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About The Sunday Oregonian. (Portland, Ore.) 1881-current | View Entire Issue (Sept. 27, 1914)
6 THE SUNDAY OREGOXIAX, PORTXiAJTD, SEPTEMBER 27, i914. 000.0010.INMERIWI IT", Germany is; the . ' ' . f! 17 .. .. v Trade PARALYZED, ooo. .sssssJI WAR, DID BY -CHARLES M. PEPPER. GERMANY'S floating trade, an nounced one of the earliest of the London war bulletins, "is para lyzed." Then came accounts of rich sea prizes taken by the British war chips in various parts of the world. The foreign commerce of Germany in riormal times amounts to $5,000,000,000 annually. The bulk of this commerce Is sea-borne traffic' Hamburg, Bremen and Lubeck know the meaning to all Germany of a para lyzed world fleet. So do the cities of Dortmund and Cologne, centers of iron and steel production; Chemnitz, in Sax ony, the center of the textile and' hosiery Industry, and Solingen and Hemecheld, whose cheap cutlery and hardware and hand tools j have won their way in the1 world's markets. So does Dresden, with its pottery manu factures and scores of other industrial centers which have their own special ties. The German merchant marine is the Visible expression of the industrial and Commercial development of the German people. It is actually 1000 industrial communities afloat. It reflects the evolution since 1870 of disconnected agricultural kingdoms into an indus trial and' commercial empire based on militarism. German Idealism may have been lost In the evolution. The German retort to this suggestion is that such a thing as British idealism never existed and that Germany, having had something and lost it. is better off than England, Which never had it to lose. The thousand industries which make HP Germany's floating trade reflect In the highest degree the - German genius for organization. Science and system have combined to apply to trade and Industry modern discoveries, and the result is a commercial marine to carry under the German flag the practical fruits of these industrial applications. The chemical Industry usually is taken as the most striking illustration cf German capacity for bending science to utility. The German laboratories ad mittedly are in the forefront. The anxiety caused by the prospect of the textile industries of the United States being unable to get German chemicals Is too recent an Instance to require comment Aniline dyes are most commonly cited in connection with the chemical industries. A few years ago India was bemoaning theloss to native agricul ture from the lessening of the market for indigo. Germany, which had been importing several million dollars' worth of natural Indigo, suddenly be gan using in its own industries, the manufactured product as evolved by the German laboratories. It also ex ported large quantities of this arti ficial indigo. And in consequence' the raising of indigo in India ceased to be profitable. The electrical industry is another example of Germany's initiative. It to day is one of the greatest of the Ger- man industries both in the domestic market and in the export trade. No detail escapes the attention of the pa tient German electricians. Quite re cently success was reported in se curing a carbon filament lamp to re place the metal filament used on tram ways. "While German manufacturers have taken the initiative in many lines, they do not hesitate "to import ideas. A few years ago a branch of an Ameri can machine tool works was estab lished in Germany. It' grew until it rivaled the original works in tho TTnited States. Then it - was made known that the German works had ab sorbed the entire plant patents, draw ings and minutest specifications. The Germans found that American invent ive genius had done more than they could do of their own Initiative. Textiles are one of the most highly developed of the German industries. They also are one of the most profit- able, and the one which most ire- ways on his own terms. ruently comes in conflict with the cus- ' The iron and steel industry does not toms authorities of the United States, differ from other German Industries In In the last year 173 stock companies its human equation. The human factor engaged in cotton spinning and weav- ta a mechanism and not a mind. The tng-, worsted spinning, woolen manu- individual In the German industrial or Cacturing, linen and iute spinning and gajiization is as of little consequence ether branches of the textile Industry, a8 jn tno miltary organization, paid $7,200,000 in dividends on a nom- Whatever views may be held of the inal capital of $84,500,000. The lowest difference between German character dividend was 5.7 per cent and the and American character or English highest 12.1 per cent. character, -the human Industrial ma- The iron and steel industry is the chine of Germany, which has achieved real measure of Germany's material" such marvelous success in' the develop civlllzation, as it is of the United ment of German trade and commerce. States and of Great Britain. The float, cannot be overlooked. Since Bismarck lng trade rests on it, for it furnishes laid down his dictum on the right to a large share of the exports. Iron and work Germany has taken the lead in eteel products come more keenly Into what is now commonly called welfare competition with similar products of legislation. ether countries than almost any other Bismarck was speaking of Industrial articles. insurance. Since his time Germany has The progress of the German iron and provided for accident insurance "with a eteel industry is often cited, and with large measure of responsibility thrown some justice, as an example of Ger- on the employer. Its system of invalid man capacity for overcoming natural insurance and insurance against sick obstacles. In this case, the natural ness has been minutely worked out, as obstacles were the lack of raw materi- has the system of - old-age pensions, als which could be easily assembled. It has not yet undertaken to insure The coal deposits are ample; The against unemployment, but the-mu-hulk of the coal comes from the Rhein- nicipal labor exchanges and similar ish-AVestphalian district, and in this bodies which are directed by the mu . district the Ruhr basin is the chief rdcrpalities or by the state tend in tfkat source of supply. Silesia, In Eastern directions. V Prussia, is the other source. Germany ' When Chancellor Lloyd George star imports less than 20,000,000 tons and tled England with his "proposals, f or exports double the quantity, soNthat in old-ase pensions and similar welfare any given year the native supply is sufficient for all domestic and indus trial uses, as well as for coaling the merchant marine when in German ports. The lack of ore beds in German ter- a S-Itory was pronounced until the an- xiexation of Alsace-Lorraine. The Lor raine deposits then became available, along with those of Luxemburg, which ingmen's organizations, notwithstand is a member of the German customs lnB apparent benefits, were inclined to union. In late years some ore also question the system 'on the ground that has been drawn from the adjoining Ueurthe-Mosene districts in France. Should victory crown tho German arms, there is little question that the ore beds of the Meurthe-Mosene dis- trict would be a strong incentive to the annexation of that territory, Just as were the ore beds of Alsace-Lorraine In 1870. Swedish and Spanish ore in many millions of tons supplement the production of Luxemburg and Lorraine for the German blast furnacea Notwithstanding the necessity of de- pending so largely on foreign ore sup- ply, Germany, with its coal deposits as a basis, has taken front rank In the production of Iron and steel la all if - r' -23... Mirr?fiw' i IJvvt ::rS .vJ II . r forma A few years ago it 'passed Great Britain in the production of pig iron, and since then the world rivalry between the two countries has been more pronounced. - Great Britain herself had to take large quantities of the surplus prod ucts of the German iron and steel mills, while in her own dependencies, such as British India, she found sharp competi tion from Germany. British-owned rail ways in the Argentine republic fre quently bought steel rails from Ger many. Brazil and Chile and' other South American countries where Brit ish capital predominates are also good customers of Germany. In the Orient England's political ally, Japan, in some years has been a very heavy buyer of German steel rails and other material. In the finished prod ucts the English industry probably has suffered more from German competi tion in cutlery than any other single article. The German Iron and steel production has produced several notable captains of industry. - The elder Krupp, be cause of the great gun works at Essen, was the best known. One of those who came a little later and who is still liv ing, is August Thyssen. Herr Thyssen is often compared to Andrew Carnegie. He is bold and aggressive, probably the most daring figure that the Indus try has produced. Another captain of industry is Prince Henckel of Donnersmarck. He is im mensely rich, but his enterprises are not confined to iron and steel alone. Prince Henckel is a free lance and is the terror of the syndicates and trusts, which never know whether or not his mines and works will be in the com bination. - When they are in. it is al- " " ' , . but likewise the details of his whole scheme from a careful study of the German system. During several months spent in the Industrial districts of the Rhine, at period of depression, I had some opportunity to learn the views of both employers and workingmen on this general subject. Some of the work- the enforced contributions kept wages down, and also restricted their freedom ot action. Most of the employers corn- plained that the workmen were losing their independence and were becoming an ls efficient Nevertheless, the general view was that Germany could not have built up its powerful industrial organization and become such a factor In world trade without the plans of Bismarck and the economists and thinkers from whom he got his Ideas having been Pu Into e'fct. The standard of living of the artisan, hoverer does no teem $ be raised. 'i r iff x a r A l i y v w - ' Investigations by the official agencies two years ago showed that the family market basket was too often light, and estimations by the official asencies m that frequently it altfo represented a deficit in income. But generally the German contention Is that while there is much poverty there is little pauper ism as compared with England, and that in the economic and trade con test between the two peoples poverty is less a handicap than pauperism. Recurring to the industrial evolu tion. Germany began building a mer chant marine as soon as it became ap parent that her factories would have surplus products to sell. Immense quantities of raw materials had to be Imported and the settled national pol icy came to favor Importing these raw ITALIAN ACT LOOMS TP IE reason that Italy held off from its allies in the triple alliance is written large in its history. The grandfather of the present Kink of Italy, Victor Emmanuel , of Sardinia, with Cavour's guidance, made an alli ance with Napoleon III, and picked a quarrel with Austria in 1859, much as Bismarck in 1866 made a treaty with Italy and picked a quarrel with Austria. In each case these nation builders de liberately provoked war as a means to the unification of Iheir country. In the campaigns of 1859 Lombardy was taken from Austria. In 1866,. in alliance with Prussia. Italy went to war with Aus tria again, this time chiefly as a result of the Prussian victory at Sadowa, re ceiving Venetia from Austria. Austria was held to be the chief enemy of Italy's Independence and unity. Deesplte this, however, in 1882 Italy joined Ger many and Austria in the Triple Alli ance. 'This nnnatural alignment was entered into- chiefly because France, Italy's normal ally, had blocked her colonial ambitions in Tunis. Tet the alliance never made Austria popular with Italians, nor did It cover the Mediterranean or the Adriatic The head of the Adriatic is a constant source , of enmity between Italy, and Austria. In Trieste and Flume, seaports of Austria, the population is chiefly Italian. Italy has always coveted not only these ports but the Albanian shore of the Adriatic as well. She looks with suspicion upon the German-Austrian attempts to dominate the Balkans. Early in the Italian-Turkish war Italy began to bombard the Albanian coast. i " W-r materials and exporting the finished products In German bottoms. The government helped by various .forms "of subventions, but private en terprise has been a most potential fac tor in developing the German merchant marine. The Hamburg-American, with headquarters at Hamburg, and the North German Lloyd, with headquarters at Bremen, and their subsidiary compa nies, control one-half the ships which bear the floating trade that now is par alyzed. Hamburg, as a free port, "has' invited transit commerce from all the, world. The foreign trade policy of Germany is radically different from that of the United States. The government, in ef fect, is a partner in industrial and then held by Turkey. She was immedi ately warned off from Avlona by Aus tria. This added fresh vigor to ;the old' antipathy. Again the tension over the control of the Adriatic was so acute .'during the Balkan, wjir that there was even a possibility of hostilities be tween Italy and Austria. When, there fore, the question . of renewing the Triple Alliance came up in 1913, it was ' only with great difficulty that Ger many succeeded in getting Italy to Join " It, even though it was only a defensive alliance and did not include the Medl . terranean. The Italians look upon se-, ' curing Trieste and the control of the Adriatic as the French look upon re conquering Alsace and Lorraine. Austria stands fair In the path of this ambition. .The memory of former wars and the 'recognition of present conflicting qualities ' make the Italian people ' unwilling to support Austria. The Italian government's decision that . it was not bound to help Austria and Germany because they were not en gaged in a defensive war relieved it from entering upon a warlike policy which would probably have failed of public support- . Moreover Italy has nothing to gain by a war against the Triple Entente, unless it might be part of France's North. African possessions. The chance of acquiring these would hardly be worth exposing a long coast line to the French and English Mediterranean fleets. On the contrary a German-Austrian victory, would almost certainly work harm to Italy's hose to control In the AdriaticWorld's Work. -'"-:S . . 1 i as 3 commercial enterprises. Monarchical state socialism is applied to foreign trade Just as to domestic affairs. The government, or . rather the different states, own all but a small percentage of the railways, and the railways are operated In conjunction .rith the steamship lines to furnish an outlet for the products of the German fac tories. The government believes in rebates and discriminations. A system of ex ceptional tariffs for 'foreign points has been devised. There Is a discriminating schedule of rates for goods destined to European countries, and another for overseas countries. Special rates are provided for the Levant and 'South Africa. The cardinal principle of the German system seems to be that lower prices abroad are good for home production and the railway rebates and discrim inating' rates for overseas traffic are accepted philosophically. Xn a general way it might be said that ln many products the German consumer does not complain vociferously if he pays a third more than the foreign consumer. The only exception to' this practice is In the case of potash. When, in 1910 American 'capitalists made shrewd contracts with some of the owners of German potash mines,, the Government stepped in and abrogated those con tracts. There, is nothing in the Ger man constitution against the impair ment of contracts. The principle which the government followed in this case, however, was that the American farmer should not have the privilege of buying his potash fertilizer cheaper than the German farmer. From its position as a silent partner In Industrial and commercial enter prises it may be assumed that the at titude of the German government in regard to trusts and syndicates is not hostile. If not one of actual approval. Its attitude usually is one of .benevo lent neutrality. The greatest of all the German trusts, insofar as relates to the effect on for eign trade, at least, is the steel works union, or Eteel syndicate, whose 'exec utive headquarters are "at Dusseldorf. While at Dusseldorf one Fall I under took to read up on the syndicates gen erally, and this one in particular. A German friend told me that the reich stag had been engaged for several years in investigating the subject, and he kindly filled the table with the pre liminary reports. With German thor oughness he had read them. I took his word for the substance of them and reached the conclusion as to the friend liness of the government to the syndi cates. Government attitude, however, is not in all cases an approving one, or even a neutral one. The powerful West phallan coal syndicate came In con flict with It, and the government un dertook to carry out Its policy of con trol by acquiring shares. The syndi cate, after the most approved stock methods. Issued, additional stock to itself. The case was carried to the courts and the - government was beaten, but the threat of .nationalizing the coal mines apparently bad a restraining in fluence on the coal syndicate, and for m, time there was lesi complaints that Till V" 7 nr. 44 i S f 4 S 1 s . 3 s ,. ...... . . v.. tv.- ... 7?& ?y Ate? &j-e3e-c. its prices were destructive to German industries. Some of the syndicates, left to them selves, have fallen by their own weight and some have gone to pieces through spreading out too much. Not long ago the failure of what was known as the princes' syndicate was announced. Royal personages and their partners had gone into everything from fac tories to department stores in Berlin. 1 . - ' So far as relates to foreign trade, it may safely be assumed that there will be no change in the German policy re garding syndicates. The steel syndi cate was renewed in 1919 for a period of five years. The war is not expected to end its existence. The international syndicates In which German industries are members, of course, find their ac tivities completely paralyzed. With an understanding of the gov ernment policy toward export trade, and the share of the syndicates in pro moting it. a more comprehensive view may 1e had ' of the whole subject of Germany's foreign commerce. It is possibly something more than a coincidence that last year in these totals of the $5,000,000,000 of foreign commerce the Imports and exports al most balanced each other. The imports, due to the raw materials wanted for German Industries, exceeded the ex ports by only . $150,000,000. It is also notable that the tonnage of inflowing and outgoing traffic almost balanced. In metric tons the imports were 73, 817.000 tons, and the exports 73,751,000 tons. German bottoms, therefore, came and went with about the same 'quan tity of cargo. Germany's trade with ' the United States, which is so completely par alyzed by the war, is a one-sided one. That is, Germany imports Very largely raw materials from and sends them back in the form of finished product. Cotton and copper are the chief Im ports. The. Southern cotton growers, for the time being, lose the market for 400,000 tons of cotton. .The grain mar ket, it may be presumed, is- not closed so effectually as that for cotton. Pe troleum is srut off and an. interesting question will arise when Germany emerges from'c the war whether the plan to drive out the Standard will be persisted In. " , The extent to which the United States may succeed' in making for It self articles now imported from Ger many is a problem. Something may be done In toya,., but the hand-made toys of the Harrz Mountains can only be made by the Hartz ' villagers. It would' seem that by this time cotton mills in the United States ought to be able to supply some of the .fabrics heretofore furnished by Germany. The same observation applies to enameled iron ware and fine cutlery. The real loss to Germany, of which advantage may be taken, is In her trade with the neutral markets of the world, and possibly from the loss of ' some of her colonies. Nobody now knows how the war will leave German ' East Africa and Southwest Africa on the map. The foreign trade of the German col onies, outside of Kiau-Chau. which can hardly be now considered a colonial possession,- approximates $50,000,000 annually. A big question will b what LB 1 I - r" country shall have the diamond fields. Germany has held the trade of her colonies under a close bureaucracy, which gave little opportunity for out siders. Tet Germans have always traded very successfully in the British colonies, and it Is not improbable that a change of flags would still leave the bulk of the trade In the hands of the Germans. In a previous article I have outlined the trade of Germany with South America, and there is little to add. England herself wants the bulk of that $175,000,000 which South America im ports from Germany, but the United States Is in a far better position to ob tain whatever percentage ultimately may be obtained. The Electric Railway Which Attracts Capital. WHAT class of electric railway proj ects are bankers most Interested in at present, city or lnterurban? They are most interested in going concerns in the larger cities and centers of population. Under conditions as they are at present they do not care much for lnterurban roads. This is largely because the best-earning locations are already occupied. Many small cities at from 6000 to 15.000 population are coming into the market and asking for financial help In building roads. Usually towns of this size are not re garded as favorable fields for financ ing. The average earning power for an electric road In such communities is too small. It Is hardly possible. In my opinion, to say what parts of the . country hankers and investors look upon with the greatest favor, so far as electric railways are concerned. It depends entirely on the size of the city the larger the better, fgr the 'earnings of electric railroads depend almost al- togetner on passenger trarric. It' has been generally - considered that from 800 to 1000 population per mile of track, exclusive of the prin cipal terminal city, should be the min imum for an electric lnterurban rail way. That means the population in a strip three miles in width on each side of the track, or six miles in total width. There are many individual cases, however, where- the character of the population or Industries are such -as to make lnterurban railways good Investments yielding satisfactory earnings from a lower population per mile. ' With a city railroad the dis tances of travel must be sufficieint to induce patronage of the cars, and this fact explains the general lack of suc cess of lines In small towns. Electric Railway Journal. Blessing. (Los Angeles Times.) Walter Damrosch, the musician, has a horror of the crude musical amateur. At a luncheon in New York, Mr. Damrosch said politely to an old tody: "Tour daughter doesn't sing any more!" "No." said the old lady. "Since the birth of her two ltttle girls Mary has been no occunled that she's hart tn rlvn up her singing." Mr. Damrosch sighed. "After alt," he said, "children are a great blessing, aren't theyX"
