacity and Slav
forbearance. One might ransack the history of European nations without
finding another such instance of downright effrontery and disloyalty
on the part of a privileged section of the community, and of
easy-going toleration on the part of the State. The German elements of
the provinces of Kurland and Livland, subjects of the Tsar though they
are, resolved after the abortive revolution of 1906 to raise a living
wall against the rising tide of Russian influence. And as is the wont
of the Teuton throughout the world, they employed Russia's men and
Russia's money to achieve their anti-Russian object. This object was
to attract some twenty thousand Germans to the province, provide them
with farms on easy terms, and look to time, the industry of the men,
the fecundity of the women and the teachings of the schools to create
a new German State in that part of the Russian Empire. It was part of
the functions of these colonists, we are frankly told by their
historiographer,[35] "to serve, even as armed defenders" against the
Russians! In no other country on the globe is such a scheme
conceivable.
[35] His name is Dr. Fritz Wertheimer. His writings are to be
found in various periodicals. The essay from which these data
are taken was published in the _Frankfurter Zeitung_, January
8, 1916.
The undertaking was organized and carried out by two brothers,
Broedrich by name, in one of whom the Tsar's Government placed implicit
confidence and evinced it by appointing him to be chief of the police
in the canton of Goldingen. In this post of trust the German leader
was able to further the anti-Russian cause materially. And he utilized
his opportunities to the utmost for the purpose during the five years
of his tenure of office. He himself travelled in search of suitable
German colonists and had numerous agents on the look-out for such. He
finally got about 13,000 to settle in Kurland and 7000 in Livland. The
Kurlandische Kreditverein advanced the necessary capital as mortgagee
of the land, and within five or six years many of the colonists had
already paid off their debts, sold their farms to other Germans and
bought untilled land in the neighbourhood for themselves. The school
was responsible for the required standard of German patriotism. The
success of the experiment exceeded the highest expectations, and
to-day the man of confidence of the Tsar's Government, Karl Robert
Broedrich, is become chief of the local administration under Wilhelm
II., and deservedly enjoys the confidence of the Kaiser's Ministers.
This type of German invasion in Russia, especially in recent years,
was carried out with a supreme disdain of the laws of the Empire
which is equally characteristic of those who display and those who
tolerate it. In virtue of a law inscribed in the Statute Book on 14/26
March 1887, foreigners are not permitted to purchase or own land
outside the cities in the provinces of Kurland and Livland, whereas in
Esthland there is no such prohibition. Yet in Esthland only 6396
dessiatines belong to Germans, whereas in the two provinces whence
they are absolutely excluded Germans possess 36,852 dessiatines and
6396 dessiatines respectively! In the territory of the Don Cossacks no
foreigner may possess land under any circumstance, yet the Germans own
there 3700 dessiatines. Again, in the provinces of Podolia and
Volhynia, where, for State reasons, the ownership of land is allowed
only to Russians, Germans purchased and own 63,831 dessiatines in the
latter province and 12,475 in the former. Altogether the amount of
Russian territory which passed into the hands of the Teutons is
enormous. In July 1915, when the inventory was not yet completed, the
area inscribed had reached the total of 2,450,000 dessiatines or about
5,250,000 acres.[36] "This figure--" we are assured--"is still far
from complete, inasmuch as a large number of data from various
provinces have not been included in it, and there are no entries at
all for the three provinces of the kingdom of Poland where military
operations are going on and where unhappily the presence of German
colonists has been utilized by the German General Staff."[37]
[36] _Novoye Vremya_, July 2, 1915.
[37] By a law sanctioned by the Tsar, in February 1915, the
German Colonists of Southern and Western Russia were obliged
to sell their land to Russian subjects, and they received ten
months' grace for the purpose.
In Poland there were well over 500,000 German colonists, besides a
large number of new-comers, whose unwritten "privileges" included, as
we saw, occasional permission to their young men liable to serve a few
weeks annually in the ranks of the German army to discharge that duty
under German officers in Russian Poland! In the Ukraine and the most
fertile districts of the Volga basin hundreds of thousands of Germans
lived, throve, and upheld the traditions as well as the language of
the Fatherland, under the eyes of tolerant local authorities.
Hard by old Novgorod, the once famous Russian republic and cradle of
the Russian State, a number of German colonists settled some 150 years
ago. The population of two of these settlements numbers several
thousand souls, descendants of the original settlers, in the fourth
and fifth generation. They had had time enough, one would think,
during that century-and-a-half to assimilate Russian ways and to
acquire a thorough knowledge of the Russian tongue. Well, these
colonists do not speak the language of the country in which they and
their forbears have been living for over 150 years! They still
consider themselves German, and if you ask them who their sovereign is
they answer unhesitatingly--Kaiser Wilhelm! During Russia's recent
military reverses, which threatened for a time to culminate in the
capture of Riga, and possibly of Petrograd as well, these parasites in
the body politic of Russia displayed their joy in various unseemly
ways, which aroused the indignation of their Slav neighbours. In one
of their schools the Russian visiting authorities were received with
demonstrations of hostility. It is usual for the portrait of the
Russian Tsar to be set up in every school in the Empire. In one of
these educational establishments it was discovered in the lavatory
with the eyes gouged out.
Long before this war Berlin had become alive to the importance of
these colonies as factors in the work of pacific interpenetration and
political propaganda. Wandering teachers from the Fatherland were
accordingly sent among them to link them up with their brethren at
home, and fan the embers of patriotism which long residence in the
Tsardom had not quenched. Little by little, the political fruits of
these apostolic labours began to show themselves: the colonists, whose
main preoccupation had been to occupy the most fertile soil in the
district, began to take over the approaches to Russia's strategic
plans, and to display an absorbing interest in Russian politics.
Several Zemstvos fell into their hands, and were practically
controlled by them, and they contrived to gain considerable influence
in the elections to the Duma.
The chance of a useful part for these German colonies to perform
having thus unexpectedly arisen on the horizon, they seized it with
promptitude and utilized it with the thoroughness that characterizes
their race. The numbers prosperity, and influence of the colonies grew
rapidly. Land that had belonged to the Russian peasantry was taken
over by the foreign parasites, and while the Tsar's Minister, were
toiling and moiling to transport hundreds of thousands of Russian
husbandmen and their families in search of land beyond the Ural
Mountains to the virgin forests of Eastern Siberia, there in the very
heart of European Russia were hundreds of thousands of intruders,
who, with the help of their German Colonial banks, were acquiring
additional tracts of land from which their native owners had been
ousted.
I pointed out this anomaly over and over again, and long before the
war I described it in review articles. The well-known German
Professor, Hans Delbrueck, replied shortly afterwards, in the
_Contemporary Review_,[38] denying point-blank the truth of my
statements, which were drawn from official sources, and confirmed by
the evidence of my senses. For I had visited several of the colonies
in question. Besides these German settlements, there had also been a
number of German industrial and commercial establishments in the
Empire which, at first nowise harmful, were afterwards taken in hand
by emissaries from Berlin, linked up together, affiliated to one or
other of the great financial houses of Germany, and transformed into
redoubtable instruments of Teuton domination. Capital was subscribed,
syndicates were formed, railway-building and electro-technical
industries were organized, Russia's railways policy modified, and
metallurgical works were monopolized by the Germans. Here again
financial institutions discharged the functions of motive power. At
the beginning, about thirty million roubles were subscribed for the
creation of banks, and by dint of push, importunity, secret influence
and intrigue, these institutions received on deposit the savings of
the Russian peasant, merchant, landowner, and official, which finally
mounted up to several hundreds of millions. With this money they were
enabled to control the markets and constrain Russian institutions and
individuals to bow to their will.
[38] Cf. _Contemporary Review_, February 1911.
Contracts in Russia were appropriately drafted in the German language,
being directed to the promotion of German interests. Incipient and
even long-established Russian firms were either killed by unfair
competition or compelled to enter the syndicates and forego their
national character. Inventions and new appliances were tested,
plagiarized, and employed in the service of the Fatherland. And while
preparing for the war which was to set Germany above the
nations--_Deutschland ueber Alles_--these syndicates followed the
policy dictated from Berlin, sowed discord between Russian firms and
various State departments, organized strikes and paid the strikers in
competing establishments, and thus deprived the Russian State of
industrial organs on which it would necessarily have to rely in
war-time. To give but one example of this cleverly devised attack, the
cotton industry of the Tsardom was in the hands of the Germans when
war was declared. Another of the most important groups of Russian
industries is that of naphtha. When this precious liquid is dear, many
of the lesser works have to close; when it is cheap, even small
industrial enterprises are able to go on working. By way of obtaining
complete control of this vital element of Russia's industrial life,
the Deutsche Bank went to work to form a syndicate, had a number of
private wells bought up, united them in one, acquired numerous shares
in Russian oil companies, and had the manager of another German
bank--the well-known Disconto Gesellschaft--made a member of the Board
of the Russian Nobel Company.
One of the results of this ingenious deal was a sharp rise in the
prices of all the products and some of the by-products of naphtha. The
increase continued at an alarming rate, filling the pockets of the
German shareholders, whose syndicates received the oil at cost price
for their own consumption, while Russian firms were forced to acquire
it at the market value or to shut down their works. Amongst the worst
sufferers from these anti-Russian tactics were the steam-navigation
companies of the Volga, which had jealously warded off all attempts to
germanize them.
In conditions as restrictive as these, it is well-nigh impossible for
Russian industry to hold its own, much less prosper and grow. And only
the most vigorous and best-organized enterprises in the Empire, like
that of the Morozoffs in Moscow, managed to pursue their way
unscathed. In Russian Poland, where textile industries flourished, and
the total annual production was valued at 294,000,000 roubles, over
one-third of these industries belonged to the Germans, whose yearly
output amounted to more than one-half of the grand total, _i.e._, to
150,000,000 roubles.[39] In all these industrial and commercial
campaigns the German prime movers had carried out their operations
more or less openly. But where interests affecting the defences of the
Empire were concerned, caution was the first condition of success,
and, as usual, the Teutons proved supple and adaptable. By way of
levying an attack against the shipbuilding industry, they pushed shaky
Russian concerns into the foreground, while studiously keeping
themselves out of view. Thus in one case new Russian banks were
founded, and old ones in a state of decay were revived by means of
German capital and encouraged to form a syndicate with the
Nikolayeffsky shipbuilding works and certain foreign banks. An
official inquiry, presided over by Senator Neidhardt, lately revealed
the significant fact that each firm of this syndicate had bound itself
to demand identical prices for the construction of Russian ships, and
under no circumstances to abate an iota of the demand. And it was
further agreed that these prices _should be so calculated as to yield
to the members of the syndicate one hundred per cent. profit_.
[39] Cf. Duma debates of August 1914.
This allegation is not a mere inference, nor a rumour. It is an
established fact. Neither is the proof circumstantial; it consists of
the original agreement in writing signed by the authorized
representatives of the institutions concerned. The data were laid
before the members of the Russian Duma by A. N. Khvostoff.[40] Thus
the Russian peasant is taxed for the creation of a fleet, and the Duma
votes an initial credit of, say, 500,000,000 roubles for the purpose.
And if the shipbuilding companies and their financial bankers were
honest the aim could be achieved. But in the circumstances what it
comes to is that the nation must pay 500,000,000 more, in order to get
what it wants. And this tax of a hundred per cent. is levied by German
parasites on the Russian people. One might scrutinize the history of
corruption in every country of Europe without finding anything to beat
this Teutonic device, which at the same time gratified the cupidity of
the money-makers and dealt a stunning blow at the Russian State. Half
of the shares of the celebrated Putiloff munitions factory are said to
have belonged to the Austrian Skoda Works.
[40] Cf. _Novoye Vremya_, August 17, 1915.
At the outset of the present war, when Russia's needs were growing
greater and more pressing, the works controlled by Germans and
Germany's agents diminished their output steadily. In lieu of turning
out, say, 30,000 poods of iron they would produce only 5,000, and
offer instead of the remainder verbal explanations to the effect that
lack of fuel or damage to the machinery had caused the diminution.
Again, one of these ubiquitous banks buys a large amount of corn or
sugar, but instead of having it conveyed to the districts suffering
from a dearth of that commodity, deposits it in a safe place and
waits. In the meantime prices go up until they reach the prohibition
level. Then the bank sells its stores in small quantities. The people
suffer, murmur, and blame the Government. Nor is it only the average
man who thus complains. In the Duma the authorities have been severely
blamed for leaving the population to the mercy of those money-grubbers
whom German capital and Russian tribute are making rich. "Averse to go
to the root of the matter," one Deputy complained, "the Government
punishes a woman who, on the market sells a herring five copecks
dearer than the current price, yet at the same time it permits the
Governors to promulgate their own arbitrary laws regulating imports
and exports from their own provinces. In this way Russia is split up
into sixty different regions, each one of which pursues its own policy
unchecked."
The importance of the role played by the banks financed by German
capital in Russia can hardly be overstated. They advance money on the
crops and take railway and steamship invoices as guarantees--they are
centres of information respecting everybody who resides and everything
that goes on in the district and the province. I write with personal
knowledge of their working, for I watched it at close quarters in the
Volga district and the Caucasus with the assistance of an experienced
bank manager. Their political influence can be far-reaching, and the
services which they are enabled to render to the Fatherland are
appreciable. And they rendered them willingly. As extenders of
Germany's economic power in the Empire they merited uncommonly well of
their own kindred. Thus of Russia's total imports in the year 1910,
which were valued at 953,000,000 roubles, Germany alone contributed
goods computed at 440,000,000. These consisted mainly of raw cotton,
machinery, prepared skins, chemical products, and wool.
How steadily our rivals kept ousting the British out of Russian
markets by those means may be gathered from the following comparative
tables. The percentage of Russia's requirements supplied by the two
competing nations varied, during the fifteen years between 1898 and
1913, as follows--
_Year._ _Germany supplied._ _Britain supplied._
1898-1902 34.6 per cent. 18.6 per cent.
1903-1907 37.2 " 14.8 "
1908-1910 41.6 " 13.4 "
1911 45.4 " 12.2 "
1912 47.5 " 12.6 "
1913 49.6 " 13.3 "
In the year 1901 Germany supplied 31 per cent. of the total value of
Russia's imports; in 1905 her contribution was 42 per cent.; and the
increase went steadily forward, reaching over 50 per cent. in the year
1913. If we add to this the net profits of German industrial and
commercial undertakings in the Russian Empire, we may form a notion of
the appropriateness of the comparison which likened the Tsardom to a
vast German colony. The entire economic system of the country was
rapidly approaching the colonial type. And to these economic results
one should add the political.
It is fair to assume that at the outset the main motive of this
industrial invasion was the quest of commercial profit. Subconsciously
political objects may have been vaguely present to the minds of these
pioneers, as indeed they have ever been to the various categories of
German emigrants in every land, European and other. But in the first
instance the creation of German industries in Russia was part of a
deliberate plan to elude the heavy tariffs on manufactured goods. It
has been aptly described by an Italian publicist[41] as legal
contraband, and it supplies us with a striking example of German
enterprise and tenacity. It attained its object fully. About
three-fourths of the textile and metallurgical production in the
Tsardom, the entire chemical industry, the breweries, 85 per cent. of
the electrical works and 70 per cent. of gas production were German.
And of the capital invested in private railways no less than
628,000,000 roubles belongs to Germans. Even Russian municipalities
were wont to apply to Germany for their loans, and of the first issues
of thirty-five Russian municipal loans no less than twenty-two were
raised in the Fatherland.
[41] Virginio Gayda.
The necessity of waging war against this potent enemy within the gates
intensified Russia's initial difficulties to an extent that can hardly
be realized abroad, and was a constant source of unexpected and
disconcerting obstacles. Some time before the opening of the war, a
feeling of restiveness, an impulse to throw off the German yoke, had
been gradually displaying itself in the Press, in commercial circles,
and in the Duma. These aspirations and strivings were focussed in the
firm resolve of the Russian Government, under M. Kokofftseff, to
refuse to renew the Treaty of Commerce which was enabling Germany to
flood the Empire with her manufactures and to extort a ruinous tribute
from the Russian nation. Two years more and the negotiations on this
burning topic would have been inaugurated, and there is little doubt
in my mind--there was none in the mind of the late Count Witte--that
the upshot of these conversations would have been a Russo-German war.
For there was no other less drastic way of freeing the people from the
domination of German technical industries and capital, and the
consequent absorption of native enterprise.
When diplomatic relations were broken off, and war was finally
declared, Germany was already the unavowed protectress of Russia. And
when people point, as they frequently do, to the war as the greatest
blunder ever committed by the Wilhelmstrasse since the Fatherland
became one and indivisible, I feel unable to see with them eye to eye.
Seemingly it was indeed an egregious mistake, but so obvious were the
probable consequences which made it appear so that even a German of
the Jingo type would have gladly avoided it had there not been another
and less obvious side to the problem. We are not to forget that in
Berlin it was perfectly well known that Russia was determined to
withdraw from her Teutonic neighbour the series of one-sided
privileges accorded to her by the then existing Treaty of Commerce,
and that this determination would have been persisted in, even at the
risk of war. And for war the year 1914 appeared to be far more
auspicious to the German than any subsequent date.
Handicapped by these foreign parasites who were systematically
deadening the force of its arm, the Russian nation stood its ground
and Germany drew the sword.
Improvisation--the worst possible form of energy in a war crisis--was
now the only resource left to the Tsar's Ministers. And the financial
problems had first of all to be faced. In this, as in other spheres,
the country was bound by and to Germany, so that the task may fairly
be characterized as one of the most arduous that was ever tackled by
the Finance Minister of any country--even if we include the
resourceful Calonne. And M. Bark, who had recently come into office,
was new not only to the work, but also to the politics of finance in
general. Happily, his predecessor, who, whatever his critics may
advance to the contrary, was one of the most careful stewards the
Empire has ever possessed, had accumulated in the Imperial Bank a gold
reserve of over 1,603,000,000 roubles, besides a deposit abroad of
140,720,000 roubles. Incidentally it may be noted that no other bank
in the world has ever disposed of such a vast gold reserve.
Although one of the richest countries in Europe, Russia's wealth is
still under the earth, and therefore merely potential. Her burden of
debt was heavy. For at the outbreak of the war the disturbing effects
of the Manchurian campaign and its domestic sequel, which had cost the
country 3,016,000,000 roubles, had not yet been wholly shaken off.
And, unlike her enemy, Russia had no special war fund to draw upon. As
the national industries were unable to furnish the necessary supplies
to the army, large orders had to be placed abroad and paid for in
gold. At the same moment Russia's export trade practically ceased, and
together with it the one means of appreciably easing the strain. The
issue of paper money in various forms was increased, loans were
raised, private capital was withdrawn from the country, various less
abundant sources of public revenue vanished, and the favourable
balance of trade dropped from 442,000,000 roubles to 85,500,000.
Germany, on the other hand, possessed her war fund, in addition to
which she had levied a property tax of a milliard marks a year before
the outbreak of hostilities; she further drew in enormous sums in gold
from circulation, and generally mobilized her finances systematically.
But Russia was compelled to improvise, to make bricks without straw.
Her war on a front of two thousand versts long had to be waged with
whatever materials happened to be available. Japan--who, I have little
doubt, will be found at the close of the great struggle to have
benefited largely by her pains--exerted herself to provide munitions
for her new friend and ally. The United States, Great Britain and
France also contributed their quota. For many of these orders placed
abroad gold had to be exported, and as Russia has no other natural way
of importing gold but by selling corn, which there were no means of
transporting, a sensible depreciation of the rouble resulted. Great
Britain and France have also had to make heavy purchases abroad for
their military needs, but these two countries can still export wares
extensively and keep the payments in gold within certain limits. Even
Italy receives a noteworthy part of her annual revenue in the shape of
emigrants' remittances from abroad. But once Russia's gates were
closed and her corn had to remain in the granaries, elevators, or at
railway stations, the shortage in her revenue became absolute. During
the first three months of the year 1915 the value of Russian exports
over the Finnish frontier and the Caucasian coast of the Black Sea was
only 23,000,000 roubles, showing a falling off of about 93 per cent.,
as compared with the worth of the produce exported during the
corresponding three months of the preceding year.
It is a curious fact that part of this reduced trade continued to be
carried on with Germany for months after the war had begun. A Russian
publicist has remarked that at the opening of the campaign the voice
of the nation was heard saying: "Corn we have in plenty, and
vegetables and salt. It is we who feed Europe. Germany will therefore
starve without our corn. Our armies may retreat, but our corn will go
with them; and the more the Germans advance into Russia, the further
they are away from their bread." And in this the average Russian saw a
pledge of victory. But before six months had lapsed, the everyday man
grew indignant. For he learned that his corn was being conveyed
through Finland and Sweden into Germany, and in such vast quantities
as had never before been heard of. Here is a street scene illustrative
of this traffic and the feelings it aroused. A long string of carts
laden with flour blocks in one of the Petrograd streets leading to a
bridge over the Neva; a General walking with his wife stops one of the
drivers and asks: "Wherever are you taking the flour to?" "Where do
you suppose? Sure we're taking it to the Germans. We have to feed the
creatures. They are a bit faint." "There you see!" exclaimed the
General to his wife; "didn't I tell you? And every morning without
fail the same long line of carts blocks the streets while our corn is
being taken to the Germans!"[42] It is to be feared that this commerce
has not yet wholly ceased. For the Russians, like ourselves, are
considerate of the Germans.
[42] Cf. _Novoye Vremya_, February 24, 1915.
That that story of trading with the enemy is no idle anecdote is
evident from the circumstance, based on official Russian statistics,
that during ten months from August to May, while the war was being
waged relentlessly between the two empires, Russia bought from Germany
no less than 36,000,000 roubles' worth of manufactures. How much the
Central Empires purchased from Russia, I am unable to say. That
commerce is one of the almost inevitable consequences of improvisation
and one of the most sinister. Some months after the outbreak of the
war the Imperial Government levied a duty of a hundred per cent. on
all commodities coming from Germany, Austria-Hungary, and Turkey. That
was assumed to be a prohibitive tariff. But it failed to keep out
imports from the Fatherland. In the one month of April 1915, Germany
sent 3,000,000 roubles' worth of manufactured goods into Russia, and
in May 2,500,000 roubles' worth. And the Allied Press was then
descanting on the stagnation in German trade and the starvation of the
German people. The explanation of this anomaly lies in the unforeseen
and enormous scarcity and rise of prices in the home markets. Some
metal wares--for instance, various kinds of instruments and of wire
appliances, etc.--are not to be had in Russia for love or money,
consequently a hundred per cent. duty is but a heavy tax paid by the
consumer, not an effective prohibition.[43] Since then, I am assured,
the Government has adopted stringent measures which some people
believe to have put an end to that form of trading with the enemy.
[43] Cf. _Utro Rossiyi_, August 28, 1915.
It is hard for foreigners to realize the plight to which Russia has
been reduced by the closing of her gates. As the Nile waters were the
source of Egypt's prosperity, so the abundant Russian harvests
constitute the life-giving ichor which flows in the veins of the
Russian nation. Without superfluous corn for exportation, the State
would be unable to meet its obligations, maintain its solvency, or
provide the motive power of progress. The exportation of agricultural
produce was the fountain head not only of Russia's material
well-being, but of her moral and cultural evolution: everything, in a
word, was dependent upon plentiful harvests and extensive sales of
cereals abroad. And, suddenly, the gates were closed, the corn was
stored, and the nation left without its revenue. Nobody but a Russian,
or one who has lived long in the country, can realize fully all that
this tremendous blow connotes. Parenthetically, it may be remarked
that it adds a motive, and one of the most potent, to those which
inspire the heroic sacrifices of the people, quickening the flame of
devotion to their Allied cause. Russia is now literally fighting for
her own liberty, for escape from the iron circle that shuts her off
from the sea, and isolates her from the western world in which it is
her ambition and her mission to play a helpful part.
One needs no further explanation why the Russian Government put
pressure upon M. Delcasse and Sir Edward Grey to open the Dardanelles
route for the Russian corn. Neither is it to be wondered at that while
the Allied Forces in Gallipoli were still grappling with the Turks,
the Tsar's Ministers should have thrust into the foreground the
question of Constantinople and the Straits, and insisted upon an
immediate pragmatic settlement. True, that was not statesmanship; it
was anything but political wisdom; but at any rate it was human on the
part of all concerned. If this Titanic struggle, in which Russia is
perhaps the greatest sufferer, is to bring her any palpable and
enduring advantage, this, it was urged, can take but one form--freedom
from the preposterous restraints that bar her way to the sea, and
through the sea to the outside world. This and other pleas were
powerful; but for this very reason and for the purpose of realizing
her natural striving I personally would have temporarily negatived the
Russian proposal and left nothing undone to ensure its withdrawal. For
if I were asked to point to the efficient cause of the Allies' present
lamentable plight in the Near East, I should single out this premature
arrangement and its necessary consequences. For Roumania and Bulgaria
were at the moment as bitterly opposed to Russia's overlordship in the
Dardanelles and her possession of Constantinople as were France and
Great Britain in the days of yore. And they embodied their opposition
in acts.