THE FOOD SHARK AND HIS WAYS

There were two schools of war economists in Central Europe, and they had

their following in each of the several governments that regulated

food--its production, distribution, and consumption. The two elements

opposed each other, naturally, and not a little confusion came of this

now and then.

The military formed one of these schools--the radical. These men wanted

to spread over the entire population the discipline of the barrack-yard.

For the time being they wanted the entire state to be run on military

principles. All production was to be for the state; all distribution was

to be done in the interest of the war, and all consumption, whether that

of the rich or the poor, was to be measured by the military value of the

individual. It was proposed that every person in the several states

should get just his share of the available food and not a crumb more.

The rich man was to eat exactly, to the fraction of an ounce, what the

poor man got. He was to have no greater a share of clothing, fuel, and

light.

That seemed very equitable to most people. It appealed even to the other

school, but it did not find the approval of those who were interested in

the perpetuation of the old system of social economy. What the military

proposed was more than the socialists had ever demanded. The enforcement

of that measure would have been the triumph absolute of the

Social-Democrats of Central Europe.

But for that the Central European politician and capitalist was not

ready. With the capitalist it was a question of: What good would it do

to win the war if socialism was thus to become supreme? It would be far

better to go down in military defeat and preserve the profit system.

The struggle was most interesting. I had occasion to discuss it with a

man whose name I cannot give, for the reason that it might go hard with

him--and I am not making war on individuals. At any rate, the man is now

a general in the German army. He was then a colonel and looked upon as

the ablest combination of politician, diplomatist, and soldier Germany

possessed, as he had indeed proved.

"You are a socialist," I said to him. "But you don't seem to know it."

"I am a socialist and do know it," said the colonel. "This war has made

me a socialist. When this affair is over, and I am spared, I will become

an active socialist."

"And the reason?" I asked.

That question the colonel did not answer. He could not. But I learned

indirectly what his reasons were. Little by little he unfolded them to

me. He was tired of the butchery, all the more tired since he could not

see how bloody strife of that sort added anything to the well-being of

man.

"When war reaches the proportions it has to-day it ceases to be a

military exercise," he said on one occasion. "The peoples of Europe are

at one another's throat to-day because one set of capitalists is afraid

that it is to lose a part of its dividends to another. The only way we

have of getting even with them is to turn socialist and put the curb on

our masters."

There would seem to be no direct connection between this sentiment and

the economic tendency of the military in food regulation. Yet there is.

The men in the trenches knew very well what they were fighting for. They

realized that, now the struggle was on, they had to continue with it,

but they had also made up their mind to be heard from later on.

The case I have quoted is not isolated. I found another in the general

headquarters of General von Stein, then commanding a sector on the

Somme.

In the camp of the military economists was also that governing element

which manages to drag out an existence of genteel shabbiness on the

smallest pay given an official of that class anywhere. This faction also

favored the most sweeping measures of war economy.

But it was in the end a simple matter of holding these extremists down.

Their opponents always had the very trenchant argument that it took

money to carry on the war, and that this money could not be had if the

old system was completely overthrown. There was little to be said after

that. To do anything that would make war loans impossible would be

treason, of course, and that was considered going too far.

Regulation thereafter resolved itself into an endeavor by the

anti-capitalists to trim their _bête noire_ as much as was possible and

safe, and the effort of the economic standpatters to come to the rescue

of their friends. Now the one, then the other, would carry off the

honors, and each time capital and public would either gain or lose. It

depended somewhat on the season. When war loans had to be made, the

anti-capitalist school would ease off a little, and when the loan had

been subscribed it would return to its old tactics, to meet, as before,

the very effective passive resistance of the standpatters.

I may mention here that much of what has been said of the efficient

organization of the German governments is buncombe--rot pure and simple.

In the case of the Austrian and Hungarian governments this claim has

never been made, could never have been made, and no remark of mine is

necessary. The thing that has been mistaken for efficient organization

is the absolute obedience to authority which has been bred into the

German for centuries. Nor is that obedience entirely barrack bred, as

some have asserted. It is more the high regard for municipal law and

love of orderliness than the fear of the drill-sergeant that finds

expression in this obedience. How to make good use of this quality

requires organizing ability, of course. But no matter how the efficient

organization of the Germans is viewed, the fact remains that the German

people, by virtue of its love of orderliness, is highly susceptible to

the impulses of the governing class. To that all German efficiency is

due.

There had been some modification of distribution early in 1915. That,

however, was entirely a military measure. The traffic on the German

state railroads was unusually heavy, and trackage, rolling-stock, and

motive power had to be husbanded if a breakdown of the long lines of

communication between the French and Russian fronts was to be avoided.

There was no thought of social economy. The thing aimed at was to keep

the railroads fit for military service.

But by August of 1915 the military economists had managed to get their

hands into economic affairs. It cannot be said that their efforts were

at first particularly fortunate. But the German general staff was and is

composed of men quick to learn. These men had then acquired at least one

sound notion, and this was that, with the railroads of the several

states under military control, they could "get after" the industrial and

commercial barons whom they hated so cordially.

"In the interest of the military establishment" a number of

socio-economic innovations were introduced. The first of them was the

distribution zone. There is no doubt that it was a clever idea. It was

so sound, at the same time, that the friends of the trade lords in the

government had to accept it.

The arrangement worked something like this. A wholesaler of flour in

western Hanover might have a good customer in the city of Magdeburg. Up

to now he had been permitted to ship to that customer as he desired.

That was to cease. He could now ship only to that point when he could

prove that the flour was not needed nearer to where it was stored. But

to prove that was not easy--was impossible, in fact.

Since the German state railroads had in the past provided much of the

revenue of the several governments, this was no small step to take. But

it was taken, and with most salutary effects. The trundling of freight

back and forth ceased, and the food shark was the loser.

Ostensibly, this had been done in order to conserve the railroads. Its

actual purpose was to check the trade lords by depriving them of one of

their arguments why the price of necessities should be high.

What was accomplished in this instance should interest any community,

and for that reason I will illustrate it with an example of "economic

waste" found in the United States.

You may have eaten a "Kansas City" steak in San Antonio, Texas, if not

at Corpus Christi or Brownsville. (I am an adopted "native" of that

region and inordinately proud of it.) If you had investigated the

history of that steak I think you would have been somewhat surprised.

The steer which produced that steak might have been raised in the valley

of the Rio Grande. After that the animal had taken a trip to Oklahoma,

where better pasture put more meat on its back. Still later a farmer in

Missouri had fattened the steer on the very cream of his soil, and after

that it had been taken to Kansas City or Chicago to be butchered and

"storaged."

It might then have dawned upon you that a great deal of wasted effort

was hidden in the price of that steak, though no more than in the

biscuit that was wheat in North Dakota, flour in Minneapolis, biscuit in

San Francisco, and a toothsome morsel to follow the steak. You would be

a dull person indeed if now some economic short cut had not occurred to

you. The steak might have been produced by Texas grass and North Texas

corn, and the like, and it need never have traveled farther than San

Antonio. The biscuit might have been given its form in Minneapolis.

It was so in Germany before the military social economists took a hand

in the scheme, though the waste was by no means as great as in the cases

I have cited, seeing that all of the empire is a little smaller than the

Lone Star State.

But the little trundling there was had to go.

In the winter of 1915-16 this budding economic idea was still in

chrysalis, however. The several governments still looked upon it

entirely as a measure for the conservation of their railroads. What is

more, they were afraid to give the principle too wide an application. In

the first place, the extension of the scheme into the socio-economic

structure seemed difficult technically. It was realized that the

reduction of traffic on the rails was one thing, and that the

simplifying of distribution was quite another. To effect the first the

Minister of Railroads had merely to get in touch with the chiefs of the

"direction," as the districts of railroading are called. The chiefs

would forward instruction to their division heads, and after that

everything was in order.

But distribution was another thing. In that case the several governments

did not deal with a machine attuned to obey the slightest impulse from

above, and which as readily transmitted impulses from the other end. Far

from it. Not to meddle with distribution, so long as this was not

absolutely necessary, was deemed the better course, especially since all

such meddling would have to be done along lines drawn a thousand times

by the Central European socialist.

But the food shark had to be checked somehow. The unrest due to his

sharp practices was on the increase. The minimum-maximum price decrees

which had been issued were all very well, but so long as there was a

chance to speculate and hoard they were to the masses a detriment rather

than a benefit.

Let me show you how the food shark operated. The case I quote is

Austrian, but I could name hundreds of similar instances in Germany. I

have selected this case because I knew the man by sight and attended

several sessions of his trial. First I will briefly outline what law he

had violated.

To lay low what was known as chain trade throughout Central Europe,

_Kettenhandel_, the governments had decreed that foodstuffs could be

distributed only in this manner: The producer could sell to a

commission-man, but the commission-man could sell only to the

wholesaler, and the wholesaler only to the retailer.

That appears rational enough. But neither commission-man nor wholesaler

liked to adhere to the scheme. Despite the law, they would pass the same

thing from one to another, and every temporary owner of the article

would add a profit, and no small one. To establish the needed control

the retailer was to demand from the wholesaler the bill of sale by which

the goods had passed into his hands, while the wholesaler could make the

commission-man produce documentary evidence showing how much he had paid

the producer. Under the scheme a mill, or other establishment where

commodities were collected, was a producer.

Mr. B. had bought of the Fiume Rice Mills Company a car-load of best

rice, the car-load in Central Europe being generally ten tons. He had

brought the rice to Vienna and there was an eager market for it, as may

be imagined. But he wanted to make a large profit, and that was

impossible if he went about the sale of the rice in the manner

prescribed by the government. The wholesaler or retailer to whom he sold

might wish to see the bill of sale, and then he was sure to report him

to the authorities if the profit were greater than the maximum which the

government had provided. To overcome all this he did what many others

were doing, and in that manner made on the single car of rice which he

sold to a hunger-ridden community the neat little profit of thirty-five

hundred crowns.

Something went wrong, however. Mr. B. was arrested and tried on the

charge of price-boosting by means of chain trade. When the rice got to

Vienna he had sold it to a dummy. The dummy sold it to another dummy,

and Mr. B. bought it again from the second dummy. In this manner he

secured the necessary figures on the bill of sale and imposed them on

the wholesaler. The court was lenient in his case. He was fined five

thousand crowns, was given six weeks in jail, and lost his license to

trade. _Preistreiberei_--to wit--price-boosting did not pay in this

instance.

After all, that sort of work was extremely crude when compared with some

other specimens, though the more refined varieties of piracy needed

usually the connivance of some public official, generally a man

connected with the railroad management. Many of these officials were

poorly paid when the war began and the government could not see its way

clear to paying them more. The keen desire of keeping up the shabby

gentility that goes with Central European officialdom, and very often

actual want, caused these men to fall by the roadside.

There was a little case that affected three hundred cars of wheat

flour. Though Hungary and Austria had then no wheat flour to spare for

export, the flour was actually exported through Switzerland into Italy,

though that country was then at war with the Dual Monarchy! Thirty-two

men were arrested, and two of them committed suicide before the law laid

hands on them. The odd part of it was that the flour had crossed the

Austro-Hungarian border at Marchegg, where the shipment had been

examined by the military border police. It had then gone across Austria

as a shipment of "cement in bags," had passed as such into Switzerland,

and there the agents of the food sharks in Budapest had turned it over

to an Italian buyer. Nobody would have been the wiser had it not been

that a shipment of some thirty cars was wrecked. Lo and behold, the

cement was flour!

They had some similar cases in Germany, though most of them involved

chain trading in textiles. The unmerciful application of the law did not

deter the profiteer at all, any more than capital punishment has ever

succeeded in totally eradicating murder. There was always somebody who

would take a chance, and it was the leakage rather than the general

scheme of distribution that did all the damage. Whatever necessity and

commodity had once passed out of the channel of legitimate business had

to stay out of it if those responsible for the deflection were not to

come in conflict with the law, and there were always those who were only

too glad to buy such stores. The wholesaler received more than the

maximum price he could have asked of the retailer, and the consumer was

glad to get the merchandise at almost any price so that he could

increase his hoard.

But the governments were loth to put the brake on too much of the

economic machinery. They depended on that machinery for money to carry

on the war, and large numbers of men would be needed to supervise a

system of distribution that thwarted the middleman's greed effectively.

These men were not available.

The minimum-maximum price scheme had shown itself defective, moreover.

In theory this was all very well, but in food regulation it is often a

question of: The government proposes and the individual disposes. The

minimum price was the limit which any would-be buyer could offer the

seller. In the case of the farmer it meant that for a kilogram (2.205

pounds) of potatoes he would get, let us say, five cents. Nobody could

offer him less. The maximum price was to protect the consumer, who for

the same potatoes was supposed to pay no more than six and one-half

cents. The middlemen were to fit into this scheme as best they could.

The one and one-half cents had to cover freight charges, operation cost,

and profit. The margin was ample in a farm-warehouse-store-kitchen

scheme of distribution. But it left nothing for the speculator, being

intended to stimulate production and ease the burden which the consumer

was bearing. Not the least purpose of the scheme was to keep the money

out of the hands of food-dealers, who would hoard their ill-gotten

gain. The government needed an active flow of currency.

All of which was well enough so long as the supply of food was not

really short. But when it grew short another factor entered the arena.

Everybody began to hoard. The quantities which the authorities released

for consumption were not intended to be stored, however. Storing food by

incompetents is most wasteful, as the massacre of the pigs had shown,

and hoarding, moreover, gave more food to the rich than to the poor; so

for the time being it could not be encouraged too openly, despite the

revenues that came from it.

But the hoarder is hard to defeat. The consumer knew and trusted the

retailer, the retailer was on the best of terms with the wholesaler, and

the rapacious commission-man knew where to get the goods.

He made the farmer a better offer than the minimum price he usually

received. He paid six cents for the kilogram of potatoes, or even seven.

Then he sold in a manner which brought the potatoes to the consumer for

eleven cents through the "food speak-easy." The middleman and retailer

had now cleared four cents on the kilogram, instead of one and one-half

cents; their outlay deducted, they would make a net profit running from

two and one-half cents to three and one-half cents per 2.205 American

pounds of potatoes. This sort of traffic ran into the tens of thousands

of tons. The food shark was making hay while the weather was good. The

entire range of human alimentation was at his mercy, and often the

government closed an eye because the food shark would subscribe

handsomely to the next war loan.

In the winter of 1915-16 I made several trips into the country to see

how things were getting along. On one occasion I was in Moravia. I had

heard rumors that here the food shark had found Paradise. It was a fact.

Near a freight-yard in Brünn a potato-dealer was installed. He bought

potatoes in any quantity, being in effect merely the agent of the Vienna

Bank Ring that was doing a food-commission business as a side line. I

don't know why the government permitted this, except that this

"concession" was a _quid pro quo_ for war-loan subscriptions.

A little old Czech farmer drove up. He had some thirty bags of potatoes

on his sleigh, all well protected by straw and blankets. The food shark

looked the load over and offered the minimum price for that grade, which

on that day was eighteen hellers the kilogram, about one and

three-fourths cents American per pound avoirdupois.

The farmer protested. "My daughter in Vienna tells me that she has to

pay thirty-six hellers a kilogram," he said.

"Not according to the maximum price set by the government, which is

twenty-one hellers just now," was the bland remark of the agent.

"That is all very well, sir!" returned the farmer. "But you know as well

as I do that when my daughter wants potatoes she must pay thirty-six

hellers or whatever the retailer wants. She writes me that when she

stands in the food-line she never gets anything. So she does business

with a man who always has potatoes."

The food shark had no time to lose. Other farmers came.

"Eighteen hellers or nothing," he said.

The farmer thought it over for a while and then sold.

The reader uninitiated in war-food conditions may ask: Why didn't that

farmer ship his daughter the potatoes she needed? He couldn't, of

course. The economic-zone arrangement prevented him. That zone was the

means which the government employed to regulate and restrict

distribution and consumption without giving money an opportunity to

tarnish in the hands of people who might not subscribe to war loans. The

zone "mobilized" the pennies by concentrating them in the banks and

making them available _en masse_ for the war.

Yet the fact was that the daughter of the farmer, buying potatoes

clandestinely, may have bought the very product of her father's land.

Who in that case got the eighteen hellers difference? The middlemen, of

course. That the poor woman, in order to feed her children, might have

been able to use to good advantage two kilograms at thirty-six hellers,

instead of one, is very likely, but this consideration did not bother

the food sharks known as the Vienna Bank Ring.

On one occasion the same group of food speculators permitted two

million eggs to spoil in a railroad yard at Vienna because the price was

not good enough. The Bank Ring was just then agitating for a better

price for eggs and hoped that the maximum would be raised. But the

government was a little slow on this occasion, and before the price went

up, "according to regulation," the eggs were an unpleasant memory to the

yard-hands. Naturally, nobody was prosecuted in this case. I understood

at the time that the Bank Ring presented to the Austrian government a

sort of ultimatum, which read: "No profits, no war loans." The

government surrendered.

The fact that many of these speculators were of the Jewish persuasion

caused a revival of a rather mild sort of anti-Semitism. Several of the

Christian newspapers made much of this, but the government censors soon

put an end to that. This was no time for the pot to call the kettle

black. The food shark came from all classes, and the Austrian nobility

was not poorly represented.

There was the case of the princely house of Schwarzenberg, for instance.

The family is not of German blood to any extent, as the name would seem

to imply. Nowadays it is distinctly Bohemian, and in Bohemia its vast

estates and properties are located. The managers of the Schwarzenbergs

had a corner on almost everything that was raised in the localities of

the family's domains. In the winter of 1915-16 they forced up, to

unheard-of heights, the price of prunes. The prune was a veritable

titbit then, and with most people in Central Europe it had come to be

the only fruit they could get in the winter. Its nutritive value is

great, and since every pfennig and heller had to buy a maximum in food

values the demand for prunes soon exceeded greatly the supply--so

everybody thought.

But the trouble was not a shortage. The crop had been good, in fact.

Orchards, so far as they had not been harmed by the paucity of copper

for the manufacture of vitriol and Bordeaux mixture for the

extermination of tree parasites, had not suffered by the war. The trees

bore as usual, and fruit crops were generally what they had been before.

Nor had there been an increase in operation expenses, aside from what

little extra pay there was given those who gathered the crop.

But the Schwarzenbergs and a few others made up their minds that they,

too, would get a little of the war profits. They also were heavy

investors in war loans.

So long as this corner was confined to prunes and other fruits the thing

presented no great problem--as problems went then. But the activity of

this particular ring did not stop there. Its members dealt in everything

the soil produced.

During the first months of the war there had been set aside by the

several military authorities certain agricultural districts from which

the armies were to be supplied with food, forage, and the like. The

idea was not a bad one. The armies were voracious consumers, and a

scheme which would concentrate over as small an area as possible the

supplies needed meant a great saving of time and effort when shipments

had to be made.

That would have been very well had the several governments bought all

supplies from the producer direct through the medium of a purchasing

branch of the commissary department. Such was not the case, however. The

government continued to buy through war purveyors, who had, indeed, been

curbed a little, but only in exchange for other privileges. Standing in

well with the military, these men were able to sell out of the

commissary-supply zones what the armies did not need--poultry, butter,

fats, and eggs, for instance. These little side lines paid very well. I

remember discovering on one trip that near Prague could be bought a

whole goose for what in Vienna two pounds would cost. Since the Bohemian

geese are never small birds, and weigh from nine to twelve pounds, this

was a case of five to one. When in the cities butter was almost a thing

unknown, I was able to buy in Bohemia any quantity at the very

reasonable price of twenty-seven cents American a pound. In Vienna it

cost one dollar and thirty cents a pound after the food shark had been

satisfied.

The military-supply-zone arrangement made exports from districts

affected to the large population centers impossible, except upon

special permit, which was not easy to get by the man who had no

"protection," as they put it in Austria. The food shark always

interfered. In doing that he had a sort of double objective. Scarcity

was forcing up the prices in the cities, and when the government had

been persuaded that the prevailing maximum price was not "fair to the

farmer" the shark had a reservoir to draw upon.

I found a similar state of affairs in Galicia. On the very outskirts of

Cracow I ran into a veritable land of plenty. The military zone had

completely isolated this district, and while elsewhere people had not

seen butter in weeks, it was used here for cooking, and lard served as

axle-grease. Finally the zone was opened to the civilian consumer. But

this concession benefitted only the food sharks. In the population

centers prices remained what they had been.

I found similar conditions in Germany, though the cause was not entirely

the same.

The Mecklenburg states still have a government and public administration

scheme that has come down to our day from the Middle Ages without much

modification. They have no constitution as yet, and they would have no

railroads, I suppose, were it not that their neighbors had to get access

to one another through these principalities. The two countries are

hard-boiled eggs indeed. And the Mecklenburgers are like their

government. I understand that some enlightened ruler once offered his

people constitutional government, but had a refusal for his pains.

Enough food had been hoarded in Mecklenburg to meet all Germany's

shortage three months. But nobody could get it out. The Imperial German

government had no say in the matter. The several German states are as

jealous of their vested rights as any American State could possibly be.

And the Mecklenburg government had little influence with its farmers.

The case was rather interesting. Here was an absolute government that

was more impotent in its dealings with its subjects than constitutional

Austria was. But the Mecklenburg farmers were of one mind, and that

quality is often stronger than a regularly established constitution--it

is stronger for the reason that it may be an unwritten constitution.

The cellars and granaries of Mecklenburg were full to overflowing. But

there the thing ended, until one day the screws were put on by the

Imperial German government. The Mecklenburgers had been good war-loan

buyers, however. Hard-headed farmers often prefer direct methods.

In Westphalia they had similar food islands, and from Osnabrück to the

North Sea victuals had generally to be pried loose with a crowbar. There

the farmer was the peasant of the good old type; he was generally a hard

person to deal with. It was shown that while he did not mind being

classed as low-caste--_Bauernstand_--he also had cultivated a castal

independence. He would doff his cap to the government official, and all

the time resolve the firmer not to let his crops get out of his hands

in a manner not agreeable to him.

Passive resistance is too much for any government, no matter how

absolute and strong it may be. It can be overcome only by cajolery.

The clandestine food-buyer had better luck, of course. He knew how to

impress and persuade the thickhead, and then made the dear general

public pay for this social accomplishment, which may be as it should be.

He also frustrated the plan of the government. Pennies so mobilized did

not always go into war loans.

To the men in high places this was not unknown, of course. They realized

that something would have to be done soon or late to put this department

of war economics on a smooth track. Appeals not to hoard and not to

speculate in the interest of the nation were all very well, but they led

to nothing.

Still, it would not do to undertake the major operation on the vitals of

the socio-economic organism which alone could set matters right. More

doctoring was done during the summer of 1916. Those who did it were

being misled by the will-o'-the-wisp of a good crop prospect.

In August of that year I had an interview with Dr. Karl Helfferich, the

first German food-dictator. He was averse just then to more food

regulation. He had done wonders as it was. Everybody knew that, though

he was most modest about it. More regulation of the economic machine

seemed undesirable to him. He did not want to wholly unmake and remodel

the industrial and commercial organism of the state, and preliminary

crop reports were such that further interference seemed unnecessary at

that moment.

As it was, the rye crop of Germany met expectations. Wheat fell short,

however, Oats were good, but the potatoes made a poor showing, as did a

number of other crops that year.

Crop returns in Austria were disappointing on the whole. The spring had

been very wet and the summer unusually dry. When the harvesting season

came a long rainy spell ruined another 10 per cent. of the cereals.

Potatoes failed to give a good yield. In Hungary the outlook was equally

discouraging, and reports from the occupied territories in Poland,

Serbia, and Macedonia showed that what the "economic troops" and

occupation forces had raised would be needed by the armies.

To fill the cup of anxiety to the brim, Roumania declared war. The

several governments had made arrangements to give furlough to as many

farm-workers as possible, that the crops might be brought in properly.

The entry of Roumania into the war made that impossible. And the moment

for entry had been chosen well indeed. By reason of its warmer climate,

Roumania had been able to harvest a good three-quarters of her crops by

August, and the Indian corn could be left to the older men, women, and

children to gather. But in the Central states it was different. Much of

the wheat had been harvested, and some rye had also been brought in,

but the bulk of the field produce, upon which the populations depended

for their nourishment, was still in the fields.

I have never experienced so gloomy a time as this. There was a new

enemy, and this enemy was spreading all over Transylvania. The shortage

of labor was greater than ever before, with the weather more

unfavorable.

What the conditions in Austria and Hungary were at that time I was able

to ascertain on several trips to the Roumanian front. Cereals that

should have been under roof long ago were standing in the fields,

spilling their kernels when rain was not rotting them. Those who were

left to reap struggled heroically with the huge task on their hands, but

were not equal to it. If ever the specter of famine had stalked through

the Central states, those were the days.

All this left the food shark undisturbed. He laid hands on all he could

and was ready to squeeze hard when the time came.

The Iron Ration: Three Years in Warring Central Europe · 第 35 / 83 题