Candide était étendu dans la rue et couvert de débris. Il disait à
Pangloss: Hélas! procure-moi un pen de vin et d'huile; je me meurs.
Ce tremblement de terre n'est pas une chose nouvelle, répondit
Pangloss; la ville de Lima éprouva les mêmes secousses en Amérique
l'année passée; mêmes causes, mêmes effets: il y a certainement une
traînée de souphre sous terre depuis Lima jusqu'à Lisbonne. Rien
n'est plus probable, dit Candide; mais, pour Dieu, un peu d'huile
et de vin. Comment, probable? répliqua le philosophe; je soutiens
que la chose est démontrée.
Candide perdit connaissance, ... et Pangloss lui apporta un peu
d'eau d'une fontaine voisine.
VOLTAIRE, _Candide_.
§ 1
Dialectics round the Death-bed
Philosophical aloofness is all very well in its way, but while we argue
about economic causes and attempt to induce a philosophy of earthquakes,
our bright young democracy lies bleeding under the ruins. The urgent
necessity is a little first aid, a little cessation of the killing. I
don't know how many young men in different parts of the world have been
deliberately and scientifically murdered during the writing of this
protest. England alone, who has been criticised for her delay in
exposing her youth to the slaughter, is having about half a million of
her best citizens stabbed or pierced or crushed or mutilated or poisoned
or torn to pieces in one year[64] of modern warfare. And life is not the
only instrument of vital progress that is being thrown away. Britannia
has beaten her trident into a shovel, and with it is shovelling gold;
and not only gold, but youth and love and happiness into the deep sea.
The belligerent nations are frantically engaged in destroying two
thousand years of education and all the accumulated capital of humanity.
Only the enemies of civilisation, the sellers of arms and the sowers of
hatred, are growing rich on its ruins. It is impossible to deny that the
longer the war continues the greater will be the subsequent sufferings,
spiritual and material, of every nation engaged. It is impossible to
maintain that any nation or class or individual will be any better in
any respect for the Great War, with the single exception of that
parasitic class who, as a class, and therefore perhaps not consciously,
are chiefly responsible for its inception. We must have Peace first and
congresses afterwards. The survivors of civilisation cannot discuss a
lasting settlement while they are still under fire.
FOOTNOTES:
[Footnote 64: The total British casualties from the beginning of the war
till July 18, 1915, were given as 321,889, of whom 61,384 were killed.]
§ 2
German Responsibility for the War
Nor is it necessary to continue the slaughter while we argue about which
belligerent must bear the chief responsibility for the outbreak. The
dialectical exercises of the German Chancellor and Mr. Asquith are so
futile that they remind us only of two naughty children who drag out
their squabble with stubborn outcries of "He began it." The first
consideration is to stop fighting. Such academic discussions are
necessarily endless, for the simple reason that every nation has its
faults, to which criminal motives can always be attached: every nation
has its fools, whom its enemies can describe as typical representatives.
The question of responsibility for the Great War must be left to the
historians of the future. I am quite confident (though even Viscount
Grey or Professor Gilbert Murray cannot prove) that they will hold
Germany responsible: but I am equally confident that the blame they
throw on the nation responsible for the war will be less pronounced than
the praise they will reserve for the nation which first has the courage
to speak of peace. My belief in Germany's responsibility is based
largely on German apologetics and strengthened by the evidence of
commercial conditions in Germany before the outbreak. Professor
Millioud, for instance, has shown that "German industry was built up on
a top-heavy system of credit, unable to keep solvent without expansion,
and unable to expand sufficiently without war."[65] Or if a good
working test of German responsibility were needed it would be sufficient
to point out that no nation innocent of aggressive intentions would have
drafted such an ultimatum as that which Austria, with German connivance,
sent to Serbia; and that no nation anxious for war would have drafted
such a conciliatory reply as that which Serbia returned to Austria by
Russia's instructions. It is in fact clear that as long ago as 1913
Austria had determined to crush Serbia, and that in 1913 that
determination was only postponed; and postponed not, as we thought at
the time, by the tact of Lord Grey at the Conference of London, but only
by Italy's refusal to join in the adventure, as we now know from the
revelations of San Giuliano and Salandra. Similarly, knowing as we do
that England is no exception to the rule that no imperial nation can be
wholly compact of righteousness, we might hesitate to accept _The
Times'_ version of British innocence, and we might hesitate to accept
Lord Bryce's report on the German atrocities in Belgium, knowing as we
do that it is based almost entirely on the hearsay evidence of refugees
who would be anxious to distinguish themselves as witnesses from the
general ruck of destitution; but it happens that the general charges of
German aggressiveness and German brutality are fully corroborated by
German literature.[66] Unfortunately these distinctions between brutal
and chevaleresque methods of warfare remain only questions of method;
they concern manners rather than morals, and are as irrelevant to our
hopes for the abolition of war as the questions of diplomatic method
already mentioned.[67] Equally irrelevant, in any discussion of the
possibility of substituting "compulsory arbitration" for war, is the
attempt to distinguish between aggressive and defensive war, or to
throw all the blame of aggression on either of the two belligerents; for
the simple reason that each belligerent will perhaps never believe and
will quite certainly never admit that his own intentions were anything
but defensive or altruistic.[68] The _locus classicus_ for such
protestations of innocence occurs in the Italian Green Book, where
Austrian diplomats may be found declaring, _with every appearance of
sincerity_, that the invasion of Serbia was a purely defensive measure.
And in a sense, in such a well-armed continent, every aggression is
indeed a fore-arming against the future. It might also be suggested that
the crime of aggression is an offence not against an individual but
against the peace of the community: and until the European community is
constituted the guilt of such a crime cannot be brought home to either
of the belligerents.
FOOTNOTES:
[Footnote 65: _The Ruling Caste and Frenzied Trade in Germany_, by
Maurice Millioud, Professor of Sociology in the University of Lausanne.
(1915.) Reviewed in the _Manchester Guardian_ by R. C. K. E.]
[Footnote 66: All that we need know, for instance, of German military
conduct in Belgium is contained in the following communication made to
the _Kölnische Zeitung_ by Captain Walter Brum, adjutant to the
Governor-General of Belgium, who may be presumed to know the inner
history of these appalling transactions:--
"The principle according to which the whole community must be punished
for the fault of a single individual is justified by the theory of
_terrorisation_. The innocent must suffer with the guilty; if the latter
are unknown the innocent must even be punished in their place, and note
that the punishment is applied not _because_ a misdeed has been
committed, but _in order that_ no more shall be committed. To burn a
neighbourhood, shoot hostages, decimate a population which has taken up
arms against the army--all this is far less a reprisal than the sounding
of a _note of warning_ for the territory not yet occupied. Do not doubt
it; it was as a note of warning that Baltin, Herve, Louvain, and Dinant
were burned. The burnings and bloodshed at the opening of the war showed
the great cities of Belgium how perilous it was for them ..." etc.]
[Footnote 67: Chapter I, §§ 9-11.]
[Footnote 68: See below, note on p. 113; and compare Brailsford, _The
War of Steel and Gold_, p. 22, on "preparations which are always
supposed to be defensive," and p. 264, on the methods used to support
the plea that large navies are purely "defensive."]
§ 3
The Value of German Culture
The question whether Germany is actually attempting or would be
justified in attempting to impose her culture on the rest of Europe; or
whether England has good reasons for the limitation or suppression of
German culture, is another side-issue. German culture (in Matthew
Arnold's correct use of the word, meaning, that is, the average of
intellectual and social civilisation), has not on a general inspection
much to be proud of. The modern literature of Germany is largely a
transcription of Russian, French and English authors, and it is
significant that among foreign authors the widest success is reserved
for purveyors of _le faux bon_, writers whose work is distinguished by
its spirited failure quite to attain the first-class.[69] The most
promising of modern authors writing in the German language, Schnitzler,
is an Austrian Jew. Hauptmann, the most distinguished and original of
German dramatists, has for thirty years been writing plays which would
pass for imitations of Mr. John Galsworthy's failures. Sudermann's style
reminds one of a snail crawling over the Indian lilies which he
describes.... Germany, it is true, has reason to be proud of her
theatres, but that is a matter of State enterprise, rather than an
indication of national culture. The German State has been efficient
enough to perceive that good theatres are a fundamental necessity of
national education, and that good theatres, owing to the excessive rents
they have to pay, can never be kept going without a State subsidy. But
these admirable theatres can hardly be called the vehicles of a high
native culture. Their famous Reinhardts are more efficient only because
more acquisitive than our own Jewish impresarios. The ideas they have
acquired are chiefly Russian or English: and they have profited by the
ideas of Granville Barker and Gordon Craig in order to produce the plays
of Shakespeare and Shaw--(just as industrial Germany profited by the
ideas of Bessemer[70] and Perkins). Germany's claim to artistic
vitality, to genuinely original culture, can be supported only by a
certain distinct excellence in sculpture and caricature, two arts which
often seem to go hand in hand, perhaps because both are based on a
precise simplification of form. But for the activity of a small band of
sculptors and caricaturists centred for the most part in Munich,[71] we
might be content to regard Germany not as a fount of culture but rather
as one of the world's workshops, a well-organised _ergastulum_ for
dealing with the drudgery of modern civilisation, for manipulating
secondary products and extracting derivatives, a large factory for the
production of dictionaries, drugs and electrical machinery.[72]
The extraordinary efficiency of Germany, _as a workshop_, is not due to
any intellectual pre-eminence of the nation as a whole. It is most
clearly and emphatically due to the fact that the German autocracy,
whatever its political iniquity, has had the intelligence and the
national solidarity to choose its business men from among the brains of
the community. In Germany any man of conspicuous intellectual capacity
may be picked out, roughly speaking, and assigned to the direction of a
particular industry. In England we achieve inefficiency by the contrary
process, and are only willing to regard a man as capable and revere him
as an "expert" if he happens to have been occupied exclusively for a
certain number of years in the narrow routine of a particular subject.
This pernicious fallacy of the "Expert" is actually preached in England
as a means to the very Efficiency which in fact it almost invariably
excludes. It is commonly assumed that no man can write a good play
unless he has been a bad actor, or that a retired admiral, quite
incapable of grasping any general idea that was not popular in the Navy
twenty years ago or in the smoking-room of his club, would be better
able to direct the affairs of the Navy than Mr. Winston Churchill or Mr.
Balfour.[73] There is a similar outcry for a government of "Business
Men," although anyone who happens to have heard a couple of average
business men discuss a problem of their own business in one of their own
offices will hardly be able to deny that a capable poet and a capable
painter would have settled the question in a quarter of the time.
Instead of superstitiously believing that only "Business Men" can be
efficient, Germany picks out her business men (and her bureaucrats) for
their general efficiency. She has attained efficiency by abandoning the
fallacy of the Expert in favour of the maxim of Confucius--"the Higher
type of man is not like a vessel which is designed for some special
use."[74]
But from the fact that German industry and German theatres are better
managed than our own it does not follow that there is any natural or
national antagonism between England and Germany. The real hatred of
Germany if it exists in England at all should be found among what it is
becoming the fashion to call "the intelligentsia." Such a purely
intellectual hatred of the sentimental melodrama of _Faust_ and of the
semitic luxuriance of Wagner and Reinhardt is not likely to become a
democratic motive in England. Here brains are always unpopular, and Park
Lane will never be stormed by the mob until it is inhabited by the
Bernard Shaws, the Lowes Dickinsons and the Bertrand Russells, instead
of by German financiers.
There is no national hatred between England and Germany. The two peoples
are natural friends. Even the men in the trenches (or perhaps I should
say particularly the men in the trenches), fraternise with their
opponents whenever they get the chance.[75] Even now a press campaign of
a few months would suffice to make Germany popular in England; and if
that were ever to happen, which is not improbable, only the
"intellectuals," who are most strongly opposed to this war, would still
find much to dislike, but not to fight about, in the national culture
produced by the German character.
FOOTNOTES:
[Footnote 69: E.g. Oscar Wilde and Artzibashev.]
[Footnote 70: "The whole industrial expansion of Germany dates from the
introduction of the Bessemer process in 1879, by which its supplies of
iron became possible to work at a profit."--_Bertrand Russell_.]
[Footnote 71: It is unnecessary to refer at length to the world-famous
caricaturists of _Simplicissimus_, although it may be noted that the
best of them, Gulbrannson, is a Norwegian, while his chief rival, Heine,
is a Jew. Munich sculptors whose names might be mentioned are
Hildebrand, Taschner, Hahn, and Wrba.]
[Footnote 72: Even such scientific achievements as those of Ehrlich and
Ostwald should be regarded as results of regulated industry and diligent
experiment.]
[Footnote 73: Another instance of the fallacy is the quite unjustified
prejudice in the Army in favour of "Regular" officers.]
[Footnote 74: The foundation of German business efficiency not on the
practical science of the specialist but on theoretic and general mental
exercise is further illustrated by the great and increasing prevalence
of Latin and Greek in German education ... while again our own "Business
Experts" are reversing the process. The passages that follow are quoted
from a letter of Dr. Rice Holmes in _The Times_ of August 11, 1916.
"In German schools not only are classics taught more systematically and
more thoroughly than in all but a few of our own, but they are learned
by a greater proportion of the population; and, moreover, the hours
devoted to natural science in those schools in which it is taught are
fewer than in our public schools.... Since 1903 the number of German
boys receiving a classical education has steadily increased. In 1904
there were 196,175 pupils in schools (_Gymnasien_ and _Realgymnasien_)
where Latin is compulsory, of whom 153,680 belonged to the classical
schools (_Gymnasien_), and therefore learned Greek as well (W. Lexis,
_Unterrichtswesen im Deutschen Reich_, ii. 218); in 1911, as Mr. R. W.
Livingstone has shown (_The Times Educational Supplement_, April 4, p.
49, col. 2), the corresponding figures were 240,000 and 170,000; and in
1908, 'out of a total of 31,622 students entering 18 out of 21 German
universities (Munich, Erlangen, and Wurzburg not reporting), ... only
7-1/2 per cent entered without Latin or Greek' (Professor Francis W.
Kelsey, _Latin and Greek in American Education_, 1911, p. 43). "Möge das
Studium der griechischen und römischen Literatur immerfort die Basis der
höheren Bildung bleiben." So wrote the greatest of the Germans; and the
countrymen of Goethe, whose genius was scientific as well as poetical,
have not forgotten his words. On the other hand, in the modern schools
(_Realgymnasien_ and _Oberrealschulen_) only a small fraction of the
time-table--from two hours a week (out of twenty-five) to six (out of
thirty-one)--is devoted to natural science. To anyone who has read
Matthew Arnold's _Higher Schools and Universities in Germany_, or Dr. M.
E. Sadler's _The Realschulen in Berlin_, or who is acquainted with the
opinions expressed by Helmholtz, A. W. Hofmann, Bauer, and other
'eminent scientific professors,' it will not appear paradoxical that the
object of thus restricting the hours devoted to the teaching of natural
science in schools is to promote the scientific efficiency of the German
nation. It was with this object that by the regulations published in
1901 the time devoted to Latin in the _Realgymnasien_ was increased. And
those who do not learn natural science learn what for the nation is
equally important--the value of scientific method."]
[Footnote 75: The Daily News, October 20, 1915:--
"A pathetic story is told in the _Vorwärts_ by Herr Adolf Köster (who
acts as war correspondent for the German Socialist Press) in connection
with the recent fighting at Hooge. A German soldier told him of a young
Scotsman whom he had killed with a hand-grenade in whose pocket he had
found a little pocket-book:--
"'We looked through the booklet. It contained postcards from the front,
from home, from a sister and from a sweetheart--photographs from the
battlefields of brave soldiers and from home. There was also a small
amateur photograph, rather badly made, of a young girl sitting at a
typewriter. She had blonde hair and on the back of the photo she had
written: "Look at the waves of my hair and note also how very diligent I
am" (English in the original). One of us asked the soldier to give him
this photograph. But he replied: "You can take the whole book, photos,
postcards, etc. But this picture I will keep in memory of my friend." By
"his friend" he meant the Scotsman whom he had killed by his
hand-grenade.'"]
§ 4
The Manufacture of Hatred
But if there is no natural hatred between the two belligerent
protagonists, there is a feverish production of the artificial variety.
Indeed this diligent manufacture of hatred is probably the most
demoralising result of warfare, particularly disastrous in its ethical
effect on the individual. It proceeds by the ordinary methods of deceit,
suppression of the true and suggestion of the untrue, and by means of
the newspapers this process of moral degeneration is sometimes actively
directed, sometimes only permitted or encouraged by the Governments
concerned. The London press is always ready to swallow the pathetic
fabrications of unscrupulous refugees, and publishes with joy any
Rotterdam rumour about German bestiality; but refuses to print any
report however authentic which ventures to suggest that the Germans are
as human as ourselves. There was, for instance, a Canadian woman, Dr.
Scarlett-Synge, who under the aegis of her medical diploma, returned
from Serbia through Germany, and discovered that some of the German
internment camps are not as bad as they are commonly believed to be.
Whatever her qualifications and opportunities for forming a correct
opinion, and they happen to have been particularly good, there is no
doubt that this woman's report was of the highest interest. Yet not a
single daily paper in England would consider its publication, on the
ground presumably that it might reduce the national inflammation and
thereby "prejudice recruiting." As if true patriotism, sane and lovely,
had anything to do with the pathological condition of hatred.
"Recruiting be damned," says the patriotic philosopher, "_odium nunquam
potest esse bonum_."[76] The method of distortion is also abundantly
used by journalists of both parties. German hatred of England has often
been stoked up by isolated mistranslations of sentences from _The
Times_, and English and French journalists have not been slow in
following the German example. It is said that after the fall of Antwerp
the _Koelnische Zeitung_ announced that "as soon as the fall of Antwerp
was known the church bells in Germany were rung," a harmless message
which was successively distorted by the _Matin_, the _Daily Mail_, and
the _Corriere della Sera_, until it finally reappeared in the _Matin_ in
the following form: "According to the information of the _Corriere della
Sera_ from London and Cologne it is confirmed that the barbaric
conquerors of Antwerp punished the unfortunate Belgian priests for their
heroic refusal to ring the church bells by hanging them as living
clappers to the bells with their heads downwards."[77]
The Manufacture of Hatred is unfortunately become a part of the
Nationalist Movement in nearly all modern European States. The spurious
Nationalism which is the result not of race but of education, depends
for its existence almost entirely on so-called ethnological propaganda
and continues to thrive by the cultivation of two propositions, neither
of which is true: that all the members of one national group are
racially different from all the members of the neighbouring group; and
that this racial difference naturally and necessarily and properly
implies the mutual hatred of the two nations. They proclaim, in fact,
that certain nations are the "natural enemies " of certain others, by
hating which they are only fulfilling the national function of
self-realisation. By such arguments, which have no genuine ethnological
foundation, the false prophets of nationalism are filling Europe with
the racial prejudice of artificial Kelts, artificial Poles, and
artificial Teutons. Of course race hatred between Slav and Teuton is no
more "natural" than family hatred between Jones and Robinson; and even
if it were, even that is if the cultures of two neighbouring races were
mutually exclusive, it could still be argued--as it must in any case be
argued--that no nation is racially pure. The last "Pole" I met proudly
professed that the hatred of Russia was _in his blood_. Yet he was born
in Bessarabia, and it was therefore not surprising that his facial type
was distinctly Roumanian; he came, that is, if race means anything at
all, of a Græco-Latin stock, and his hatred of Russia, which seemed to
be the beginning and the end of his programme of "Polish nationalism,"
was the result of a few years of neglected education. Half the
conflicting "Nationalisms" of Europe are programmes of artificial
hatred, the propagandists of which may actually be of the same blood as
their opponents; a single generation suffices for the manufacture of the
racial enthusiast, which is often completed by a modification of the
family name. Even Greeks and Bulgars are frequently of common descent.
When a Macedonian village changes hands the Greek Karagiozes has been
known to develop into the Bulgarian Karagiozoff; and a Mazarakis will
boast a racial incompatibility with his second cousin Madjarieff. The
same process for the manufacture of nationalism may be detected at the
other end of Europe: at Mons of glorious memory there was a Walloon with
the good old Walloon name of Le Grand, whose grandfather had been an
equally enthusiastic Fleming with the good old Flemish name of De
Groodt.
True nationalism may indeed be differentiated by the absence of this
artificial element of ethnological hatred. True nationalism is simply
the feeling for the small independent community, a movement for the
autonomy of the local group. No true manifestation of the nationalist
movement in Europe is ever opposed to other nationalisms; but all alike
are involved in a desperate political conflict with their common enemy
Imperialism.
FOOTNOTES:
[Footnote 76: Spinoza, _Ethica_, IV, 45.]
[Footnote 77: _Labour Leader_, March 30, 1916, quoting an address by Mr.
Arthur Ponsonby, M.P.--I have not been able to verify these references,
so I give the story only as an example of the method of progressive
distortion, and not as one that actually occurred, though it may have
done so.]
§ 5
Imperialism the Enemy
Imperialism, on the other hand, is the feeling for large dominions and
is very often only an unreasoning lust for the possession of
territory:[78] surviving perhaps from the time when the land of the
community was regarded as the reserved hunting-ground of the tribal
chief, or at least as the private estate of the national monarch. But in
so far as this passionate desire for extending the superficial territory
under the central government is a reasoning desire, in so far that is as
attempts have been made to justify by retrospective theories the almost
instinctive achievements of painting the map red, it is fairly clear
(although the issues have been confused by altruistic and Kiplingesque
but not by any means unfounded views about the White Man's Burden) that
Imperialism is based on the insatiable claims of over-productive
commerce. Commerce at any rate is the _ex post facto_ excuse for the
foundation of the British Empire, and if it can no longer be pleaded as
a reason for the maintenance of the British Empire, it is simply because
the British Empire is no longer an empire, but for the most part a
federation of autonomous states.[79] But Imperialism has only been
scotched by the unconscious wisdom of English political development. It
still unhappily survives not only in the intermittent demand for the
acquisition of fresh colonial territory, but also, in its crudest form,
without even the shadow of an excuse commercial or altruistic, in the
continued subjection of Ireland to English rule. We must not be
surprised if the imperialistic elements of the State receive after the
war a new lease of life from the mutual encouragement of commerce and
militarism.
The commercial classes of course support Imperialism because, with an
obtuseness permitted only to our "business men," they believe that the
acquisition of more colonies still means the discovery of new
markets.[80] They have not yet realised that nowadays all markets are
practically open markets, and that no tariff can effectively exclude
goods for which there is any demand, for the simple reason that an
effective demand cheerfully pays an increased price. All nations in fact
stand to share fairly the commercial advantage of each other's colonial
markets: and it might even be shown by a little simple book-keeping that
the particular balance any nation gains from trading with a colony of
its own must be debited with the expense of governing that colony. In
short, the commercial excuse for Imperialism is actually obsolete. Yet
commerce continues to support Imperialism, and although the original
reason for this support is no longer valid, it is still, unconsciously
perhaps but very methodically, serving its own interests by this
support, in so far as Imperialism involves militarism (or "navalism")
and so leads to the probability of war. But even if the commercial
reasons which constitute the only possible excuse for Imperialism were
still valid, it would still remain equally valid and much more important
that Imperialism is bad in itself, the enemy of liberty and the begetter
of arrogance.
Imperialism is bad on general grounds because it implies a
centralisation of authority which violates the natural rights of
nationalities. A nationality, as has already been suggested, means not
necessarily a pure racial enclave, but simply a small local group, in
the formation of which similarity of "race," religion, and culture will
not be ignored but will naturally be considered as modifications of
primarily geographical boundaries. The right of nationalities to local
autonomy, to deal again only with the simplest general reason, is based
on the idea of democracy, the exercise of a political voice being
regarded as a natural and inalienable right of the free citizen.
Democracy means representative government, and representative government
simply does not work in a large and mixed community of more than twenty
millions.[81] Hence the right of nationalities to local autonomy is
fundamental, and is inconsistent with Imperialism as such.
Imperialism is bad because it is based on conquest, implies a "subject
race," and sooner or later will have to be maintained by war. It breeds
a conquering and commercial spirit, which is never satisfied unless it
is carrying some one else's burden (at a high freight). The imperialist
plutocracy will then find itself so much occupied with other people's
affairs that it will be neglecting domestic politics altogether: and
this neglect will be the more disastrous in so far as poverty and
servitude will have increased at the same rate as luxury. The citizens
of an Imperialist state will be unable to control their commercial
masters, and, as Rousseau said of the English, will soon find themselves
a nation of slaves[82]: and that not only because a policy of conquest
is incompatible with democracy; but also because the lust of conquest
and the arrogance of
FOOTNOTES:
[Footnote 78: H. N. Brailsford (_The War of Steel and Gold_, p. 125)
speaks of an "indifferent democracy." Unhappily our democracy is not
indifferent to Imperialism, for it is misled to believe that mere
expansion is somehow grand and good; the only geography it learns at
school is miscalled "patriotic" because it is designed to encourage this
belief.]
[Footnote 79: I.e. as a real "Empire," the British Empire was a failure,
as all Empires must be. It has been a success since it ceased to be an
Empire about a hundred years ago. Cf. Professor H. E. Egerton's
remark:--
"The British Colonial Empire of to-day is not the Empire which was the
outcome of seventeenth-century methods. So far as the colonists
themselves were concerned, English colonisation (in the seventeenth and
eighteenth centuries) was a complete success, but from the point of view
of the mother country it was a failure, and the rock on which it
foundered was the same rock which lost America to Spain and caused
Canada to acquiesce in separation from France."]
[Footnote 80: I am ashamed to say that when I wrote these chapters I had
not read Mr. H. N. Brailsford's _War of Steel and Gold_. But Mr.
Brailsford's brilliant examination of the connection between War and
Finance is quite consistent with my supplementary theory of War and
Trade. "Trade supplies no explanation of Imperialism," says Mr.
Brailsford (p. 75). It does, in so far as Traders support Imperialism
because they think it is good for Trade: while financiers, as Mr.
Brailsford shows, support Imperialism because they know it is good for
investments.]
[Footnote 81: "What is vital to any real Democracy in a densely-peopled,
economically-complicated modern State, is that the Government should not
be one. The very concentration of authority which is essential in war
is, in peace, fatally destructive not of freedom alone, but also of that
maximum individual development which is the very end and purpose for
which society exists."--Sidney Webb, _Towards Social Democracy?_,
1916.]
militarism acquire strength with each fresh licence until the community
as a whole is quite unable to control its own baser passions--a
condition which more than any other merits the name of servitude.[83]
Imperialism is a form of political corruption in which a nation is
consoled for its own slavery by the pride of enslaving its neighbours.
The attainment of permanent peace connotes the abandonment of
Imperialism.
FOOTNOTES:
[Footnote 82: "Les Anglais veulent être conquérants; donc ils ne
tarderont pas d'être esclaves."--_Political Writings_, C. E. Vaughan, I,
373.]
§ 6
Possible Objects of War
If the nations are prepared to abandon the claims of Imperialism there
will be very little else left to fight about. An examination of the
documents connected with any war of the last century shows that the
object of a belligerent in prolonging the agony is usually expressed in
vague language that can be dissolved by a little analysis. Sometimes a
government will propose, in the interests of peace and good government,
to crush the enemy's aggressiveness by a purely defensive aggression, an
excuse for bloodshed which only the most fanatical pacifist could
confuse with Mr. Asquith's blunt watchword of "crushing German
militarism." The logical fallacy of such an excuse which is almost
invariably pleaded by powerful belligerents,[84] a fallacy of which no
one could wish to accuse Mr. Asquith's solid intellect, lies (quite
apart from any question of the priority of aggression) in the fact that
any attempt to crush by force the Will to Conquer inevitably breeds
more militarism. The tag about taking a lesson from the enemy, _fas est
et ab hoste doceri_, is only one half of the unhappy truth that the
fighter is fatally bound to acquire his enemy's worst characteristics.
The object undertaken apparently in the interests of democracy can only
be accomplished by the wholesale suppression of democratic rights, and
involves an organised manufacture of imperialistic emotion which ends by
delegating the authority of the State to a reactionary triumvirate of
bureaucracy, jingoism and vulgarity (or Tory, Landowner and Journalist).
The guarantees of democracy, the rights of free thought and free speech,
every sort of civil liberty and every defence against the servile state,
will all have to be suppressed in the interests of the nation at war. It
is the old story of the conversion of Thais by Paphnutius: the preacher
snatches lovely Thais from the burning, but himself is damned--"si
hideux qu'en passant la main sur son visage, il sentit sa laideur." A is
white and finds it necessary to whitewash B, who is black: after several
years of hopeless grey, A finds that he has indeed put some very
satisfactory daubs of whitewash all over B, but that his own coat has
been blackened in the course of the struggle. It is as if a gardener,
having heard of the cannibalistic habit of earwigs, proposed to
exterminate the earwig in his rose-garden by importing a special army of
five million earwigs collected at great expense from the surrounding
country.
Other belligerent governments will raise the plea of checking the spread
of a hostile and dangerous culture; a plausible because apparently
philosophical justification of war as the only means of extirpating a
heresy that might pervert the whole future of European civilisation.
Unfortunately such a moral effect, such a "conversion by shock," could
only be accomplished by a very sudden, complete and shattering victory;
and it is now beginning to be recognised that spectacular triumphs are
not to be expected in modern warfare. But even if it were as possible by
violence as it might conceivably be desirable to extirpate or even to
limit the propagation of a particular form of mental culture, the
achievement would certainly not be worth the cost to the unhappy
survivors and their posterity. It would indeed be a crime against
humanity to eliminate the better part of the younger generation, the
flower of human brains, in the monstrous pedantry of attempting to
correct an intellectual error. For the risks of modern warfare are not
ordinary. It is not sufficiently realised that in six months of
offensive tactics under modern conditions no man in the front line has
more than one chance in a million of escaping death or mutilation.
There may remain the plea that a prolonged campaign is necessary in
order by exhaustion to compel the enemy to evacuate some territory that
he may have wrongfully occupied. The inevitable answer to such a plea
would be that if a war had arrived at a stage in which there was a clear
possibility of coercing the enemy by a process of exhaustion, that
possibility, if it were well-founded, would certainly not have escaped
the intelligence of the enemy, who would consequently be prepared to
save his face by coming to terms. The evacuation of the occupied
territory, or whatever it is that was to be achieved by the coercive
exhaustion of another year or two of battle, might then be obtained by
negotiation at once, and at the cost of a certain amount of paper and
ink, instead of being forced on a revengeful and embittered opponent by
the expensive process of killing young men, a process which has the
disadvantage of working both ways.
The conclusion of these general considerations seems to be that all the
arguments that are likely to be put forward in the course of a war in
order to excuse and ensure its continuation, are only excuses to gain
time, put forward in hope that the chances of a further campaign may
enable the government concerned to retrieve some apparent advantage out
of the disastrous muddle through which they drifted into the first
declaration of war. Having drawn the sword in a moment of embarrassment,
they have now jolly well got to pretend that it was the right thing to
do, and are not going to sheathe it till they see a chance of proving
that they are glad they drew it. In short, there comes a point in all
modern wars in which the belligerents are fighting for nothing at all,
except for a more or less advantageous position from which to discuss a
way to stop fighting.[85]
FOOTNOTES:
[Footnote 83: Spinoza, _Ethica_, IV, _praefat. ad init._ Humanam
impotentiam in moderandis et coercendis affectibus servitutem voco.]
[Footnote 84: See above, § 2, on "defensive" war, and compare a passage
from Mr. C. Grant Robertson's letter in _The Times_ of August 15,
1916:--
"Bismarck repeatedly and explicitly in the Reichstag justified the wars
of 1864, 1866, and 1870 as 'defensive'--i.e. as not 'willed' by Prussia.
On the contrary, they were wars 'forced' on a peace-loving State denied
its 'rights' by Denmark, Austria, and France. The argument, briefly, on
Bismarckian principles is this. Prussia's policy is an
'_Interessenpolitik_'--a policy of 'interests.' An 'interest' confers a
'right.' The satisfaction of 'national interest' is therefore the
achievement of 'national rights.' If these 'rights' can be achieved by a
compromise--i.e. by the complete surrender of Prussia's opponents to the
demands based on these 'rights'--that is a proof of her peace-loving
nature. But if her opponents refuse, then the war by which the 'rights'
are secured is a war 'forced' on Prussia. She has not 'willed' it. It is
a 'defensive' war to prevent the robbery of her 'rights' by others;
Bismarck, not without difficulty, converted his Sovereign to this
argument. In each case--1864, 1866, 1870--William I was ultimately
convinced that Denmark, Austria, and France were resisting the 'rights'
of Prussia, and that war to secure them was 'defensive,' 'forced' on the
King, and just. The successful issues confirmed William's conscience and
proved that Bismarckian principles had the Divine sanction."]
[Footnote 85: This attitude is well illustrated by the history of the
Crimean War. In January, 1855, "peace seemed impossible until some of
the disgrace was wiped away, and the pacificists, Cobden and Bright,
were burned in effigy.... The prolongation of the war called out no
protest from the public." Yet "the popular war produced an unpopular
peace." When after another year of fighting our French allies finally
insisted on peace, "'there was no indication,' said a Frenchman, 'as to
which was the victor and which the vanquished.' Reviews and
illuminations could not obscure the truth; Britain had sacrificed lives
and treasure and obtained little in return."--Alice Green's Epilogue to
J. R. Green's _Short History of the English People_.]
§ 7
Physical Force in a Moral World
The explanation of all this seems to lie in the simple fact that it is
for ever impossible to solve questions of moral or political principle
by the expenditure of physical force. Anyone at all conversant with
philosophical thought, if I may adopt a simile used by Mr. H. G. Wells,
"would as soon think of trying to kill the square root of 2 with a rook
rifle." Physical violence can only solve purely physical problems. But
as man no longer exists, if he ever did exist, in the completely
unsocial "state of nature,"[86] the relations of one individual with
another are no longer purely physical: their position as members of one
society has given them a moral relation, questions affecting which can
only be settled by reference to the judgment of the society as a whole.
Within the limits of the State this fact is already clearly recognised
by the common voice of public opinion. If Smith quarrels with his
neighbour Robinson, because Smith's old English sheep-dog is suspected
of having scratched up Robinson's lawn, and Smith says the poor dog
would never do such a thing, and anyhow Robinson had no business to
leave his back gate open, while Robinson declares that that brute is
becoming a damned nuisance, and so provokes Smith to express a hope that
now perhaps that grass of Robinson's won't want so much godless mowing
on Sunday morning: if two neighbours, in short, have a difference of
opinion they both know perfectly well that the rights of the argument
can never be decided by a free fight in the middle of the road, even if
one of them happens to be a heavy-weight champion. Moreover, if they do
come to blows it is perfectly certain that the opinion of the whole road
will be against them, and that the Law, to which they might have
appealed in the first instance, will intervene as the embodiment of that
opinion. The street fight is clearly recognised as not only futile but
immoral; it not only settles no questions of principle but it
constitutes a breach of the moral relation between two members of one
community; it is become merely a rather sordid exhibition of irrelevant
physical facts. The average citizen of England or Germany would never
think of encouraging a fight between two sides of a street: why does he
not recognise with equal directness the futility and immorality of a
fight between two sides of a continent?[87] It is only because public
opinion has not yet effectively realised that the moral sphere includes
not only the citizens of one city and the cities of one nation, but the
nations of a continent and the continents of the world. But it is a fact
that the moral sphere does include the whole of humanity, who are
colleagues in the task of civilisation, inspired by the
twentieth-century corollary of gloomy nineteenth-century religious
agnosticism, the cheerful corollary that it is Man's duty rather than
God's to improve the habitable earth. The truth of this fact is already
recognised by the better thought of all the nations concerned, and there
is no reason why it should be withheld any longer from the people who
suffer most by its suppression. As soon as public opinion is allowed to
grasp this truth--and it is only too willing to clutch at any
generalisation that is emotionally encouraged by its governors--there
need be no difficulty at all in embodying that opinion in some form of
international government: for, as Rousseau might have said, where
there's a General Will, there's a way. As a matter of fact the way has
already been admirably mapped by several parties of surveyors.[88]
On the constitution of an International Authority, even on the general
aspiration of Europe towards some form of supernational judicature, war
will cease to have any more attraction or justification than the street
brawl. For war is actually in the community of nations what the street
fight is between individual citizens. War is futile, because it can
settle no questions of principle; it is immoral, because it is an
offence against the membership of a moral community. There is abundant
evidence in Blue Books and in the overt acts of Germany that war
releases and encourages the elementary brutality of the individual which
is normally inhibited by the consciousness of social relations. I have
tried to show in a former chapter that war serves the lowest interests
of a parasitic commercial class at the expense of the better part of the
community. War fosters at the same time the basest elements in the
individual, and the basest individuals in the community. War is a crime
against the peace of the people.
FOOTNOTES:
[Footnote 86: _Supra_, I, § 5.]
[Footnote 87: Mr. Gilbert Cannan has noted somewhere that "a 'straight'
fight between Great Britain and Germany will be like a fight between two
drunken women in a slum."]
[Footnote 88: See, for example, the quite definite and complete report
on _International Government_, published by the Fabian Society (1916):
and compare Mr. J. A. Hobson's book _Towards International Government_,
and Mr. H. G. Wells' _The World Set Free_.]
§ 8
Imperialism and Capitalism through War and Trade the Enemies: Socialism
to the Rescue
It is the most remarkable fact in political bibliography that all the
Utopias worth mentioning have been written by Socialists. The fact is
not surprising to anyone who has considered that the Socialists are the
only political party in the State who ever attempt to look more than a
dozen years ahead. The ordinary politician steers the ship by keeping a
look-out for rocks and squalls, and does not trouble to make for any
distant landmark. Only the Socialist looks ahead to a harbour attainable
perhaps in a hundred years, from which a happier voyage may be begun.
Only the Socialist seems to realise that in the world conceived, as
modern thought must conceive it, as a continuous process, Government
rather than Trade, Science and Art rather than Industry are the chief
activities of the citizen. Government is nothing less than the
organisation of the State to take its place among the other States of
the world. It includes of course education, being itself a form of
education: for the State must be educated to fulfil its duty to other
States, just as the citizen must be (and more or less is) educated in
duty towards his neighbour. The first task of education is naturally to
eliminate violence, to inhibit, by inducing in the young citizen the
recognition of mutual rights, those acts of ferocity by which primitive
man instinctively expresses his solipsistic passions.
But where, it may well be asked, is the authority which is to begin the
neglected education of the nations of Europe? Where is what Mr. Boon (or
Mr. Bliss) would call "the Mind of the Race"? At present the only body
of doctrine with any conception of the nature of government for the
collective benefit of humanity is International Socialism. It is the
International Socialists who must lead the attack on War, if only
because the only instigators of war themselves form an international
body in so far as the only occasions for war are contrived by the
Imperialists and Capitalists who are to be found in every nation. To
Socialism belongs the duty of educating Europe against Imperialism, as
it has begun to educate the nation against Capitalism; for Imperialism
is only an allotropic form of Capitalism, manifesting itself in the
exploitation of fellow-nations instead of in the exploitation of
fellow-citizens. The first step in that education must be the fight not
only against "private" or profiteering Trade, but against "private" or
profiteering War: and "private war" is every war that is not authorised
by an International Authority and waged by an International army.
I seem to have heard it said before that there is only one way to break
the chains that bind us: and that Amalgamation is the mother of Liberty.
The need for the education of Europe is a call to the Trade Unionists
and Fabians and Collectivists and Guildsmen of every Nation:
SOCIALISTS OF THE WORLD
UNITE.
* * * * *
APPENDIX TO CHAPTER III
SOME TYPICAL WAR PROFITS
I. _The Manchester Guardian_, January 3, 1916:
BRITISH INDUSTRY IN WAR
The first full calendar year of war has been a period of unparalleled
industrial activity and, generally speaking, prosperity in this country.
Heavy losses and bad times have been encountered in a few important
industries, but these are balanced by unprecedented profits made by a
large variety of industries, whether directly or indirectly affected by
the war. One frequently finds that the neutral visitor carries away with
him an impression of industrial England as one great living arsenal.
That is not surprising, as since July last the Munitions Ministry has
erected (or improvised) and started a large number (it is not
permissible to say how many) of State munitions works, and it has also
mobilised the whole engineering resources of the nation to such an
extent that in the first week of December no fewer than 2026
manufacturing establishments had been declared "controlled firms."
But it would be a mistake to suppose that, while war manufactures
prospered, all other industry languished and decayed. To prove the
contrary and show that only here and there were there heavy losses, we
may quote some figures compiled by the _Economist_, which show that 720
industrial concerns publishing their reports during the first nine
months of 1915, and having a capital of £531,678,701, made profits
amounting to £52,881,300, or under 2-1/4 millions less than in the
previous year (which in the case of almost all the reports was a year
before the war).
Dissecting these figures, we find that not only iron, coal, steel, and
shipping companies report enormous profits, but that increased earnings
were shown by breweries, gas, rubber, oil, and trust companies, and
others. The large exceptions which depressed the total profits were
textile companies (other than those engaged on war contracts), catering,
and cement companies. Shipping leads the van of prosperity owing to
phenomenal freight rates, while iron and steel and shipbuilding, as
direct and established purveyors of armaments, are close behind. As
showing the industrial tendency of the year, one may quote the remarks
of a trust company chairman at a recent meeting. Of 150 home investments
possessed by his company, he remarked that a hundred had since the war
yielded the same as in the year before war, while thirty had paid less
and twenty more.
Into the circle of munition producers have been drawn cycle and motor,
machinery, electrical, and many other branches of manufacture. Of other
industries driven to fever heat by the war may be mentioned woollen and
leather factories. Secondary effects of the war also produced a boom in
several unexpected quarters. For instance, the high wages earned by war
workers, and too generously spent in a vast number of cases, led to a
strong demand for cheap furniture, pianos and many types of household
goods which in normal times are usually out of reach of the purse of
most wage-earners. But one trouble has beset all industries in common--a
shortage of labour, which cannot but grow with every increase to the
numbers of men drafted from the ranks of productive industry into the
army or the munitions works. From all quarters comes the tale of orders,
both from home and from abroad, that cannot be accepted. In the case of
foreign orders that have to be refused, the labour shortage has what one
fears may be lasting consequences. For custom once diverted to America
or elsewhere is not easily regained.
2. _The Manchester Guardian_, March 3, 1916:
MORE GREAT PROFITS
HOLT LINE'S ENORMOUS SURPLUS
The China Mutual Steam Navigation Company (Holt Line) has had a greater
year than ever. It has been supposed that regular liners were getting
little benefit from the boom in freights, but a profit of £591,005, as
against about £294,000 in 1914 and £386,418 in 1913, can only be
explained by a very large participation in special war-time gains. The
dividend and bonus on the ordinary shares make 106 per cent for the
fourth year in succession, and a still larger sum is being kept in hand,
£200,000 being put to the reserve, as against £50,000 for 1914 and
£100,000 for each of two years before that, and the balance forward is
raised from £81,014 to £201,367. Most of the Company's capital, however,
only bears 6 per cent interest. The ordinary shares (which we believe
are held privately) only amount to a little over £83,000.
3. _Pall Mall Gazette_, September 24, 1915:
WAR PROFITS
The other taxes are accepted by the public and traders alike as
inevitable, but special interest is being taken in the excess war
profits tax. That Mr. McKenna is likely to find his estimate of
£30,000,000 largely exceeded is admitted. The _Daily Chronicle_
publishes a table in which the City Editor compares the last profits
announced by some of our greatest undertakings, covering a
considerable portion of the war period in most and some portion of it in
all cases, with the average of the previous three years. It will be seen
that in every instance the war has brought greatly increased prosperity.
Last Average
Profit. Previous Increase.
3 years.
£ £ £
ARMSTRONG WHITWORTH 802,000 624,000 178,000
(Engineering, Shipb., etc.)
WM. BEARDMORE 219,000 185,000 34,000
(Engineering, Shipb., etc.)
JOHN BROWN 586,000 347,000 239,000
(Engineers, Shipbuilders, etc.)
BEYER PEACOCK 83,000 35,000 48,000
(Locomotive Builders)
BRUNNER MOND 824,000 770,000 54,000
(Alkali Manufacturers)
CAMMELL, LAIRD 238,000 147,000 91,000
(Iron, Steel, and Shipb.)
HAWTHORN LESLIE 202,000 102,000 100,000
(Sh'b. & Marine Engin'ring)
KYNOCH'S 153,000 114,000 39,000
(Explosives)
LAMBERT BROS. 142,000 84,000 58,000
(Coal Exporters, etc.)
POWELL DUFFRYN 422,000 279,000 143,000
(Collieries)
SAMUEL FOX 66,000 39,000 27,000
(Engineers)
SPILLERS & BAKERS 367,000 140,000 227,000
(Millers)
VICKERS, LTD. 1,019,000 809,000 210,000
(Eng. and Shipbuilding)
This table indicates that the Chancellor may expect to receive far more
than the sum he estimated from the war profits tax.
4. _The Manchester Guardian_, Feb. 28, 1916:
COAL PROFITS NEARLY DOUBLED
The tale of colliery war profits is continued by the report of North's
Navigation Collieries (Glamorganshire). The output for 1915 was actually
less by 87,810 tons (1,141,900 tons against 1,229,710), but the profit
was nearly doubled--£130,071 against £65,578. With the £10,496 brought
into the account the directors had their biggest total in recent years
available for distribution. The ordinary shareholders get 10 per cent
and a bonus of 2-1/2 per cent, which is the best payment since the 15
per cent paid for 1907. Advantage is taken of a prosperous year to place
£35,000 to the reserve fund, which has been rather overlooked recently,
only one allocation of £20,000 having been made in four years. It now
stands at £155,000, against £650,000 of share capital. For depreciation,
with regard to which item substantial provision is made each year,
£15,000 is written off. This leaves £10,567 to be carried forward. The
Company has the reputation of being well managed, and its coal
properties are regarded as being very valuable. The recently opened St.
John's pits are being developed satisfactorily, it appears, a further
increase in output being shown.
Despite a decrease in output of nearly 400,000 tons, the Powell Duffryn
Steam Coal Company is enabled to show a profit for 1915 of £438,799, as
compared with £422,204 for 1914 and £364,421 for 1913. The usual 20 per
cent is distributed on the ordinary shares, free of income tax, and last
year's allocation of £50,000 to the reserve fund is repeated. In
addition, the reserve for income tax benefits to the extent of £50,052,
and there remains £120,236 to carry forward. The decrease in output, it
should be noted, is due to the enlistment of the miners, and its
restoration to the normal and probable increase after the war should
balance the decline in profit that may be expected to attend the
decreased demand.
5. The Times, May 19, 1916:
SOAPMAKERS' "RECORD" PROFITS
Presiding yesterday at the annual meeting of Joseph Watson and Sons
(Limited), soapmakers, Leeds, Mr. Joseph Watson said that the company's
profits for the year amounted to £122,000, or £19,000 in excess of any
previous year's profits. Their turnover had largely increased because
they were now supplying soap to France, Belgium, Scandinavia, and a
small amount to Spain and Italy. It was not a question to-day of getting
orders; it was a question of refusing them. They had at the present time
three months' orders on the books.
6. _The New Witness_:
THE SCANDAL OF WAR PROFITS
It is a sinister and deplorable fact--one of the most ironical with
which the continuance of the War has yet confronted us--that there has
grown up in Great Britain a number of firms and businesses to whom a
successful prosecution of the campaign would mean ruin, and who have an
actual vested interest in the indecisive continuance of hostilities.
This is due entirely to the lack of grip and resolution which the
Government have displayed in dealing with the ugly phenomenon of War
Profits. We know, of course, what happens to those profits at present.
Half is taken by the State: half passes to the firms who are getting
"rich quick" out of its necessities. In theory, it is an anomalous
arrangement, indefensible in logic, and opposed to every canon alike of
justice and of taxation. In practice it works out in the way we have
indicated: that certain privileged firms and individuals are amassing
huge fortunes out of the gravest crisis through which the nation has
passed, and which will pinch us all before it is over.
Let us give some examples of the mammoth profits that some of these
concerns are making. There is first of all the famous old English firm
of Levinstein--Messrs. Levinstein of Manchester--to be considered. This
"all-British" concern has not done badly out of the terrible situation
through which we are slowly toiling. While mere vulgar English Tommies
have been dying in the trenches or have returned incapacitated to
England--to find that their country cannot afford them a
pension--Levinsteins have been pocketing several thousands of that
country's cash. Levinsteins' are dye-makers, and in 1914-15 they made a
profit of £80,000 _on a capital of_ £90,000: a profit large enough to
make the mouth of the deceased usurer Kirkwood dry with envy. But, while
our legislature passed laws to restrain the usurer in his exactions, the
"war profiteer" has no restriction placed on him. His workmen can, in
certain cases, be fined or sent to prison if they absent themselves from
work, and hundreds have been proceeded against under the Defence of the
Realm Act. But the profiteer himself is immune! It is childish to say
that the State can recover half of the profit he has wrung from the
country's necessity. What right has he to the other half? In the case of
Levinstein, this £80,000 profit enables the company to pay 14-1/2
years' preference dividend, to distribute a dividend of 30 per cent on
its ordinary shares, and to write off £21,000 for depreciation! It is
merely fatuous to pretend, or to endeavour to pretend, that the
appropriation of half these profits squares matters between the
community and the British firm in question.
As with Levinstein, so with other firms. Messrs. Cammell, Laird & Co.
averaged profits of £146,000 for the three years before the war. Since
last year those profits have risen to £237,000. Those profits, of
course, are subject to war profits taxation. But most manifestly that
taxation is utterly inadequate. So it is in the case of Messrs. W.
Beardmore, whose profits rose from £184,000 (three years' pre-war
average) to £219,000; of the British Westinghouse Co., which rose from
£56,000 to £151,000; and of Beyer Peacock's, which increased from
£57,000 to £109,000.
In all these cases the deduction of 50 per cent by the Government is
entirely inadequate and utterly misleading. It is at once an admission
that the firm in question has no right to amass huge profits out of the
welter and tragedy of the European War, and that the State is content to
stultify itself by surrendering the other half.
Many of these profits have been made by covering rises in raw material
far in excess of the actual increases. Many have been wrung from the
poor and the needy, who are now being enjoined by the Government to eat
less meat. Messrs. Spillers & Baker, of South Wales, increased their
profits from an average of £140,000 (three years' pre-war average) to
£367,000 in 1914-15. We do not blame them. The rise in price was beyond
their control. They could hardly help benefiting. But it is mere madness
for the Government to leave them in possession of these vast accretions
of wealth. Firms that paid 8 per cent before the war, now paying 22-1/2
per cent (such as Messrs. Richard Dickeson & Co., the Army contractors)
are able to pocket tens of thousands that ought to go to strengthen the
resources of the nation. Others, like the Mercantile Steamship Co.,
increase their dividend from 20 per cent to 35 per cent; and some are
able to pay dividends actually larger than the capital of the company
itself!
It is ludicrous for the Government to allow this condition of affairs to
continue. Their course is quite clear. They should limit profits to the
average of three years before the war, and add at the most 5 per cent.
Anything short of this is a betrayal of the national interests to
private firms.
7. _The New Statesman_, March 25, 1916:
An innocent person might think that when a manufacturing company is
faced with an enormous rise in the cost of the principal commodity it
consumes, its profits would be diminished. Some law must be in operation
which has escaped the attention of economists, for so far from this
being the case, what appears to happen is that the profits of
manufacturers rise in a greater degree than the price of the raw
material. Thus, so far from being hit by the enormous rise in the price
of flour, Peek, Frean & Co., the well-known biscuit manufacturers, made
a net profit of £107,478 last year, as compared with £99,578 in 1914,
and £98,607 in 1913. After paying the usual 5 per cent on the £300,000
of preference shares no less than 25 per cent is paid on the £230,000 of
ordinary share capital, which has been issued. This company raised its
money very cheaply from the public, which paid 102 per cent for its 4
per cent debenture stock and par for the 5 per cent preference shares.
The investing public does not benefit by the big dividend on the
ordinary shares. These were never offered to the public, but are
privately held.
Another shipping company, sister to the Court Line, mentioned in these
notes last week, has issued its report. This is the Cressington
Steamship Company, which owns two modern tramp steamers of slightly over
7,000 tons each. The company was very fortunate in that one of these
vessels was delivered in February, 1915, it having been contracted for
at pre-war prices. The profits for the year amounted to £50,015, as
compared with £6,861 in 1914 (when only one vessel was trading). The
dividend for the year is 15 per cent, £7,072 is allocated to
depreciation, £22,000 for special war profits and income-tax, whilst
about £3,000 is being carried forward. The financial position of the
company is such that if its ships were sold at £2 15s. per ton,
shareholders would receive the return of their capital in full. On
present prices, however, they would probably fetch over £15 per ton. The
shares are now quoted at 28s.
The Bengal Iron and Steel Company, whose report has also been issued
during the week, has had an interesting career; it works large iron ore
and coalmining areas in Bengal. At first the company did well, but then
it went in for an unfortunate steel venture and fell into arrears with
its preference dividend. This was overcome, and during the past few
years the company has done well, particularly from its coal business.
The report for the year ended September 30th, 1915, shows a working
profit of £144,913, as compared with £79,200 during the previous year.
This considerable improvement enables the company, after writing off
various old items, to place to a general reserve £20,000, and to declare
a dividend payable quarterly of 24 per cent on the £224,850 of ordinary
shares, which compares with 12 per cent a year ago. By way of a change,
the report states that the trading results would have been even better
had war conditions not prevailed.
EMIL DAVIES.
8. _The New Statesman_, May 27, 1916:
Markets have displayed unwonted cheerfulness during the past week, and
all sorts of peace rumours are in circulation. It is more than likely,
however, that it is the firmness of the market which is responsible for
the rumours, and not _vice versa_. There is a steady stream of orders
from the Midlands and the North, where people are making money, and
these have the effect of putting up prices in several of the markets.
The Brazilian Funding Loan, which was recommended here on the 29th April
at 74, has been noticeably firm, and is now 77-1/4. It still appears to
be the cheapest Government Loan. Brazilian securities are attracting
more attention, and Brazil Traction Common, which a year ago was below
50, now stands at 64. There has been a large business in Castner Kellner
on the working agreement between that chemical company and Brunner, Mond
& Co., the shares having jumped four or five shillings to their present
price of 69s. 6d. Precisely a year ago they were recommended in these
notes at 66s. 10-1/2d. Shipping shares have been exceptionally firm;
Court Lines have risen another few shillings to 34s., the large business
in them being probably due to the fact that they are one of the few
shipping shares which can be obtained. Rubber shares are equally firm.
Nobel's Explosive Company has just issued its report for last year,
showing a profit of £529,738 _after_ providing for excess profits duty.
The dividend is 15 per cent, free of income-tax, or 5 per cent more than
last year. This increase in the dividend came as a surprise to the
market, and the price of the shares (which are a favourite investment in
Glasgow) jumped from 31s. to 38s. 3d.
The profits of the Oceanic Steam Navigation Company (the White Star
Line) for last year have attracted a good deal of attention. They were
stated as being £1,968,285, as compared with £887,548 in 1914 and
£1,121,268 in 1913, which was the Company's record year; but the figure
given for 1915 does not indicate the full profit, for it is arrived at
"after providing for excess profits taxation and contingent
liabilities." Replying to a question asked in the House of Commons by
Mr. W. C. Anderson, Captain Pretyman stated that the Company informed
him that the profit mentioned was before deduction of debenture interest
and depreciation. Captain Pretyman added that the sum divided as
dividend was £487,500, the same amount as in the year 1913 before the
war. Where people are protesting against large war profits it may, at
first sight, appear an adequate answer to point out that a Company is
not paying out more in dividends than it did in the year preceding the
war. As a statement of fact it is perfectly correct, but it has no
bearing upon the amount of profit that has been made, as the following
calculation will show. We now know that the 1915 profit shown in the
accounts is _after_ allowing for excess profits taxation, deferred
repairs, contingent liabilities, debenture interest and depreciation.
Since 1913 the Company has increased its debenture issue, and last year
had to pay in debenture interest £109,536, as compared with £65,211 in
1914. How much has been placed on one side for depreciation before
showing the profits can only be known to very few people, but the amount
the Company must have put on one side for excess profits taxation must
be at least half a million, and possibly a great deal more. The actual
profits for last year were therefore probably in the neighbourhood of
three millions, if not more. As indicated above, out of the £1,968,285
shown as profit, only £487,500 is paid out in dividends, the remainder
going to various reserves. The dividend works out at 65 per cent, but
all goes to the International Mercantile Marine Company, the
much-talked-of American shipping trust associated with the name of the
late J. Pierpont Morgan, which holds all the Ordinary Shares. The trust
was in a bankrupt condition prior to the war, but the present state of
affairs is radically altering its position. It must be annoying to the
American holders that a large slice of the profits of an American-owned
concern has to go to the British Government in the shape of war
taxation.
9. _The New Statesman_, June 24, 1916:
Another firm which has apparently benefited by the war is Ruston,
Proctor & Co., the well-known Lincoln manufacturers of agricultural
implements. A final dividend of 5-1/2 per cent is declared, plus a bonus
of 2 per cent, making 10 per cent for the year, which still allows the
Company to place £45,000 to reserve and to carry over £16,300. This
dividend is 3 per cent more than was paid last year, and is the highest
in the twenty-six years' history of the Company. Shipping shares remain
firm, and it is almost impossible to purchase any of the best shares. As
an illustration of the profits that are being made, the Nitrate
Producers' Steamship Company's accounts for the year ended April 30th
last show a gross profit of £404,022, as compared with £151,905 and
£135,986 in 1914 and 1913 respectively. The dividend is 25 per cent,
free of income tax, £100,000 is placed to reserve, £200,000 to a special
fund for excess profits tax, income tax, etc., £30,000 is added to the
insurance fund, and the carry forward is increased by some £7000. The
Company owned a fleet of ten steamers, which has, however, been reduced
to five by the sinking of one last September by an enemy submarine and
by the sale of four vessels. A new vessel is under construction, and
should be ready for delivery in August. The capital of the Company
consists of £200,000 in Ordinary Shares and £200,000 in 5 per cent
Cumulative Preference Shares.
10. _The New Witness_, June 15, 1916:
WAR PROFITS AND THE GOVERNMENT
It is essential that a determined effort should be made to rouse the
nation to a sense of the gross and scandalous injustice of the huge
profits that are at present being "earned" by certain firms piling up
wealth which is really amazing to contemplate. This is not mere empty
rhetoric; the figures support the description up to the hilt. Let us
take the case of five well-known companies, all engaged in "war work,"
and see to what account they have turned our soldiers' sacrifices:--
FIRMS. PROFITS.
1913 1914 1915
£ £ £
Cammell, Laird 171,700 235,500 301,500
Curtis & Harvey 48,100 77,800 143,800
Projectile 14,000 40,400 192,700
Webley & Scott 9,500 16,400 61,300
Thornycroft 13,000 107,640 267,333
(6 mos.)
These figures can only be described as staggering--staggering, that is,
to anyone who cherishes a faint, lingering belief that "equality of
sacrifice" is to be a reality and not merely a bitter jest. Look for a
moment at the tale that these profits show! The Projectile Company has
multiplied its 1913 profit _thirteen times over_! Five or six years ago
its affairs were in so parlous a state that 19s. had to be written off
as lost from each 20s. share. Now, as Mr. Charles Duguid reminds us, "it
is paying a first dividend of 50 per cent and is returning to the
shareholders 3s. 6d. out of the 19s. they regarded as lost." The return
on the shares, according to the same financial authority, is 400 per
cent!!!
Look at the case of Thornycrofts. The profits for the first half of 1915
are twenty times as big as the profit for the whole of 1913--an
increase, as Mr. Duguid reminds us, _of 3800 per cent upon the year_, a
year that will spell blank financial ruin, impoverishment and
destitution to the families of thousands and tens of thousands of our
fighting men!
Thornycrofts are by no means peculiarly fortunate; Nobels, for instance,
have managed to earn quite a tidy little profit. Their net profit for
1915 comes out, we learn, at over half a million sterling (£529,800),
exclusive of £213,900 brought forward out of the large profit of the
preceding year, and this makes the total amount available for
distribution as much as £743,700. Even after paying a dividend of 10 per
cent and a bonus of 5 per cent, making 15 per cent, all free of income
tax, the Company has still £424,700 unallocated. In its most prosperous
year, 1913-1914, the net profit of the Nobel Dynamite Trust did not
amount to more than £381,300. We have, we need hardly say, no feeling
against Nobels or Thornycrofts or the Projectile Company. We only want
fair play in this matter. If this aggregation of profits is not stopped
the wealth of England will be in the hands of men who will regard the
triumphant conclusion of the War as spelling ruin to themselves and who
will see in victory only the cessation of profits that in normal times
they have never dared to contemplate.
The remedy for this is simple. The Government have refused to the
workman the right to extort unearned increment out of the country in its
dire necessity. The workman may not strike or cease work or even change
employment without the permission of the State. Assuredly the State has
the right to exact that obedience from him. But it is essential that it
should, and at no distant date, lay its restraining hands also upon the
employers who are earning these huge dividends, otherwise we shall have
enacted in England the tragedy that we have seen in Ireland. We shall
have a Government without moral authority, a Government which will,
therefore, be perpetually embarrassed in the conduct of war.
11. _The New Witness_, June 15, 1916:
WILLIAM CORY & SON
This famous coal company has taken every advantage of the demand for
coal, and can show a record profit. After providing for excess profits,
the balance of profit is £453,136, or £237,808 more than last year. As I
have again and again pointed out, I do not think the Government should
allow such huge profits to be made in war time. The coal trade is in a
few hands, and firms like Corys may be said to control it. The directors
content themselves with raising the dividend 5 per cent to 15 per cent;
but they place £100,000 to reserves, making them £500,000; £30,000 goes
to staff pensions and £25,000 to a war fund for employees. The carry
forward is raised £30,740 to £88,969. The steamers, tugs and barges are
now to be formed as separate companies; and the French business is also
to be transferred to a subsidiary. The balance-sheet shows creditors up
£204,971, presumably to meet the excess profits liability. Debit
balances have increased £509,840, and now include Treasury bills. War
loans have been increased £280,652, and the total assets are up
£451,183, at £4,541,601, and have earned 10 per cent. When all creditors
have been paid the quick assets amount to £930,654, and amply protect
the debentures, £900,000 which are an admirable security. I do not
suppose the present Ministry will do anything to control the profits
made out of the War by those who run the coal trade; and, therefore, we
may expect that 1916-17 will be as good a year as that just ended. But I
am not in agreement with a policy of _laissez-faire_ in war time unless
the policy is carried out stringently.
HOLBROOKS