Book: The Audacious War

C >> Clarence W. Barron >> The Audacious War




An Englishman two or three years ago took it upon himself to find out
how far this legend might have its base in any near invasion. He
looked up the record and found that all the leading summer hotels and
strategic points were in the hands of Germans. Then one day he quickly
addressed his German waiter in his native tongue, demanding to know
where his post was in that town in the event of hostilities. Promptly
the German replied, "Down at the schoolhouse!" Further investigation
showed that every reservist had his allotted place before and after the
landing, and his place in the civic organization to follow. The
Germans had also compiled lists of the people of property in that
vicinity and exactly the character and amount of resources that could
be commandeered from them.

If the Germans were free to map England, why should they not be free to
map all its resources, individually as well as collectively?

I know a building in the heart of the London financial district that
carries on its roof a Zeppelin-destroyer gun. A few days before I was
last in this building a fine-looking fellow in khaki uniform entered in
haste and asked the janitor to show him to the roof that he might
quickly inspect that gun and see that everything was in order, as raids
might be expected at any moment. Of course, he was taken to the roof,
and his inspection quickly completed. Ten minutes later the London
police were there to inquire for a man in khaki uniform.

The English officer said, "Very singular, we are ten minutes behind
that fellow everywhere. He is the cleverest of all the German spies,
and we are not able to catch him!"

If that spy had been caught in his English uniform inspecting English
defenses, would not everything have been kept quiet in the endeavor to
pick up the lines of his foreign communications?

In writing home from England, even to my family, toward the close of
1914, I thought it just as well to be brief and not too definite with
any information. I had seen some of the censorship regulations and
envelopes resealed with a paper bearing heavy black letters, "Opened by
censor," with the number of the censor, showing that there are more
than one hundred people engaged in this work; and also directions from
the censorship that "responses to this inquiry must be submitted,"
etc., etc.

Nobody could believe until this war broke out and there descended upon
peaceful Belgium not only armies and demands for their shelter,
maintenance and food, and drink, but also huge demands for financial
indemnification--war tax levies upon cities, towns, and provinces, with
individuals held as hostages for their payment--that German war plans
meant the looting, not only of nations and states, but of individual
fortunes and properties.

It now seems that the march to Paris through Belgium and the imposition
of a huge redemption tax upon Paris and France were but the
preliminaries to larger demands upon London and England.

Indeed, judged by the demands upon Belgium, the German plans
contemplated the transfer of the wealth of France and the British
Empire to Germany; and such enslavement of these peoples as would make
Germany rich, powerful and triumphant for many generations, if not
forever, over the whole habitable globe. The German minister at
Washington sounded a true German note when he asked who should question
the right of Germany to take Canada and the British possessions in
North America. Were they not at war, and if Germany were able, should
she not possess them?

It had been understood before this war that countries were invaded
under ideas of national defense. But possession of countries for the
absorption of their wealth and the enslavement of their people, to work
thereafter for the victors, was believed a barbarism from which this
world had long ago emerged in the struggle for the freedom of the
individual.




CHAPTER XI

ENGLISH WAR FORCES

The Men at the Front--The Recruiting--English Losses--Horses and
Ships--War Supplies--Barring the Germans.


I really admire the English censorship and the manner in which it can
withhold information from the English people, and I see the usefulness
of much of the withholdings. You are some days in England before you
realize that there are now no weather reports--not even for Channel
crossings. Nobody really cared for them in London. Everybody there
knew what the weather was, and nobody could tell what it was to be. If
reports were printed, they would fool only the German Zeppelins; but
cable reports might be quite another thing. So you can't cable your
family: "Weather fine, come over."

Of course Germany should not be allowed to know the English forces,
their exact number and distribution. I was told over and over again in
good newspaper quarters in London that the English had only 100,000 men
at the front, and did not propose to have any more until Kitchener led
his army of a million men or more to the Continent next spring.

I, of course, said nothing, but I knew a great deal better, both from
War-Office sources and from contact with the English officers in France.

It would not be right, although information was not given me in
confidence, to attempt to name the exact number and position of troops
Kitchener had on the Continent toward the close of December. But I may
tell what anybody was free to pick up on French soil. I asked an
English officer of good rank how many men the English had at the front
and he responded promptly 220,000 at the front, and 50,000 on the lines
of communication. He was right for that date in early December, but
later more troops were sent over. Indeed, they were quietly going and
coming all the time across the Channel, and, notwithstanding losses,
the number at the front was being steadily augmented. There were also
troops in training on French soil, and 550,000 in condition for
shipment from England.

Kitchener is one of the greatest reserve-supply men in the world. He
is a natural-born banker; he keeps his eye on his reserves fully as
much as on his activities, and perhaps more so.

When he called for 100,000 troops the British public became weary and
demanded to know how long before he would get them. This gave an
impression throughout the world that English recruiting was very slow;
but when forced to show down his hand, Kitchener had to admit that
under the call for 100,000 men he had accepted many more and was still
accepting.

Then they raised the call to a million, and in December Kitchener had
more than 1,000,000 men under that call, but I was particular to
ascertain that he had not made a call for a second million. It was all
under the call for 1,000,000 men to arm.

But I did learn from authoritative sources that a house-to-house
canvass, and millions of circulars sent out, had received responses
that showed the War Office where the number of recruits, or men in
training, could be quickly put above 2,000,000 the moment there was
need or room for them.

When England sent her first expeditionary force of 100,000 men to the
Continent there was no public report of how steadily it was augmented.
The official announcement was simply that the line should not be
diminished and that all losses should be made good.

An American acquaintance of mine, whom I found in France fighting in
the uniform of the English, had made the declaration from his quick
perception of the situation at the outset that if before January 1 the
English should have sent over only another 100,000 men, they would have
only 100,000 left there at the end of the year.

I found his estimate of losses correct. The English casualties at the
end of 1914 were over 100,000,--killed, wounded, prisoners, and
missing,--or fully the number of the first Expeditionary Force.

Yet every week and every month the forces of the English grew larger
and never smaller. The filling in of the gaps and the augmentation of
the English forces and their maintenance, munitions, and supplies was
but the smaller part of the work of the War Office.

The great problem was to compass the situation as a worldwide war and
summon and put into an effective fighting machine the resources of the
Empire.

"Not alone the men but the machinery," said Kitchener, "must win this
war."

England had to put into operation machinery, financial and diplomatic,
machinery of men, guns, and transportation, belting the whole world and
bringing the whole forward as a complete organization, yielding here
and pressing forward there, but always firmly pressing to the one
desired end--the crushing, crumpling and destroying of the war
machinery of Germany. At the beginning England could not turn out
10,000 rifles a week; and a rifle can shoot well for only about 1000
rounds. Yet in December a single contractor in England was turning out
40,000 a week, and every possible contractor there and elsewhere had
his hands full.

Kitchener must compass every detail from the rifle to the supply base;
from the seasoned wood for that rifle right down to the number of
troops he must have on the Continent when it comes to a settlement;
for, says Kitchener, "You cannot draw unless you hold cards."

The broad sweep of the English preparations may be indicated by this:
that when war broke out England not only commandeered horses in every
city, village, and highway of England, taking them from carriages and
from under the saddle, but started buying them over the seas. Of
English shipping she gathered into her war-fold such a number of boats
as I do not dare to repeat. She gathered in under the admiralty flag
so many steamships from the mercantile marine that those which were
found most expensive to operate were soon turned back into the channels
of trade. With the many hundred steamers that she commandeered she set
about transporting everything needed, including horses, from over the
ocean.

The French bought their horses by the thousand in Texas and contracted
at good prices for their shipment to Bordeaux. Steamship rates became
almost prohibitive, and the horses arrived from their long journey in
poor condition. England inspected the horses in America, paid for
them, and then put them in charge of her own men on her own ships, and
landed them by the shortest routes in England and on the Continent, in
prime condition.

Although Germany had been buying liberally of horses in Ireland as
early as March, when the long arm of Great Britain reached out there
was no failure in her mounts for the cannon and cavalry divisions. For
good horses at home and abroad she did not hesitate to pay as high as
$350.

Americans should not forget that this war has brought about the
greatest contraction in ocean tonnage that has ever been seen. I
estimate that about one fourth of the world's oversea tonnage has been
commandeered, interned, or put out of service. Before the war the
Germans had nearly one eighth of the world's mercantile tonnage. That
is now interned, destroyed, or tied up, outside the trade on the
Baltic. As much more has been taken by the Allies from the mercantile
to the war marine. It must also be figured that the Baltic and other
seas hold locked-in ships, and the bottom of the sea likewise holds
some more.

Considering the sudden demand upon the world's mercantile tonnage and
its sudden curtailment, it is surprising that ocean commerce has not
been more interfered with or made to pay even higher rates than the
abnormal ones now existing.

Of war-tonnage, besides three superdreadnoughts purchased and four
finished before the end of 1914, the British have under construction to
be finished in 1915 ten battleships of from 25,500 to 27,500 tons,
armed with 15-inch guns. The French have finished four of 23,000 tons,
with 13 1/2-inch guns, and are finishing three more. The Russians are
at work upon six of 23,000 tons, with 12-inch guns. The Japanese are
building one superdreadnought of 30,000 tons, with 14-inch guns, and
three battle-cruisers of 27,500 tons and 27-knot speed, with 14-inch
guns.

Churchill, it will be remembered, figured that England could lose one
battleship each month and still maintain her full strength. While the
building of war-tonnage seems to be well in hand, there is no
corresponding replacement of mercantile tonnage.

I have the highest authority for the statement that the world possesses
no machinery at the present time to manufacture war-material at the
rate at which the nations of Europe have been using it during the first
hundred days of the war.

At one time the German armies were exploding 120,000 shells a day in
France and Belgium. The response from the French alone was 80,000
shells a day, and General Joffre made a request that his supply be put
up to 100,000 per day. This is for shells of all sizes, and the
estimate to me was of an average cost of two pounds, or ten dollars,
per shell. Some of the big German shells cost as high as $500 each.
In some kinds of shrapnel, holding 300 bullets, there are more than
thirty pieces of mechanism.

Within forty-eight hours after England declared war she had engaged the
total output of an American manufacturer, whose machinery was an
important part of the shell-making business. An American factory in
Connecticut received orders for $25,000,000 worth of cartridges which
would mean, at five cents a cartridge, 500,000,000 rounds of
ammunition. I know of a single order to America from England for
10,000,000 horseshoes.

Through a single agency in America more than $150,000,000 worth of
war-supplies was placed several weeks ago. I do not know whether this
included a single order, of which I have knowledge, for 3,000,000
American rifles, delivered over three years at $30 a rifle, or
$90,000,000. The company receiving this order had to work so quickly
to install new machinery that old buildings were dynamited to clear the
land.

Such orders to America are bound to tell upon our exports, and,
combined with the advance in food-stuffs, the loss in cotton values by
the outbreak of the war is offset more than twice over.

America must feel the effect of these orders when the goods go forward
in increasing quantities. They are paid for as promptly as shipped.
Many an American factory has been put on three eight-hour shifts for
the day's work on these orders.

A Southern manufacturer received an order for 5000 dozen pairs of socks
to be shipped weekly for six months. The price was under $1.00 per
dozen, with ten per cent of wool in them. He complained that he was
making only twenty cents per dozen profit, while if he had not been so
anxious for the order, he might just as well have got a price that
would have shown more than twice this profit.

In boots and shoes, England, instead of giving orders to this country,
has been buying leather in America, and filling all her own factories.
It is the policy of England to fill every workshop in her tight little
island before she permits business to overflow.

To-day there are no unemployed in Great Britain, except in the cotton
districts dependent upon German trade. Wage advances and overtime are
the rule rather than the exception. The one country that the warring
world must turn to for supplies is the United States, and that in
increasing measure. Orders for $300,000,000 of war goods already
received must be duplicated several times.

Every American automobile manufacturer able to deliver motor-trucks in
lots of one hundred, has received his orders for shipments to the
Allies.

Germany has now no base from which to get many important supplies. In
a long contest the Allies will supply motor-cars, shells, guns, and
ammunition to a far greater extent than Germany can manufacture them.
Factories for this work are expanding in both Russia and America. The
English do not speak against the Germans as a people. They believe
them seriously misled by Prussian militarism, which they declare must
be crushed absolutely.

Where formerly England was an open door to Germans and suspicions
against German spies were laughed at, the bars are now sharply up.
Most of the golfing clubs have voted to suspend the activities of
members with German antecedents.

At the clubs in Pall Mall, notices have been posted requesting members
not to introduce during the war Germans or those of German descent.

Membership on the Stock Exchange is not continuous as in this country,
and at the March elections in 1915 there will be a dropping out of
German names.




CHAPTER XII

ENGLISH WAR FINANCE

Protecting Trade and the Trader--How German Banks Paid--The English
Loan--England's Wealth--The Income Tax--More Taxes.


A giant Atlas bearing the civilized world on its financial shoulders
has arisen between the North and the Irish seas. That is the picture
that stands at the opening of 1915, where before Germany had endeavored
to stamp the label "Perfidious and degraded nation of shopkeepers."

Only the pencil of a Dore could sketch this giant and put him in
figures of proper relief as, aroused from his pastime of trade and the
acquisition of shillings, he summons with one hand the resources of the
empire and with the other passes them out to needy warring nations,
taking care all the while that the necessary dealing of exchange and
commerce have the least possible disturbance.

Kitchener says the war may last for two years, but he is making
preparations for three years, and must do this job so thoroughly that
no repetition will be required.

If it is war for three years, then this mighty financial Atlas of
England is preparing to write its name on promises to pay more gold
than all the money-gold on the surface of the earth today. And England
won't hesitate to do it if necessary--not for one moment.

How can she advance money to Russia, Belgium, France, and other
countries at war or just going into the war, and ask no foreign
assistance, no overseas help,--except to be let alone,--expand her home
trade and wages, pay with a lavish hand, and still pile up real gold
both at home and over the ocean?

The first answer is because she does expand trade; because she does pay
and pay promptly; and because she does protect her own trade.

The United States does not protect its trade or its citizens anywhere
in the world to-day. It shivers in war-time, and borrows of everybody
else when it has a panic of its own.

There is only one way to make trade, and that is to pay and protect.
England, through centuries of fighting to protect both trade and the
trader, has learned the way to the highest freedom in both trade and
finance.

Therefore, before this most Audacious War was set afoot England had a
very small stock of coin gold but a very large stock of gold
credit-bills.

For years England has held in her cash box from $1,800,000,000 to
$2,500,000,000 of the commercial credits of the world. With goods and
trade-honor behind these promises to pay gold, she had no need of the
metal but only of command of the seas, that her gold might come in when
needed. When the war broke out, $600,000,000 of these gold promises to
pay were of German and Austrian origin. The big London bankers who had
their names on the back of such acceptances could not in honor
underwrite any more commercial bills. They knew their capital was
involved in collection of those already out.

But Britain said the commerce of England must go on as well as the war.
The people who held these acceptances were promptly invited to turn
them into the Bank of England, which held the guaranty of Great Britain
behind it, and receive the money therefor; the discount rate after
maturity to have 2 per cent added thereto, 1 per cent to go to the Bank
for expenses and 1 per cent to the government for reserve fund to cover
any losses. Of such bills $600,000,000 were promptly discounted.

I hear that two banks, the London City & Midland with its $525,000,000
of deposits, and Lloyds' Bank, both refused to rediscount. They
believed the investments in commercial paper they had made were
perfectly good, and that they were as well able as the Bank to wait for
payment until one year after the war if necessary.

But to date more than half of these rediscounted bills have been paid.

It may be of financial interest to narrate how payments could be
accomplished when by the King's orders there could not be any "dealings
with the enemy" and payment to either side was forbidden by both. Yet
the Dresdner Bank and other big German and Austrian banks have to date
met fully one half their London obligations.

They were enabled to do this because their London branches were
independent institutions whose independence was recognized by the
British government. The London branches were thus liquidated,
collecting in and meeting their obligations at maturity, so far as
possible.

Liquidation in acceptances is one of the keys to the success of the
English loan. While England had the ability before the war to discount
$2,500,000,000 of acceptances, and with the present expanded base of
the Bank would, without war, have the ability to discount
$3,000,000,000, or three times our national debt, there is now no large
business offering. The discount credits can therefore be measurably
turned to the war-loan account. One of the biggest acceptance houses
in London told me that the post-moratorium bills, or the new
acceptances made after the moratorium, could not amount to more than
80,000,000 pounds, or $400,000,000.

With the liquidation on account of pre-moratorium bills and the absence
of new business I should estimate that the London money market was able
to take care of the 350,000,000 pounds loan put forth in November by
the government without much regard to the investing community.

With expanding trade and confidence, English investment interests can
absorb the major part of this huge loan before next summer, when
another loan of about equal size must be put forth, according to
present calculations. This second loan will probably be for three or
four hundred millions pounds sterling, bear 4 per cent, and issue at
par. The November loan was issued at 95 per cent and it was announced
in Parliament that the Bank of England would loan the issue price at
one per cent under the Bank rate.

That the loan was fully subscribed is not contradicted by the small
fraction of discount soon quoted on the full-paid loan. One could
fully pay the loan, taking the discounts on undue maturities and sell
at a fraction under 95 and still make a profit.

I believe the estimate of an annual English surplus for investment of
$2,000,000,000 per annum is far too low. This figure is upon the basis
that only about 20 per cent of the river of interest, dividends, and
profits flowing annually to British pocket-books is available for
reinvestment.

In the present war stress and with economy practised to-day more by the
capitalist classes than the laboring classes, the amount of money for
reinvestment should be far greater than this.

English finance will cut its cloth according to the pattern. If there
is only $2,000,000,000 per annum of surplus earnings to put into the
war, that money will be spent; and if England has 50 or 100 per cent
more, that money likewise will be spent, but spent so judiciously that
the largest possible sum from it is kept in channels of English trade.
The British Empire will work and finance the fight thus within a
circle, and right on its own base.

The surprising thing is that it can be called upon to extend financial
help to its allies. But everybody except Germany was caught absolutely
unprepared. The war was early on French soil, tying up the resources
of some of the richest provinces of France. Russia had so little
thought of war that, as I have previously explained, she had deposited
from her great gold reserve so that it had been loaned out on time and
therefore was not available for the start of the war. Hence we have
the spectacle of Russia gathering up 8,000,000 pounds sterling in gold
and sending it to the Bank of England and, on this basis, borrowing of
the Bank 20,000,000 pounds sterling.

Of course, this is good banking and good business and a good alliance.
The Allies are bunching their war orders and credits, and England is
entitled to hold the bag since she is carrying the financial burden.

England's war finance is not wholly measured in her expenses or loans
to other countries. In a single issue of a London paper you can count
daily reports of more than a dozen charitable funds connected with the
war-work. These funds range all the way from "Aid to the
Mine-Sweepers," "Gloves for the Soldiers," and the "Servian Relief and
Montenegrin Red Cross Funds" up to the "Prince of Wales's Fund."

This last was over $20,000,000 before Christmas. The suddenness of
this war may be illustrated by this fact: A friend of mine, who is
managing director of a big English concern, has assumed the
responsibility for seven years past of keeping in England one year's
supply of everything that his company was likely to require from the
Continent. This was at a cost to his company of many thousands of
dollars. With dogged determination he stuck to the same policy for
1914, although in January of that year it was clear to him that Germany
could not afford to go to war. While he was happy over his judgment,
he admitted in conversation with me in December, 1914, that in January,
1914, the outlook was less indicative of a general European war than it
had been for many years.

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