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VI

All I propose to do now is to give an account of some events in Germany since the effective exclusion of cotton, and of the measures to which the government has resorted. I shall leave the reader to draw his own conclusions. As to the facts there is no doubt; there is no need to rely on the biased newspapers of adjacent countries, on the reports of traveling neutrals, or on secret information. In order that the government's measures may be carried out, they have to be published: the Reichsanzeiger, with its official notifications, regularly reaches other countries. Unless all the leading papers of all parties are suppressed, the facts about prices and employment get into print somehow, sooner or later. Though the German War Office warned the public, early in September, not to answer inquiries about trade, even from neutrals in Germany, without first getting permission, a great amount of exact statistical information does get out. In what follows I shall have no occasion to make any assertion which is not derived from reliable German sources.

I have neither time nor space to deal with Austria-Hungary. It is sufficient to say that in most of its economic measures in all, I think, that have to do with textiles - Austria-Hungary imitates Germany, lagging behind by an interval which varies from one month to four.

In Germany the command of the situation has been taken, almost from the first, by the War Raw Materials Department of the War Office, with its series of control offices and information bureaus for each of the chief textiles. The primary intention of its action is, not to provide for the needs of the civil population, but to secure, if possible, the supplies required for the army. And the measures on which it

decides are announced, and presumably more or less enforced, by the military commanders of the several Army Corps districts.

It will complicate the story if I try to include the minor textiles silk, flax, hemp, jute. And cotton and wool it will be necessary to take together; partly because a stringency in the supply of one quickly makes itself felt in the other, owing to the possibility of substitution; partly because most textile districts are dependent on both; partly because the operatives belong to the same unions of 'textile workers.'

The war began by bringing great distress. In the first two months there was much short time and a great deal of unemployment. But the situation was relieved in two ways: by the progressive calling-up to the army of male operatives and by the pouring-in of government orders. Unemployment rapidly decreased until, in the largest of the two textile unions, that of the Social Democrats, it was in March only 4.1 per cent. The price of raw cotton in July, 1914, was 65 pfennigs per pound; in December it had risen to 91; the price of yarn, at the two yarn exchanges, those of München-Gladbach and Stuttgart, rose 40 per cent, or to much the same extent. But, with the arrival of fresh supplies of the material at the beginning of the new year by way of Sweden and Holland, as already mentioned, raw cotton dropped to 75 pfennigs, and the price of yarn fell in like proportion.

The import of wool was severely curtailed some months before that of cotton, simply because the chief exporting countries were British. Prices rose more rapidly; and before the end of November military-clothing manufacturers were complaining of the scarcity of imported wool. The government thought it necessary to take strong measures quickly; and on December

22, 1914, it enacted a set of maximum wool prices. But I believe there is no important commodity as to which a policy of maximum prices has been found successful in Germany: the holders invariably keep back the supply, if there is any chance (and there often is) of somehow getting better terms. So it was with wool; and early in March the government declared an embargo on all stocks of native wool of the 191415 clip, whether already shorn or not, reserving the whole for army contracts.

The same month of March saw the end, also, of relatively inexpensive cotton, as a result doubtless of the new English policy of March 11; and in spite of the large number of both men and women who left the mills for munition work, the unemployment figures began slowly to rise. In May, both the chief industries received a fillip from the new army orders for summer clothing. But apparently the tightness of the woolen market had not relaxed; and in the middle of the month all existing stocks of army cloth or of materials for it, in any stage, were commandeered.

In the beginning of June, with the blocking of the Italian avenue, the situation in the cotton trade began to look threatening. The Saxon export business was confessed to be quite gone; and, with the rise in cotton prices, the spinners of South Germany began to insert cancellation clauses in all their contracts. The government's first tentative measure, on June 1, was to call for the notification of all stocks of old cotton rags and new cotton waste, and to declare their expropriation for the use of the state. The War Materials Department next held a conference of representatives of the cotton interests; and although it was assured, on inquiry, that there were stocks to meet the normal demands of peace times for eight months, it determined, 'purely as a pre

cautionary measure,' to set on foot a plan for 'the conservation of supplies.' These conclusions were arrived at, it would seem, a few days before June 12, 1915; the eight months' lease of life, therefore, if it is a valid one, and if it is not renewed, may be expected to run out about the first week of February, 1916. But the trade journal which reports the calculation expressly limits it to peace-time consumption, and adds, "The present abnormally large military requirements cannot and must not be reduced.' The price of cotton, which had been 96 pfennigs in May, went to 128 in June; though even that figure now seems moderate in comparison with prices subsequently paid for any small lot of cotton obtainable on the market. A standard count of yarn, No. 30, Pinkops, was quoted on the Stuttgart exchange before the war at 202-206 pfennigs; on June 21 the quotation was 342-352. We are not surprised to learn that the officials of the exchange determined, therefore, to publish no more quotations. In the Rhenish-Westphalian district quotations went on being published, at any rate down to the end of August. They remained on the high level of June, occasionally moving up a few pfennigs; but the fact seems to be that there have long ceased to be any ordinary market transactions, owing to the measures of the government now to be described. A competent German trade expert gave it as his opinion that during June 'not a gramme of cotton had found its way into Germany.' The consequence was the order of July 1, to take effect on August 1.

The purpose of this order-recognized as its purpose by all the German papers was to reserve for military requirements a very large part of all the cotton in the country. Unless the materials could be proved to have been imported since June 15, 1915, it was

prohibited to manufacture wholly or chiefly of cotton (1) stuffs for domestic and table use, (2) stuffs for house-furnishing, (3) ribbons, tapes, and haberdashery in general, (4) embroidery, lace, and velveteen, and (5) stuffs for body-linen, bed-linen, and clothing 'for which yarns under No. 16 or over No. 32 are used, also all cloths in the manufacture of which more than five shafts are used.' Evidently the exact scope of the order depends largely on the qualification quoted. I have not the technical knowledge necessary for a personal opinion. Some of the German newspapers, while allowing that 'the production of many articles used in civil life is no longer permissible,' minimized the order on the ground that it would affect only 'superfluities' or 'luxuries.' On the other hand, the trade journal of the clothing industry describes the order as practically amounting to 'the total stoppage of the German cotton industry, except in so far as it is engaged in the production of military supplies or of certain specialties.' Anyhow, there was a great outcry in the textile districts. The first effect was to set the mills feverishly at work to use up as much of their stock as possible during the month; but there were gloomy forebodings of the future. In the Chemnitz area it was declared, possibly with some exaggeration, that 30,000 hands would be thrown out of work; it was judged expedient to prohibit all meetings in that neighborhood unless the resolutions had been first submitted. The order came into force on the appointed day; but the remonstrances were so numerous and weighty that, on August 13, the order was so far relaxed as to allow of the manufacture, for three weeks only, of articles of all kinds for all purposes (including military), to one third of the normal amount, reserving to the government the right to requisition any part of it.

Even this the Frankfurter Zeitung characterized as a weak 'concession to existing prejudices.' The control of textile materials, it declared, was going to be in future the 'most pressing' of all the raw material questions; and though 'policy' might necessitate a temporary postponement of severer measures, the sooner they were resorted to the better. The government did its best to live up to the spirit of these injunctions by ordering, on the same date, that no stocks of raw cotton should be kept back by merchants: they should be disposed of to spinners within two weeks.

It is not easy to ascertain exactly how far the more or less complete limitation of the cotton and woolen mills to military orders has so far affected the operatives. If sufficient material were forthcoming, it might have made a difference only to those skilled workers in luxury branches who could not adapt themselves to army work. There is reason to believe, however, that the two great trades, whether working on army account or not, have for some time been shrinking. The big Social Democratic union before the war had 80,902 male members and 52,122 female. In the first twelve months of the war 37,074 men were called up to the army. But instead of 43,828 men remaining in the factories and on the books, only 37,650 retained their membership in July last, - a shrinkage of some 14 or 15 per cent; while of the women the shrinkage in membership was 23 per cent. The loss was apparently due to their going into munition works. Of those remaining on the books, 6.4 per cent were out of work in July, and 24.6 per cent were 'on short time and reduced wages.'

Such was the state of things the month before the new forcible restriction came into effect, and while there was the temporary burst of activity.

How the situation presented itself a month later may be gathered from an article contributed to Soziale Praxis on August 19, by Herr Schiffer. Soziale Praxis is known to all economists for its very competent editing, and Herr Schiffer is the chief official of the Federation of Christian (that is, non-Socialist) textile workers, which is strong in Rhineland and Westphalia. Here are some portions of it:

"The British naval predominance tends to cut off completely from Germany and Austria all oversea imports of raw materials,' though it 'concedes to neutral countries just the minimum of materials required for their own industries. Hence a distressing scarcity of raw materials for the textile industry cannot be avoided. . . . The economic results manifest themselves inevitably as time proceeds. . . . It is urgently necessary that those male and female operatives, whose employment is rapidly dwindling, should be drafted into other occupations as soon as possible.

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"The difficulties, however, are not slight, for the male workers in the prime of life have been called to the colors. The workers who remain elderly men, lads, women, and girls (constituting before the war 53 per cent of workpeople employed) cannot well be transferred to other occupations, except to a comparatively slight extent. The peculiarities of the textile industry render difficult any large transference of operatives to other industries. Generally the operatives are settled residents; and for them compulsory sudden migration would be a serious hardship. Moreover, the industry is generally confined within well-defined districts; and in these it is the predominant occupation. For this reason the communes concerned (which are mostly poor) find that their resources are inadequate to sustain the demands made

upon them for the relief of unemployed operatives. ...

'It will hardly be possible to assume that in the ensuing autumn and winter, when the crisis has been reached, the transference of unemployed textile workers to other occupations will be an adequate measure of relief. Offers of work in unfamiliar urban occupations, or in agriculture far from home, will be inadequate for bread-winners, unless the wages be high enough to allow them to remit considerable sums to their families. Hence imperial and state subventions in aid of wages will become necessary.'

I shall not try to pursue the matter further in detail. But apparently the subsequent course of events has been such as might have been predicted. In August, during the three weeks' respite the unemployment percentage in the largest textile union rose from 6.4 to 8.1., and in September to 10.4. In the middle of September the whole of the new wool clip of 1915-16 was taken on requisition for the army. Early in October, in preparation for the coming winter, the military authorities laid an embargo on all blankets and coverlets of wool, cotton, or mixtures. Meetings were now arranged of the local authorities in the several textile districts to create the necessary organization for dealing with unemployment; which was staved off in the Elberfeld district only by the shortening of hours and the introduction of 'holiday shifts.' And before the month was half over, the imperial government, which had repeatedly told the people that labor could easily be transferred, agreed to contribute 75 per cent of the public relief given to unemployed textile workers.

VII

If the German submarine blockade of Great Britain, shocking as it has

been to feelings of humanity, had exercised any serious effect upon Britain's supplies of food or raw materials, there might have been something to say for a proposal that Britain should abandon her effort to exclude cotton from Germany in return for the removal of the submarine peril. Although it might not have been acceptable, considering the military use of cotton for explosives and equipment, it could have been seriously put forward. But the submarine peril, never very formidable, has already been overcome, and it never seriously endangered Britain's food.

During the first six months, the losses by war of British cargoes, according to most carefully compiled statistics, were only two thirds of one per cent of the values carried; during the second six months, they fell almost to one third of one per cent. The prices of food have indeed risen-approximately half as much as in Germany. But that rise is itself largely due to the extraordinarily high wages the people are earning. Explain it as we may, there is no doubt that the material condition of the British working classes is one of unprecedented prosperity.

THE BALKANS AND DIPLOMACY

BY J. W. HEADLAM

I was reading the other day, in some English paper, the observation that the quarrels of the great powers were now transferred to Eastern Europe and had involved the Balkan States. Nothing could be further from the truth. The recent events in the Balkans are not a mere extension of the great European war; we must never forget that in the East we must find not only the occasion but the cause of it. For a hundred years it has been foretold that when the inevitable catastrophe of Turkey took place, the fire which arose in the East would spread through the world. This has now happened. Not only was the difference between Serbia and Austria the occasion of the war, but in the East is a deeper cause to be found.

And in the East, too, we can see most clearly the great principles which are at stake. Writing at a moment when the whole world is watching hour

by hour the tragic issues of a struggle in which the future of the nations is involved, it may be worth while to pause for a moment to consider, not the daily bulletins, but the greater issues for which the war is being waged. Whatever may be the event of battles and diplomacy, this cannot be changed. On the one side we have the effort by Germany, in alliance with Turkey, to establish herself as a predominant power in the Near East; on the other, the Allies fighting for the establishment of the Balkan States on the principle of the self-government of the peoples.

To understand all that is involved, we must go back to the past.

I

To those who are acquainted with the past of the Eastern problem, nothing can appear more paradoxical than

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