Finally, will not any organised exclusion of German products_The War After the War

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THE WAR AFTER THE WAR

[Illustration: Photograph - (signed) Let freedom win - D Lloyd George]

THE WAR

AFTER THE WAR

ISAAC F. MARCOSSON

CO-AUTHOR OF "CHARLES FROHMAN, MANAGER AND MAN"

AUTHOR OF "THE AUTOBIOGRAPHY OF A CLOWN," ETC.

NEW YORK: JOHN LANE COMPANY

LONDON: JOHN LANE, THE BODLEY HEAD

TORONTO: S. B. GUNDY : : : MCMXVII

BY JOHN LANE COMPANY

Press of

J. J. Little & Ives Company

New York, U.S.A.

LORD NORTHCLIFFE

IN GRATEFUL APPRECIATION

_FOREWORD_

For nearly three years Europe has been drenched with blood and rent with

bitter strife. Millions of men have been killed or maimed: billions of

dollars in property have gone up in smoke and ruin--all part of the

mighty sacrifice laid on the Altar of the Great War.

This tragic tumult must inevitably subside. The smoke of battle will

clear: the scarred fields will mantle again with springtime verdure: the

fighting hosts will once more find their way to peaceful pursuit. Time

the Healer will wipe out the wounds of war.

The world already wearies of the Crimson Canvas splashed with martial

scene. Heroism has become the most commonplace of qualities: it takes a

monster thrill to move a civilisation sick of destruction. With eager

eye it looks forward to the era of regeneration. War ends some time.

Business never ceases. Under the shock of mighty upheaval it has been

dislocated by the most drastic strain ever put upon the economic

fabric. But it will march on long after Peace will have mercifully

sheathed the Sword. Therefore the permanent world problem is the

Business problem.

This is why I made two trips to Europe: why I submit this little book in

the hope that it may point the way to some realisation of the immense

responsibilities which will inevitably crowd upon the world and more

especially upon the United States.

Peace will be as great a shock as War. Hence the need of Preparedness to

meet the inevitable conflict for Universal Trade. We--as a nation--are

as unready for this emergency as we are to meet the clash of actual

physical combat. Commercial Preparedness is as vital to the national

well being as the Training for Arms.

Nor will Commerce be the only thing that we will have to reckon with.

When you have heard the guns roar and watched horizons flame with fury

and seen men go to their death smiling and unafraid; when the pitiless

panorama of carnage has passed before you in terms of terror and

tragedy, you realise that there is something human as well as economic

in the relentless Thing called War.

It means that just as there was no compromise with dishonour in the

approach to the Super-Struggle for which nations are pouring out their

youth and fortune, so will there be no flinching in that coming contest

for commercial mastery--the bloodless aftermath of History's deadliest

and costliest war.

We have reached a place in the World Trade Sun. Unless we are ready to

hold it we will slip into the Shadow.

We must prepare.

I. F. M.

_CONTENTS_

CHAPTER PAGE

I. THE COMING WAR 15

II. ENGLAND AWAKE 40

III. AMERICAN BUSINESS IN FRANCE 71

IV. THE NEW FRANCE 98

V. SAVING FOR VICTORY 120

VI. THE PRICE OF GLORY 164

VII. THE MAN LLOYD GEORGE 210

VIII. FROM PEDLAR TO PREMIER 258

THE WAR AFTER THE WAR

I--_The Coming War_

While the guns roar from the North Sea to the Mediterranean, and the

greatest armed host that history has ever known is still locked in a

life-and-death struggle on a dozen fronts, another war, more potent and

permanent perhaps than the one which now engulfs Europe, lurks beyond

the distant horizon of peace.

Its fighting line will be the boundaries of all human needs; its dynamic

purpose a heroic rehabilitation after stupendous loss. It will be the

far-flung struggle for the rich prize of International Trade, waiting at

the end of the Crimson Lane that sooner or later will have a turning.

Embattled commercial groups will supplant embroiled nations; boycotts,

discriminations and exclusions will succeed the strategies of line and

trench; the animosities fought out to-day with shell and steel will have

their heritage in ruthless rivalries.

How shall we fare in this tumult of tariff and treaty? Where shall we

stand when the curtain of fire fades before a task of regeneration that

will spell economic rebirth or disaster for millions? Will fiscal

punishment be meted out to neutral and foe alike? Will reason rule or

revenge dictate a costly reprisal in this war after the war?

These are the questions that rise out of the dust and din of the

colossal upheaval which is rending half of the world. Directly or

indirectly they touch the whole American people, regardless of rank or

wealth. The tide of war has rolled us far upon the shores of world

affairs. We have prospered in the kinship of the nations. Will the ebb

of peace leave us high and dry amid a mighty isolation?

I went to England and France to study this problem at first hand. I

interviewed Cabinet Ministers; I talked with lawmakers, soldiers,

captains of capital, masters of industry, and plain, everyday business

men. Often the talk was disturbed by shriek of shell or bomb of midnight

Zeppelin marauder.

Through all the travail of debt and death that rends the allied peoples

runs the clear current of determination to retrieve the immense loss.

War is waste; some one must pay--we among the rest. Already the guns are

being trained for the inevitable commercial battle, which, willingly or

unwillingly, will bring us under fire. Let us examine the plan of

campaign.

But before going into the concrete details that mean so much to our

future and our fortune, it is important to understand some very

essential conditions.

First and foremost is the uncertainty of the war itself. All

prophecy--at best a dangerous thing--is purest speculation. No one can

tell how long the duel will last; how badly the loser will be beaten;

what the terms of peace will be. Yet out of these contingencies will

emerge the strong hands that will redraw the trade map of the world.

Whatever the outcome, the countries now fighting, especially the Allies,

have definitely stated the principles that must govern--for a long time,

at least--the whole realignment of commercial relations. Their way shall

be the universal way.

In the second place, be you Ally or Teuton and regardless of how you may

feel about the ethics of the Great Struggle, it must be remembered that

behind the glamour as to whether it is waged to conserve human liberty,

maintain the integrity of "scraps of paper" or to safeguard democracy,

the larger fact remains that it is a war rooted in commercial jealousies

and fanned by commercial aggressions.

Now we come to the really vital point, and it is this: When the guns are

hushed you will find that national and industrial defence among the

warring countries will be one and the same thing. The Allies learned to

their cost that the economic advance of Germany was merely part of her

one-time resistless military machine. Her trade and her preparedness

went conqueringly hand in hand. Henceforth that game will be played by

all. England, for instance, will manufacture dyestuffs not only for her

textile trades, but because coal-tar products are essential to the

making of high explosives.

Thus, Competition, which was once merely part of the natural progress of

a country, will hereafter be a large part of the struggle for national

existence.

There is still another factor: No matter who wins, peace must mean

prosperity for everybody. For the victor it will take the form of an

attempted stewardship of trade and navigation; for the vanquished it

will be the dedication of a terrible energy to the twin restoration of

pride and product.

Now you begin to see why it is up to the United States to make ready for

whatever business fate awaits her beyond the uncertain frontiers of

to-morrow. Nor have we been without warning of what may be in store for

us. Prohibitive tariffs, blacklists and boycotts, embargoes on mail and

cargo, the exclusion from England and France of hundreds of our

manufactured articles--all show which way the international trade winds

may blow when the belligerents begin to take toll of their losses.

Meantime, what are the facts?

Take the case of England. Thirty years ago she was the workshop of the

world. From the Tyne to the Thames her factories hummed with ceaseless

industry. Her goods went wherever her ships steamed, and that meant the

globe. Supreme in her insularity--at once her defence and her

undoing--she became infected with the virus of content. Her steel was

the best steel; her wares led all the rest. "Take it or leave it!" was

her selling maxim. When devices came along that saved labour and

increased production she refused to scrap the old to make way for the

new. Born, too, was the evil of restricted output. Moss began to grow on

her vaunted industrial structure. England lagged in the trade

procession.

But as she lagged the assimilative German streamed in through her

hospitable door. He served his apprenticeship in British mills; took

home the secrets and methods of British art and craft. He geared them to

cheap labour, harnessed product to masterful distribution, and became a

World Power. Before long he had annexed the dye trade; was competing

with British steel; was making once-cherished British goods.

What the German did in England he duplicated elsewhere. The world of

ideas was his field and, with insatiate hunger, he garnered them in. He

cunningly acquired the sources of raw supply, especially the essentials

to national defence; for he overlooked nothing. All was grist to his

mills. He pitched his tents upon debatable trade lands. His rivals

called it economic penetration, because he invariably took root. For him

it was merely good business.

Then England suddenly realised that Germany had left her behind in the

race for international commerce. Indifference lay at the root of this

backsliding. It was easier and cheaper to buy the German-made product

and reship it than to produce the same article at home. Sloth hung like

a chain on English energy. What did it matter? No forest of bayonets

hemmed her in; she was still Mistress of the Seas.

Meantime Germany dripped with efficiency and ached with expansion. Her

amazing teamwork between state and business, stimulated by an interested

finance, drove her on to a place in the sun. The shadows seemed far away

when the great war crashed into civilisation. Then England woke to the

folly of her blindness. The mystery of coal-tar products was shut up in

a German laboratory; the secrets of tungsten, necessary to the toughest

steel, were imprisoned in a Teutonic mill; and so on down a long list of

products vital to industry and defence.

Even those early and tragic reverses of the war did not stir the stolid

British bulk. Men fought for a chance to fight; restriction still

oppressed factory output. Red tape vied with tradition to block the path

of military and industrial preparation.

Then the Lion stirred; the sloth fell away; men and munitions were

enlisted; the strong hand was put on labour tyranny; conscription

succeeded the haphazard voluntary system. Britain got busy and she has

buzzed ever since.

When the kingdom had become a huge arsenal; when the old sex differences

vanished under the touchstone of a common peril; when the first khaki

host swept to its place in the battle line, and the grey fleets were

once more queens of the seas, England turned to the task of commercial

rebuilding, once neglected, but thenceforth to be part and parcel of

British purpose.

Animating this purpose, stirring it like a vast emotion, was the New

Battle Cry of Empire--the kindling Creed of United Dominions,

consecrated to the economic mastery of the world.

But this revival was not an overnight performance. If you know England

you also know that it takes a colossal jolt to stir the British mind.

The war had been in full swing for over a year and the countryside was

an armed camp before the realisation of what might happen commercially

after the war soaked into the average islander's consciousness.

Under the impassioned eloquence of Lloyd George the munition workers had

been marshalled into an inspired working host; with the magic of

Kitchener's name, the greatest of all voluntary armies came into being.

But it remained for Hughes, of Australia, to point out the fresh path

for the feet of the race.

Who is Hughes, of Australia? You need not ask in England, for the story

of his advent, the record of his astounding triumph, the thrilling

message that he left implanted in the British breast, constitute one of

the miracles of a war that is one long succession of dramatic episodes.

This Colonial Prime Minister arrived unknown: he left a popular hero.

Thanks to him, Australia was prepared for war; and when the Mother

Lioness sent out the world call to her cubs beyond the seas there was

swift response from the men of bush and range. The world knows what the

Anzacs did in the Dardanelles; how they registered a monster heroism on

the rocky heights of Gallipoli; gave a new glory to British arms.

England rang with their achievements. What could she do to pay tribute

to their courage? Hughes was their national leader and spokesman; so the

Political Powers That Be said:

"Let us invite the Premier to sit in the councils of the empire and

advise us about our future trade policy."

Already Hughes had declared trade war on Germany in Australia. Under his

leadership every German had been banished from commonwealth business; by

a special act of Parliament the complete and well-nigh war-proof

Teutonic control of the famous Broken Hill metal fields had been

annulled. He stood, therefore, as a living defiance to the renewal of

all commercial relations with the Central Powers. But he went further

than this: He decreed trade extermination of the enemy--merciless war

beyond the war.

With his first speech in England Hughes created a sensation. Before he

came commercial feeling against Germany ran high. Hughes crystallised it

into a definite cry. He said what eight out of every ten men in the

street were thinking. His voice became the Voice of Empire. Up and down

England and before cheering crowds he preached the doctrine of trade war

to the death on Germany. He denounced the laxness that had permitted the

"German taint to run like a cancer through the fair body of English

trade"; he urged complete economic independence of the Dominions. His

persistent plea was, "We must have the fruits of victory"; and those

fruits, he declared, comprised all the trade that Germany had hitherto

enjoyed, and as much more as could be lawfully gained.

He urged that the blood brotherhood of empire, quickened by that

dramatic S.O.S. call for men across the sea and cemented by the common

trench hazard, be followed by a union of empire after the war that

should be self-sufficient. Behind all this eloquent talk of protection

and prohibition lay the first real menace to America's new place as a

world trade power. It was the opening call to arms for the war after the

war.

Hughes did more than set England to thinking in imperial terms. He upset

most of the calculations of the Powers That Be who invited him. They

expected an amiable, able and plastic counsellor; they got an oratorical

live wire, who would not be ruled, and who shocked deep-rooted

free-trade convictions to the core. He helped to launch a whole new era

of thought and action; and the next chapter of its progress was now to

be recorded under circumstances pregnant with meaning for the whole

universe of trade.

The second winter of war had passed, and with it much of the dark night

that enshrouded the Allies' arms. On land and sea rained the first blows

of the great assaults that were to make a summer of content for the

Entente cause. Its arsenals teemed with shells; its men were fit;

victory, however distant, seemed at last assured. The time had come to

prepare a new kind of drive--the combined attack upon enemy trade and

any other that happened to be in the way.

Thus it came about that on a brilliant sun-lit day last June twoscore

men sat round a long table in a stately room of a palace that overlooked

the Seine, in Paris. Eminent lawmakers--Hughes, of Australia, among

them--were there aplenty; but few practical business men.

On the walls hung the trade maps of the world; spread before them were

the red-dotted diagrams that showed the water highways where traffic

flowed in happier and serener days. For coming generations of business

everywhere it was a fateful meeting because the now famous Economic

Conference of the Allies was about to reshape those maps and change the

channels of commerce.

All the while, and less than a hundred miles away, Verdun seethed with

death; still nearer brewed the storm of the Somme.

These men were assembled to fix the price of all this blood and

sacrifice, and they did. In what has come to be known as the Paris Pact

they bound themselves together by economic ties and pledged themselves

to present a united economic front. They unfurled the banner of

aggressive reprisal with the sole object of crushing the one-time

business supremacy of their foes.

The chief recommendations were: To meet, by tariff discrimination,

boycott or otherwise, any individual or organised trade advance of the

Central Powers--already Germany, Austria, Turkey and Bulgaria have

reached a commercial understanding; to forego any "favoured-nation"

relation with the enemy for an indefinite period; to conserve for

themselves, "before all others," their natural resources during the

period of reconstruction; to make themselves independent of enemy

countries in the raw materials and manufactured products essential to

their economic well-being; and to facilitate this exchange by

preferential trade among themselves, and by special and state subsidies

to shipping, railroads and telegraphs. Another important decree

prohibits the enemy from engaging in certain industries and professions,

such as dyestuffs, in allied countries when these industries relate to

national defence or economic independence.

In short, self-sufficiency became the aim of the whole allied group, to

be achieved without the aid or consent of any other nation or group of

nations, be they friends or foes.

Here, then, is the strategy that will rule after the war. A huge allied

monopoly is projected--a sort of monster militant trust, with cabinets

of ministers for directorates, armies and navies as trade scouts, and

whole roused citizenships for salesmen.

Throughout this new Bill of World Trade Rights there is scant mention of

neutrals--no reference at all to the greatest of non-belligerent

nations. Yet the document is packed with interest, fraught even with

highest concern, for us. Upon the ability to be translated into

offensive and defensive reality will depend a large part of our future

international commercial relations.

Is the Paris Pact practical? Will it withstand the logical pressure of

business demand and supply when the war is ended? How will it affect

American trade?

To try to get the answer I talked with many men in England and France

who were intimately concerned. Some had sat in the conference; others

had helped to shape its approach; still others were dedicated to its

far-spreading purpose. I found an astonishing conflict of opinion. Even

those who had attended this most momentous of all economic conferences

were sceptical about complete results. Yet no one questioned the intent

to smash enemy trade. Will our interests be pinched at the same time?

Regardless of what any European statesman may say to the contrary, one

deduction of supreme significance to us arises out of the whole

proposition. Summed up, it is this:

Mutual preference by or for the members of either of the great European

alliances automatically creates a discrimination against those outside!

Whether we face the Teuton or the Allies' group--or both--in the grand

economic line-up, we shall have to fight for commercial privileges that

once knew no ban.

There are two well-defined beliefs about the practical working out of

the pact as a pact. Let us take the objections first. They find

expression in a strong body of opinion that the whole procedure is both

unhuman and uneconomic--a campaign document, as it were, conceived in

the heat and passion of a great war, projected for political effect in

cementing the allied lines. In short, it is what business men would call

a glorified and stimulated "selling talk," framed to sell good will

between the nations that now propose to carry war to shop and mill and

mine.

"But," as a celebrated British economist said to me in London, "while

all this talk of Economic Alliance sounds well and is serving its

purpose, the fact must not be overlooked that, though war ends, business

keeps right on. Self-interest will dictate the policy that pays the

best." This is a typical comment.

Now we get to the meat of the matter: By the terms of the pact half a

dozen important nations--to say nothing of the smaller fry--are bound to

a hard-and-fast trade agreement. Business, in brief, is projected in

terms of nations.

Go behind this new battle front and you will find that it conflicts with

an uncompromising commercial rule. Why? Simply because, so far as

business is concerned, nations may propose, but human beings dispose.

Individuals, not countries, do business! Being human, these individuals

are apt to follow the line of least resistance. Hence, the best-laid

plans for imposing international industrial teamwork are likely to

founder on those weaknesses of human nature that begin and end in the

pocketbook.

After the Franco-Prussian War of 1870-71, and while the Peace of

Versailles was being negotiated, commercial travellers of each nation,

laden with samples, filled the border villages, ready to dash across the

frontier and open accounts. Of course no one dreams that such history

will repeat itself after the present war; but there are many persons in

England and France to-day who contend that the business needs of peace

will be stronger than the costly hang-over of wartime passions.

Trade, after all, is a Colossus that rests with one foot upon Necessity

and the other foot upon Convenience.

Will the Allies be such valued commercial helpmates to each other?

Perhaps not. When this war is over the fighting countries will be

impoverished by years of drain and waste. As a result, they will be

poorer customers for each other, but very sharp competitors.

International trade is merely an exchange of goods for goods. You cannot

sell without buying, and vice versa. No groups of nations can live by

taking in each other's washing. They are bound to get outside linen.

When peace comes we shall have the lending and purchasing power of the

world. Can anybody afford to shut us out?

Again: Can the Allies present a united front or carry on a uniform line

of conduct? Will not their interests overlap and cause an inevitable

conflict, even when intentions are of the very best?

France, for example, competes with England in chemicals, surgical

instruments, high-speed tools, scores of things; Russia's competitors in

wheat are not Germany, but Canada, India and Australia; Italy and France

are rivals for the same wine markets. Russia for years has kept down the

high cost of her living by buying cheap German goods at her front door

and having her projects financed by German capital. Will she face

bankruptcy by going hundreds--even thousands--of miles out of her way

and paying more for products? England for years has made huge profits

out of the re-export of Teutonic articles, thanks to the grace of free

trade and huge carrying power. Is she likely to forego all this?

In the last analysis Propinquity and the Purse are the Mothers of Trade

Alliance.

Finally, will not any organised exclusion of German products, coupled

with a definite and organised campaign to throttle German trade the

world over, throw the business of the Kaiser's country smack into the

lap of the United States? Sober reflection over these possibilities may

stay economic reprisal.

On the other hand, there are many ways by which even a near translation

of the economic pact into actuality may work hardship--even disaster--to

American commercial interests. No matter which way we turn when peace

comes we shall face the proverbial millstones in the shape of two great

alliances. One is the Allied Group, jealous of our new wealth and world

power, bitter with the belief that we have coined gold out of agony; the

other is the Teutonic Union, smarting because of our aid to its

enemies, stinging under reverses, mad with a desire to recuperate.

Examine our trade relations with warring Europe and you see how

hazardous a shift in old-time relations would be. To the fighting

peoples and their colonies in normal times we send nearly seventy-eight

per cent of our exports, and from them we derive seventy per cent of our

exports. The Allies alone, principally England and her colonies, get

sixty-three per cent of these exports and send us fifty-four per cent of

all we get from foreign lands.

As the National Foreign-Trade Council of the United States points out:

"Any sweeping change of tariff, navigation or financial policy on the

part of either group of the Allies, and particularly on the part of the

Entente Allies, may seriously affect the domestic prosperity of the

United States, in which foreign trade is a vital element."

Why is this foreign trade so vital? Because, during these last two years

of world upheaval we have rolled up the immense favourable trade balance

of over three billion dollars. In peace time this would be paid for in

merchandise. But fighting Europe's industries, with the exception of a

part of England's, are mobilised for munitions. Therefore, these goods

have been paid for largely in gold.

This gold is now part of our basis of credit. When the war ends Europe

will make every effort that ingenuity, backed up by trade resource, can

devise to get that gold back. One way is through loans from us; the

other is by exports to us. Now you see why we must maintain our foreign

commerce.

Our huge gold reserve hides another menace: The war demands for our

commodities, paid for with the yellow metal, have increased the cost of

production; and it will stay up. This will lead to an unequal

competition with the cheap labour markets of Europe when the war is

over. Both groups of Allies will be able to undersell us.

Turn to the raw materials and you encounter a further danger in the

economic pact. If the Allies develop their own sources, it will cut down

our export of cotton, copper and oil. If they cannot develop sufficient

sources for self-supply they may, through co-operative buying outside

their dominions, satisfy their needs. In the third place, they may

stimulate, through tariff or shipping concessions, or by

subsidies--which are much talked of in Europe to-day--a preference for

their own manufactures over American products in both allied and neutral

markets.

Take navigation: England controls an immense shipping. As a matter of

fact, outside the three-mile limit, she practically owns the waters of

the world. If she makes lower rates for her allies, or others to whom

she gives preference, where shall we be in our chronic and unpardonable

dependence upon foreign bottoms? Here is where we shall pay the price

for neglecting our merchant marine.

Still another menace to our trade lies in preferential alliances between

Mother Countries and their colonies, which is part of the projected

programme. Our next-door neighbour, Canada, has just given an

illuminating instance of what may be in store for us. A Co-operative

Export Association has been formed in the Dominion to get business

throughout the British Empire and the other allied nations. In the

circular announcing its organisation it declares that "the products of

Canada will be preferred against the products of her great neutral

competitor, the United States, who has stayed outside of the war and has

borne no sacrifice of life and money made by the allied countries."

Return to the economic pact again and you find that it continues to

bristle with dangerous possibilities for us. You will recall that one of

the clauses forbids the resumption of a favoured-nation arrangement with

enemy countries for a period "to be fixed by mutual agreement." This may

be for an indefinite time.

Now the danger here lies in the European interpretation of the

favoured-nation idea. To quote an authority: "Most of these countries

have treaties under which each must grant most-favoured-nation treatment

to the other; and this means that a reduction in duties granted to one

country is automatically extended to all other countries with whom such

treaties exist. The result is that the lowest rate in any treaty

becomes, with exception, the rate extended to all countries."

We have the favoured-nation relation with many European countries, and

herein lies the possible danger: The war automatically annulled all

treaties between belligerents. When the day of treaty making comes again

shall we suffer for the sins of friend and foe in the rearrangement of

international trade and lose some precious commercial privileges? It is

worth thinking about.

II--_England Awake_

Meantime, regardless of how the economic pact works out, England's

policy is "Deeds, not Words," as she prepares for the time when normal

life and business succeed the strain and frenzy of fighting days.

No man can range up and down the British Isles to-day without catching

the thrill of a galvanic awakening, or feeling an imperial heartbeat

that proclaims a people roused and alive to what the future holds and

means. The kingdom is a mighty crucible out of which will emerge a new

England determined to come back to her old industrial authority. It is

with England that our commerce must reckon; it is English competition

that will grapple with Yankee enterprise wherever the trade winds blow.

There are many reasons why. "For England," as one man has put it,

"victory must mean prosperity. However triumphant she may be in arms,

her future lies in a preeminence in world industries. Through it she

will rise as an empire or sink to a second-rate nation."

In the second place, as all hope of indemnity fades, England realises

that she will not only have to pay all her own bills but likewise some

of the bills of her allies. Already her millions have been poured into

the allied defence; many more must follow.

Hence, the relentless energy of her throbbing mills; the searching

appraisal of her resources; the marshalling of all her genius of trade

conquest. Dominating all this is the kindling idea of a self-contained

empire, linked with the slogan: "Home Patronage of Home Product." The

war found her unprepared to fight; she is determined that peace shall

see her fit for economic battle.

This is what she is doing and every act has a meaning all its own for

us. Take Industry: Forty-eight hundred government-controlled factories,

working day and night, are sending out a ceaseless flood of war

supplies. The old bars of restricted output are down; the old sex

discrimination has faded away. Women are doing men's work, getting men's

pay, making themselves useful and necessary cogs in the productive

machine. They will neither quit nor lose their cunning when peace

comes.

I have watched the inspiring spectacle of some of these factories, have

walked through their forest of American-made automatics, heard the hum

of American tools as they pounded and drilled and ground the instruments

of death. What does it signify? This: that quantity output of shot and

shell for war means quantity output of motors and many other products

for peace. You may say that quantity output is a matter of temperament

and that the British nature cannot be adapted to it; but speeded-up

munitions making has proved the contrary. The British workman has

learned to his profit that it pays to step lively. High war wages have

accustomed him to luxuries he never enjoyed before, and he will not give

them up. Unrestricted output has come to stay.

Five years ago the efficiency expert was regarded in England as an

intruder and a quack; to use a stop watch on production was high crime

and treason. To-day there are thousands of students of business science

and factory management. In the spinning district girls in clogs sit

alongside their foremen listening to lectures on how to save time and

energy in work. Scores of old establishments are being reborn

productively. There is the case of a famous chocolate works that before

the war rebuffed an instructor in factory reorganisation. Last year it

saw the light, hired an American expert, and to-day the output has been

increased by twenty-five per cent.

The infant industries, growing out of the needs of war and the desire of

self-sufficiency, are resting on the foundations of the new creed.

"Speed up!" is the industrial cry, and with it goes a whole new scheme

of national industrial education. The British youth will be taught a

trade almost with his A-B-C's.

Formerly in England the standardisation of plan and product was almost

unknown. For example, no matter how closely ships resembled each other

in tonnage, structure or design, a separate drawing was made for each.

Now on the Clyde the same specifications serve for twenty vessels.

England has gone into the wholesale production; and what is true of

ships in the stress of hungry war demand will be true of scores of

articles for trade afterward. The old rule-of-thumb traditions that

hampered expansion have gone into the discard, along with voluntary

military service and the fetish of free trade.

Typical of the new methods is the standardisation of exports, which have

increased steadily during the past year. In a room of the Building of

the Board of Trade, down in Whitehall, and where the whole trade

strategy of the war is worked out, I saw a significant diagram, streaked

with purple and red lines, which shows the way it is done. The purple

indicated the rosters of the great industries; the red, the number of

men recruited from them for military service. No matter how the battle

lines yearn for men, the workers in the factories that send goods across

the sea are kept at their task. This diagram is the barometer. For

exports keep up the rate of exchange and husband gold.

England is creating a whole new line of industrial defence. The

manufacture of dyestuffs will illustrate: This process, which originated

in England, was permitted to pass to the Germans, who practically got a

world monopoly in it. Now England is determined that this and similar

dependence must cease.

For dyemaking she has established a systematic co-operation among state,

education and trade. In the University of Leeds a department in colour

chemistry and dyeing has been established, to make researches and to

give special facilities to firms entering the industry, all in the

national interest. A huge, subsidised mother concern, known as British

Dyes, Limited, has been formed, and it will take the place of the great

dye trust of Germany, in which the government was a partner.

This procedure is being repeated in the launching of an optical-glass

industry; this trade has also been in Teutonic hands. I could cite many

other instances, but these will show the new spirit of British

commercial enterprise and protection.

Everywhere nationalisation is the keynote of trade activity. Coal

furnishes an instance: The collieries of the kingdom not only stoke the

fires of myriad furnaces but drive the ships of a mighty marine. Through

her control of coal England has one whip hand over her allies, for many

of the French mines are in the occupied districts, and Italy's supply

from Germany has stopped. Coal means life in war or peace. Now England

proposes a state control of coal similar to that of railroads.

It spells fresh power over the neutral shipping that coals at British

ports. If the government controls the coal it will be in a position to

stipulate the use that the consumer shall make of it, and require him to

call for his return cargo at specified ports. Such supervision in war

may mean similar domination in peace--another bulwark for British

control of the sea.

Throughout England all trade facilities are being broadened and

bettered. The local Chambers of Commerce, whose chief function for years

was solemnly to pass resolutions, have stirred out of their slumbers.

The Birmingham body has formed a House of Commerce to stimulate and

develop the commerce of the capital of the Midlands.

This stimulation at home is accompanied by a programme of trade

extension abroad. The Board of Trade has granted a licence to the

Latin-American Chamber of Commerce in Great Britain, formed to promote

British trade in Central and South America and Mexico. Sections of the

chamber are being organised for each of the important trades and

industries in the kingdom, and committees named to enter into

negotiations with every one of the Latin-American republics, where

offices will be established in all important towns.

The Board of Trade has also learned the lesson of co-operation for

foreign trade. As one result, British syndicates, composed of small

manufacturers, who share the overhead cost, are forming to open up new

markets the world over. These syndicates correspond with the familiar

German Cartel, which did so much to plant German products wherever the

sun shone.

England, too, has wiped out one other block to her trade expansion: For

years many of her consuls were naturalised Germans. Many of them were

trustworthy public servants. Others, true to the promptings of birth,

diverted trade to their Fatherland. To-day the Consular Service is

purged of Teutonic blood. It is one more evidence of the gospel of

"England for the English!"

All this new trade expansion cannot be achieved without the real sinew

of war, which is capital. Here, too, England is awake to the emergency.

Typical of her plan of campaign is the projected British Trade Bank,

which will provide facilities for oversea commercial development, and

which will not conflict with the work ordinarily done by the

joint-stock, colonial and British foreign banks. It will do for British

foreign trade what the huge German combinations of capital did so long

and so effectively for Teuton commerce. Furthermore, it will make a

close corporation of finance and trade, with the government sitting in

the board of directors and lending all the aid that imperial support can

bestow.

The bank will be capitalised at fifty million dollars. It will not

accept deposits subject to call at short notice, which means constant

mobilisation of resources; it will open accounts only with those who

propose to make use of its oversea machinery; it will specialise in

credits for clients abroad, and it will become the centre of syndicate

operations. One of its chief purposes, I might add, will be to enable

the British manufacturer and exporter to assume profitably the long

credits so much desired in foreign trade.

From the confidential report of its organisation let me quote one

illuminating paragraph which is full of suggestion for American banking,

for it shows the new idea of British preparedness for world business.

Here it is:

"Nearly as important as the Board would be the General Staff. It is fair

to assume that women will in the future take a considerable share in

purely clerical work, and this fact will enable the institution to take

fuller advantage of the qualifications of its male staff to push its

affairs in every quarter of the globe. Youths should not be engaged

without a language qualification, and after a few years' training they

should be sent abroad. It could probably be arranged that associated

banks abroad would agree to employ at each of their principal branches

one of the Institution's clerks, not necessarily to remain there for an

indefinite period, but to get a knowledge of the trade and

characteristics of the country. Such clerks might in many cases sever

their connection with the banks to which they were appointed and start

in business on their own account. They would, however, probably look

upon the institution as their 'Alma Mater,' Every endeavour should be

made to promote _esprit de corps_; and where exceptional ability is

developed it should be ungrudgingly rewarded. If industry is to be

extended it is essential that British products should be _pushed_; and

manufacturers, merchants and bankers must combine to push them. It is

believed that this pushing could be assisted by the creation of a body

of young business men in the way above described."

The scope and purpose of this British Trade Bank suggest another East

India Company with all the possibilities of gold and glory which

attended that romantic eighteenth-century enterprise. Perhaps another

Clive or a second Hastings is somewhere in the making.

That the British Government proposes to follow the German lead and

definitely go into business--thus reversing its tradition of aloofness

from financial enterprise--is shown in the new British and Italian

Corporation, formed to establish close economic relations between

Britain and Italy. It starts a whole era in British banking, for it

means the subsidising of a private undertaking out of national funds.

It embodies a meaning that goes deeper and travels much farther than

this. Up to the outbreak of the great war Germany was the banker of

Italy. Cities like Milan and Rome were almost completely in the grip of

the Teutonic lender, and his country cashed in strong on this surest and

hardest of all dominations. This was the one big reason why the Italian

declaration of war against Germany was so long delayed. With this new

banking corporation England not only supplants the German influence but

forges the economic irons that will bind Italy to her.

The capital of the British and Italian Corporation is nominally only

five million dollars. The government, however, agrees to contribute

during each of the first ten years of its existence the sum of two

hundred and fifty thousand dollars. Though imperial stimulation of trade

is one of its main objects, this institution is not without its larger

political value. As this and many other similar enterprises show,

politics and world trade, so far as Great Britain is concerned, will

hereafter be closely interwoven.

Throughout all this British organisation runs the increasing purpose of

an Empire Self-Contained. Whether that phase of the Paris Pact which

calls for development and mobilisation of natural resources sees the

light of reality or not, Britain is determined to take no chances for

her own. She is scouring and searching the world for new fields and new

supplies. She is planning to increase her tea and coffee growing in

Ceylon and make cotton plantations of huge tracts in India and Africa.

The control of the metal fields of Australia has reverted to her hands;

she will get tungsten and oil from Burma. It took the war to make her

realise that, with the exception of the United States, Cuba and Hawaii,

all the sugar-cane areas of the world are within the imperial confines.

They will now become part of the Empire of Self-Supply. Even a partial

carrying out of this far-flung plan is bound seriously to affect our

whole export business.

You have seen how this self-contained idea may work abroad. Go back to

England and you find it forecasting an agricultural revolution that may

be one of the after-war miracles.

For many years England has raised about twenty per cent of her wheat

supplies. One reason was her dependence on grass instead of arable land;

another was the inherent objection of the British farmer to adopt

scientific methods of soil cultivation or engage in co-operative

marketing. The old way was the best way; he wanted to go "on his own."

The war has opened his eyes, and likewise the eyes and purse of the

ultimate consumer. Denmark did some of this awakening. England depended

upon her for enormous supplies of bacon, cheese, butter and eggs. When

the war broke out and the ring of steel hemmed Germany in, the

speculative prices offered by the Fatherland were too much for the

little domain. Holland also "let down" her old customer, poured her food

into Germany, and fattened on immense profits. Norway and Sweden, which

were also important sources of more or less perishable British food

supplies, have done the same thing. When peace comes you may be sure

that England will have a reckoning.

This scarcity of food, coupled with the incessant sinking of supply

ships by enemy submarines, the rigid censorship of imports, and all

those other factors that bring about the high cost of war, has made the

Englishman sit up and take notice of his agricultural plight.

"We must grow more of our food," is the new determination. To achieve it

plans for collective marketing, for intensive farming, for co-operative

land-credit banks, are being made. The gentleman farmer will become a

working farmer.

England's gospel of self-sufficiency has a significance for us that

extends far beyond her growing independence in foodstuffs and raw

materials. It is fashioning a weapon aimed straight at the heart of our

overseas industrial development.

Most people who read the newspapers know that many articles of American

make, ranging from bathtubs to motor cars, have been excluded from

England. The reasons for this--which are all logical--are the necessity

for cutting down imports to protect the trade balance and keep the gold

at home; the need of ship tonnage for food and war supplies; and the

campaign to curtail luxury.

Admirable as are these reasons, there is a growing feeling among

Americans doing business in England that this wartime prohibition, which

is part of the programme of military necessity, is the prelude to a more

permanent, if less drastic, exclusion when peace comes.

Habit is strong with Englishmen, and the shrewd insular manufacturer has

been quick to see the opportunities for advancement that lie in this

closed-door campaign.

"Get the consumer out of the habit of using a certain American product

during the war," he argues, "and when the war is over--even before--he

will be a good 'prospect' for the English substitute."

Here is a concrete story that will illustrate how the exclusion works

and what lies behind:

Last summer a certain well-known American machine, whose gross annual

business in Great Britain alone amounts to more than half a million

dollars a year, was suddenly denied entrance into the kingdom. When the

managing director protested that it was a necessity in hundreds of

British ships he was told that it made no difference.

"But what are the reasons for exclusion?" he asked.

"We don't want English money to go out of England," was the reply.

"Then we shall not only bank all our receipts here but will bring over

one hundred thousand pounds more," came from the director.

It had no effect.

"Is it tonnage?" was the next query.

"Yes," said the official.

"Then we shall ship machines in our president's yacht," was the ready

response.

This staggered the official. After a long discussion the director

received permission to bring in what machines were on the way; and,

also, he got a date for a second hearing.

Meantime he adapted a type of machine to the needs of a certain

department in the Board of Trade, sold two, and got them installed and

working before he next appeared before the Trade Censors, who, by the

way, knew absolutely nothing at all about the article they were

prohibiting. The first question popped to him was:

"Are machines like yours made in England?"

"Yes," replied the director; "but they have never been practical or

commercial."