TARIFFS AND COMMERCE THE WAR CAUSES
War with Russia was Inevitable--Finance and Tariffs made Germany
great--Commercial War--How Germany loses in the United States--The
Tariff Danger.
For the causes of this most audacious war of 1914 one must study, not
only Germany and her imperial policy, but most particularly her
relations with Russia. These relations are very little understood in
America, but they become vital to us when open to public view.
Disregarding all the counsels of Bismarck and the previous reigning
Hohenzollerns, the present Kaiser has steadily offended Russia. War
with her within two years was inevitable, irrespective of any causes in
relation to Servia. Russia knew this and was diligently preparing for
it. Germany--the war party of Germany--knew it and with supreme
audacity determined through Austria first to smash Servia and put the
Balkan States and Turkey in alignment with herself for this coming war
with Russia.
Sergius Witte is one of the great statesmen of Russia. He formulated
the programme for the Siberian railroad and Russian Asiatic
development. The party of nobles opposed to him arranged that he
should receive the humiliation of an ignoble peace with Japan, under
which it was expected that Russia would have to pay a huge indemnity.
But when Witte arrived at the naval station at Portsmouth, New
Hampshire, to make the famous treaty with Japan, his first declaration
was, "Not one kopeck for indemnity." He won out and returned in
triumph to Russia.
But during the progress of the Japanese war Germany thrust her
commercial treaties upon St. Petersburg. Goods from Russia into
Germany were taxed while German goods went under favorable terms into
Russia, with the result that Russia has had a struggle now for ten
years to keep her gold basis and her financial exchanges.
It was Witte who was sent to Berlin to protest against these proposed
treaties and secure more favorable terms. Witte made his protest and
refused to accept the German demands. Then suddenly he received
peremptory orders from the Czar to grant all the demands of Germany.
The Czar declared Russia was in no condition to have trouble with
Germany. These commercial treaties expire within two years. Russia
many months back proposed the discussion of new terms. Germany
responded that the present treaties were satisfactory to her and he
should call for their renewal.
This meant either further humiliation to Russia or war. Russia had
already suffered the affront of being forced by Germany at the point of
the bayonet to assent to the taking by Austria of Bosnia and
Herzegovina in violation of the Treaty of Berlin. The Czar realized
many months ago that Russia must now fight for her commercial life.
She would not, however, be ready for the war until 1916.
Let Americans consider what this means--a German war over commercial
tariffs--and see what, if successful in Europe, it would lead to.
The German nation is a fighting unit under the dominion of Prussia, the
greatest war state, not only of the empire, but of the world. Having
welded Germany by the Franco-Prussian war into a nation with unified
tariffs, transportation, currency, and monetary systems, Prussia has
been able to point to the war as the cause of the phenomenal prosperity
of Germany.
It is a popular fallacy in Germany that militarism makes the greatness
of a nation. Germany's prosperity did not begin with the war of 1870.
This was only the beginning of German unity which made possible unified
transportation and later unified finances and tariffs. Several years
after the war, France, which had paid an indemnity to Germany of a
thousand million dollars, or five billion francs, was found, to the
astonishment of Bismarck, more prosperous than Germany which had thus
received the expenses of her military campaign and a dot of Spandau
Tower war-reserve moneys.
In 1875 came the great Reichsbank Act, which consolidated all the
banking power of the empire. Then came her scientific tariffs which
put up the bars here, and let them down there, according as Germany
needed export or import trade in any quarter of the earth. The German
people, on a soil poorer than that of France, worked hard and long
hours for small wages. But they worked scientifically and under the
most intelligent protective tariff the world has ever seen. In a
generation they built up a foreign trade surpassing that of the United
States and reaching $4,500,000,000 per annum. By her rate of progress
she was on the way to distance England, whose ports and business were
open to her merchants without even the full English income tax. She
built the biggest passenger steamers ever conceived of and reached for
the freight carrying trade of the world. She mined in coal and iron
and built solidly of brick and stone. She put the world under tribute
to her cheap and scientific chemistry. She dug from great depths the
only potash mines in the world and from half this potash she fertilized
her soil until it laughed with abundant harvests.
The other half she sold outside so that her own potash stood her free
and a profit besides. No nation ever recorded the progress that
Germany made after the inauguration of her bank act and her scientific
tariffs. The government permitted no waste of labor, no
disorganization of industry. Capital and labor could each combine, but
there must be no prolonged strikes, no waste, no loss; they must work
harmoniously together and for the upbuilding of the empire.
Germany did not want war except as means to an end. She wanted the
fruits of her industry. She wanted her people, her trade, and her
commerce to expand over the surface of the earth, but to be still
German and to bring home the fruit of German industry.
Germany has been at war--commercial war--with the whole world now for a
generation, and in this warfare she has triumphed. Her enterprise, her
industry, and her merchants have spread themselves over the surface of
the earth to a degree little realized until her diplomacy again slipped
and the present war followed--such a war as was planned for by nobody
and not expected even by herself. She was giving long credits and
dominating the trade of South America. She had given free trade
England a fright by the stamp, "Made in Germany." She was pushing
forward through Poland into Russia to the extent that her merchants
dominated Warsaw and were spreading out even over the Siberian
railroad. Her finance was intertwined with that of London and Paris.
In the United States she was the greatest loser. Here taxes were
lowest and freedom greatest. German blood flowed in the veins of
20,000,000 Americans and not one fourth of them could she call her own.
The biggest newspaper publisher in America, William Randolph Hearst,
figured that New York was one of the big German cities of the world.
He turned his giant presses to capture the German sentiment. He spent
tens of thousands of dollars upon German cable news, devoting at times
a whole page to cable presentations from Europe which he thought would
interest Germans. But the investment proved fruitless; he found there
was in America no German sentiment such as he had reckoned upon. He
could not increase his circulation, for the German-Americans seemed
little concerned as to what happened in Berlin or Bavaria.
Prussia learned what Hearst learned, that Germans were soon lost in the
United States. She studied this exodus and the wage question and by
various arts and organizations arrested the German emigration to
America. She saw to it that employment at home was more stable. It
was figured that if the German emigration could be centralized under
the German eagle it would be to her advantage. The question was where
to get land that could be made German. Europe has for some years
expected a German dash in Patagonia, and the Europeans outside of
Germany have taken very kindly of late years to the Monroe Doctrine.
In Africa and the islands of the sea the German colonial policy has not
been a success. Dr. Dernburg as colonial secretary has many a time
stood up in the Reichstag and warned the Germans that the home military
system and rules were not adaptable to colonization in foreign parts;
that Germans must adapt themselves to foreign countries and not attempt
at first to make their manners the standard in the colonies they
undertook to dominate.
While German colonies have not yet passed beyond the experimental
stage, German tariffs and German commerce have been great successes.
The population of Russia is 166,000,000 people. This is the latest
figure I gathered from those intimate with the government at St.
Petersburg. This is just 100,000,000 more than Germany. Germany
thinks she must trade to her own advantage with the people now crowding
her eastern border.
The example of America in putting up tariff bars against "Made in
Germany" has many advocates in England and in the rest of the world.
When France, only a few years ago, was angered that Italy should sign
up in "triple alliance" with Austria and Germany, she did not dare to
attack Italy with arms, but she did attack Italy by tariff measures,
and for a time Italy and France fought--by tariffs.
What might be the position of Germany if the American protective tariff
system were expanded over the earth? In the view of some people
tariffs, taxation, and armaments go hand in hand. There is a town in
Prussia that finished payment only twenty years ago on the indemnity
Napoleon exacted from it.
Can a country afford to develop an industrial system dependent upon an
outside world and then suddenly find the outside world closed by tariff
barriers?
When an American ambassador protested against Bismarck's discriminatory
treatment of American pork, the great chancellor asked, "What have you
to talk with? You have no army or navy." "No," said the American
ambassador, "but we have the ability to build them as big as anybody.
Do you wish to tempt us?" "No," said the German chancellor, "and your
goods shall not be discriminated against."
Dr. Dernburg has given the key to the German colonial military, tariff,
and financial policy. German unity in tariffs and transportation has
made German prosperity, and Dr. Dernburg, her former colonial secretary
and now in New York, says the mouth of the Rhine and the channel ports
must be free to Germany and that Belgium must come into tariff and
transportation union with Germany. Belgium is being taxed, tariffed,
pounded, and impounded into the German empire.
There is some difference in size between Belgium and Russia, but no
difference in principle with respect to their German relations.
"World power or downfall," Bernhardi put it.