GERMAN RESOURCES
The Food-Supply--War Expenses--The Copper Supply--The Call for Gold--No
Outside Resources--The Human Sacrifice.
Counting Montenegro and Servia as two nations, there are now seven
countries at war against Germany, Austria, and Turkey, and two more,
possibly three, may join in within a few weeks. If Greece enters the
battle-line, it will be ten nations against three. When Roumania and
Italy join the Allies, as is now being diplomatically arranged, Germany
will be completely surrounded, with Switzerland, Holland, and Denmark
in a measure locked in and powerless to give aid or assistance to the
Germans. Indeed, these three smaller countries and Scandinavia are
practically locked in now, with the North Sea placed in the war zone,
and Italy as well as Denmark and Holland shutting out all contraband
goods for reëxport to Germany and Austria.
Thus we have the spectacle of two nations of more than 115,000,000
people actually surrounded and besieged. Jointly these two nations in
occupation of their entire territory could feed themselves from their
own soil. They cannot be starved out, as in a besieged city, for lack
of bread, meat, or drink. But the siege at the present time is not
against the people of Germany and Austria: it is against the
war-machine of Germany. This war-machine can be starved out when cut
off from gold, copper, rubber, and oils. If these cannot be cut off,
then her men must be cut down.
Germany has raised by war-loan $1,100,000,000. She has spent this and
$500,000,000 more besides. The financial strain is shown in her paper
and exchanges at discounts outside her own border. Within her own
realm she is piling up a gold reserve in her great bank, to sustain her
expanded paper issues and her strained credit; but how is she securing
the gold?
Calling a mark a shilling, or 25 cents, let us speak for a moment of
Germany's finances in marks. After the war of 1870 she planted
125,000,000 marks in gold from the French indemnity in her war-tower at
Spandau. In June, 1913, the Reichstag voted to double this to
250,000,000 marks in gold, the addition to be known also as the Spandau
tower reserve, but to be placed in the Reichsbank and not counted in
the bank reserves. There was also to be coined 125,000,000 marks in
silver.
The whole was simply a stirrup-cup to enable Germany quickly to bound
into the war-saddle with purchase of horses, food, and the light or
perishable munitions of war which must be had at the outset and at a
time when war panic first seizes the currency and supplies of a
community.
The basis of German finance was 1,200,000,000 marks in specie, mostly
gold, in the vaults of the Reichsbank at Berlin--the central bank of
issue and bankers' deposits--with its 485 branches.
Before the war this metal reserve had been brought up to 1,400,000,000
marks. At the outbreak of the war, of course, the Spandau tower
reserve in specie must have gone into the bank, and every metal reserve
that the government could lay its hands upon likewise went into the
bank. Germany then boasted a gold reserve approaching 2,000,000,000
marks. In this month of February the bank gold reserve was put well
above 2,000,000,000.
Bank-paper issues meanwhile expanded by the billion.
The great contest in Germany is to maintain this bank metal reserve,
and it is the task of Sisyphus and of herculean proportions. Outside
of the United States, Germany has probably little, if any, credit
to-day. She must pay in gold for what she buys from without, and from
without she must get copper and oil. Lubricating oils are troubling
her now quite as much as diminishing supplies of gasolene.
To get copper for munitions of war she can produce within her own
borders 90,000,000 pounds. Of late years she has been importing from
America 300,000,000 pounds per annum, so that electrification has been
going on for many years all over Germany, and copper wires in
telegraph-postoffice work scintillate in the skyline of the German
cities. These can come down and be replaced with iron or aluminum. Of
course, the first wires to come down will be the power-transmission
wires. They can readily be replaced with aluminum, of which Germany is
the parent producer. A very fair telephone service can be maintained
with iron wires. Those who are looking for the exhaustion of Germany
on a copper basis are reckoning without knowledge of German resources.
For petrol she can substitute benzol and alcohol, with some
inconvenience. Germany is likewise the home and center of industrial
alcohol, which it manufactures from surplus products. But when it
comes to gold, there is the rub. Germany fixes a price of 20 cents a
pound for copper within her own borders, but the government will pay 30
cents a pound to anybody who will deliver it to her from the outside.
Indeed, I have heard of one lot of copper in Sweden for which 40 cents
a pound was bid if the parties could ship it out across the Baltic.
I have a friend who was bid $5 a gallon for gasolene if he would land
it within Germany, but such bids are not necessarily convincing. They
may be made to fool the enemy. There are also stories of great
underground storage-tanks of petroleum, owned by the government and
concealed in the Black Forest, that have never yet been touched. It is
inconceivable that Germany should plunge into a great war without
having resources of copper and petroleum. But for all that is bought
from without she must pay gold. No financiers know better the value of
gold as the underpinning in finance than do the Germans.
Germany was very lavish with her gold at the start, and the French
believed that it was an assistance in her military strategy. At the
battle of Charleroi 50,000 German cavalry screened an unsuspected
infantry force of 300,000 men and the French had to retreat; but that
Maubeuge surrendered 40,000 men, without more fighting, gives rise in
the French mind to suspicions of German gold. The anathemas of the
French against their commander at Maubeuge make it much safer for him
to remain a prisoner in Germany. The French caught one German wearing
a French uniform but having upon his person one million francs. Of
course, they shot him as a spy, but they were more incensed by the
bribes he carried than by his uniform.
Everybody in Germany is called upon to lend a hand in maintaining the
supply of gold for the government. The patriotism of the people was
first appealed to. Then laws were passed. People are "requested" to
give up their jewelry, to make a patriotic sacrifice of it for the
Fatherland. Cards are printed in the newspapers urging the people for
the sake of the Fatherland to bring all their gold into the Reichsbank.
So fine is the search for gold that wedding rings are given from the
fingers of the women, and iron rings are substituted as badges of
patriotism.
While every other nation on earth since 1900 has been accumulating gold
in bank reserve, England alone has stood aloof and accumulated credit
instead of gold. English financiers laugh at gold except as it can be
made useful. They prefer to hold interest-bearing promises to pay
gold. To-day England holds the keys to the world's gold outside of
Germany, and I have a suspicion that she is not averse to American
cotton going into Germany if it takes out the gold in return.
Germany is young as a banking, trading, and industrial nation. England
insists that both men and gold must be at work. In Germany the gold
reserve must be maintained and, with foreign trade cut off, men must be
idle. In England both the gold and the men are at work. Labor was
never better employed in England than to-day. The English policy in
this wartime is to fill every idle hand with productive industry; to
work the machinery day and night; and to keep the gold in England so
far as is necessary and to keep it circulating in England. The
national loss begins when you lose either the golden days of labor, the
gold of the sunshine that makes the harvest of the valleys or the gold
of finance and commerce.
When the Germans fought the French in 1870, 60 per cent of her people
lived on the land. Now, forty-four years later, she is fighting the
whole world, but only 30 per cent of her people live by the fruit of
the soil.
That is the simple answer as to why Germany, a country besieged, cannot
win against the world.
Germany has no sea-expansive ability, no foreign credit, no
international reserves to carry out an offensive warfare. Her only
possibility of success lay in a sudden and decisive march over the rich
territory of France, the possession of Paris, and a huge indemnity tax
levy as in 1871. The rest might have been easy. Hence the supreme
military necessity for a quick drive through Belgium, the only open
road to Paris. The size of the crime in Belgium has shown the supreme
financial necessity. There was no military necessity for the outrage
against the free Belgian people--only the economic necessity.
There is nothing left for Germany but a defensive warfare, a warfare
now conducted upon foreign soil just over her own borders--the burden
upon the enemy, the supply base near at hand.
Germany must reduce and conserve her shell-fire. The Krupp works have
no ability to turn out daily the number of shells that Germany was
exploding, and the United States in its own arsenals could not in a
year make a week's supply of shells at the rate at which they were
being exploded from Switzerland to the English Channel.
Greater than progress in the arts of peace is progress in the art of
war. We have read in the American papers of a most wonderful new
French shell that in bursting paralyzes and destroys life so instantly
that all the living things within so many yards are, in a flash, set
rigid in position as though manufactured for Jarley's Wax Works, the
officer standing in position with uplifted arm, yet dead, the soldier
by the window with a cigar in his fingers, a smile on his face, stone
dead.
I was informed that the effectiveness of this shell was not due to its
poisonous gases but to the fact that, instead of being filled with
bullets, it was charged with a wonderful new explosive.
For the development of the science of war twelve months in the line of
battle is worth in new inventions ten years of peaceful military study.
A three years' warfare for which the English are planning is likely to
put Germany's thirty years of "peaceful" war preparation quite in the
shade, so far as practical results are concerned.
I hear of new and more powerful mortars and cannon, wonderful new
rifles, now being manufactured by the million from secret plans, and
new guns to bring down Zeppelins, that it is not useful to discuss here.
In the first six months of this war, the German casualties must be well
up toward 2,000,000. A million of the injured may go back to the
firing line.
But in killed, seriously wounded, missing, and prisoners, Germany must
be losing at the rate of 2,000,000 men a year, and the forces of
destruction against her will increase rather than diminish. That she
can lose at this rate for three years and have anything left worth
consideration as a military power is beyond reason.
Nevertheless, when I spoke with a very prominent American, now in a
responsible position abroad, he said: "The Germans have food and
supplies, and they have an idea; and the only way to overcome that idea
is by their destruction. The South had no resources for a three-year
or four-year war, but it had an institution, an idea, and a
determination. If you will recall it, at the close of the war there
were practically no men left in the South. This war will be over when
the fighting men of Germany have been killed off."
I have so much respect for the business, mathematical, and scientific
mind of Germany, that I cannot believe she will prefer the destruction
of the German people, individually or collectively, to the destruction
of the German war-machine which set on this war.
I make the following estimate of the casualties--killed, wounded,
missing, and prisoners--of the warring powers, omitting Turkey and
Japan, up to February 1, 1915:--
German........ 1,800,000
French........ 1,200,000
Russian....... 1,600,000
Austrian...... 1,300,000
Belgian....... 200,000
Servian....... 150,000
Montenegrin... 20,000
English....... 110,000
Total....... 6,280,000
Not in a hundred years, or since the Napoleonic wars of 1793 to 1815,
has there been any war approaching these casualties now reaching in six
months to six millions.
A remarkable statistical fact concerning the war, which I ran across in
London, was a computation that the deaths in the navy were
substantially equal to those in the army, from the beginning of the war
up into November. Of casualties in the army, only about 10 per cent
are deaths. There are few wounded to be returned home from a naval
disaster. When the English army had suffered about 60,000 casualties,
making about 6000 men killed, at the same time from the naval service
6000 boys in blue had gone down to watery graves.