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man direction, should not immediately refuse Allied contracts for fuses, but should appear to accept them and delay their fulfilment, and, to complete the deception, even occasionally deliver small quantities, and finally, at the last moment, refuse to complete the contract. This procedure was attacked at the time by a GermanAmerican journalist, von Skal. On the strength of short notices which Herr von Skal published in the German Press, in ignorance of the real state of the case, public opinion in Germany turned against the parent firm, the Bosch works in Stuttgart. The question then became the subject of my reports, and was submitted to an inquiry by the home authorities and the courts. I still hold to my opinion that the whole affair was unnecessarily exaggerated by German public opinion, and that the detailed investigation into its legality by the home authorities and courts was unnecessary, as the managing director of the American branch and the directors of the German company had acted in perfect good faith in an attempt to advance the interests of the German cause. It was merely a question of the result. If their policy of procrastination had succeeded in delaying the contracts and had kept our enemies for a considerable time from building their own factory for fuses and aeroplane magnetoes, their action would have been justified; in the contrary event it would have been vain, but blameless from a moral and legal point of view. The fact that at the beginning the English relied on the possibility of the production and supply of such fuses from America, and only later gradually came to a decision to build and fit out their own factories, consequently under much more difficult circumstances, offered an opening for this procedure. That difficulties were caused to the enemy in this respect until quite recently is unmistakably shown by the messages that reached America from England.

As a result of the extensive purchases of the Allies, there came about a gradual change in the attitude of the American Government to the question of issuing loans. At the end of March, 1915, we succeeded, acting on instructions from Berlin, in raising a small loan. It involved an unusual amount of trouble. The American financial world was already completely dominated by the Morgan trust. This domination resulted from the fact that the Allied commissions were concentrated in English hands and were placed by England in the hands of J. P. Morgan & Co., who acted as the agents of the English Government. As these commissions finally included every sphere of economic life, all the great American banks and bankers were called upon, and so drawn into the Morgan circle. The result was that no big firm could be induced to undertake a German loan. However, several trust companies of repute, who already had or wished to have business relations with Germany, declared their readiness to become partners in a syndicate if we succeeded in finding a “Syndicate Manager.A certain New York firm which afterwards made a name for itself, but at that time was comparatively unknown, seemed suited for this position. When all the preparations and preliminary agreements had been carried through, the trust companies, under the pressure of the Morgan influence, declared that their names must not be associated with the syndicate. Meanwhile the matter had gone so far that withdrawal would have meant a moral surrender which would have been dangerous for our credit. Consequently, we had to make up our minds to negotiate the loan under the signature of this one firm, which was naturally undesirable for the general interest.

Looking back, I am of the opinion that we should have done better not to consider a loan in the United States, but to remit the necessary funds from Berlin. This had

to be done later to redeem the loan, and at a time when the rate of exchange was much more unfavorable. When the loan was raised we had certainly no idea that it would have to be redeemed during the war, as we had reckoned on a shorter duration of hostilities. On the other hand there is no truth in the statement that this loan in some way cleared the way for further Allied loans. These loans, which were the natural result of the great supplies of material to the Allies, would have come in any case. We did, however, deprive ourselves by this loan of an argument to prove the defective neutrality of the United States.

In 1916 we succeeded in getting hold of some five millions in Treasury notes without formal loan negotiations.

Another economic question which occupied my attention was connected with the export of German dye-stuffs to the United States. In Berlin it was held that German dye-stuffs should be withheld from the United States as a lever for inducing them to protest against the English blockade, and possibly have it raised. The same point of view was adopted with regard to other goods which were necessities for the United States, as, for example, potassic salt, sugar beetroot seed and other commodities. A change of view did not occur until the spring of 1916 at my suggestion. It is my belief that the withholding of these goods proved a serious mistake. The political aim of bringing pressure to bear on England with a view to the raising of the blockade was not realized. The American industry partly got over the difficulty by obtaining dye-stuffs in other ways-importation of German dyes from China, where they had been systematically bought, smuggling of German dyes via neutral countries, importation of Swiss dyes, introduction of natural dyes and dye-substitutes—but more especially by the foundation of a dye industry of their own. In the case of potash, they had simply to do with what little they could get; which was all the easier as the American manure manufacturers and dealers had already in their own interests begun a systematic propaganda to prove that potash was not indispensable, but could be replaced by their own products. It might be observed as a generalization that ultimately no individual product has proved to be really indispensable. The result of holding back our exports was therefore simply-apart from a quite unnecessary straining of political relations, since England succeeded in diverting all the odium on to usa scarcity of important German commodities in the United States and the substitution of their own production.

In negotiating the German loan, the chief difficulty was that grasping speculators got hold of the market, discredited the war loan by underbidding one another and in part by direct dishonorable dealing, and also that owing to the impossibility of producing ready money, interest in the war loan flagged. Early on I suggested the issue of bills ad interim. The scheme, however, failed, because the representative of the Deutsche Bank opposed it, and because the natural opposition of two great institutions, who were making a profitable business out of the sale of war loans and the speculations on the value of the mark, which were closely connected with it, could not be overcome. I am still of the opinion that with well-timed organization the sum raised by the war loan could have been increased by several millions.



IMMEDIATELY after the outbreak of war, our cruisers in foreign waters were cut off from their base of operations, and the German Reservists in North and South America were prevented from returning home owing to the British Command of the Sea. Measures to assist them were therefore taken by the German Nationals and German Americans in the United States, which although not in themselves aimed at the Union, certainly transgressed its laws. Moreover during the year 1915 and succeeding years, several deeds of violence against the enemies of Germany, or preparations for such deeds, were discovered, involving more or less serious offences against the laws of America. Both kinds of activity, comprised under the suggestive term “German Conspiracies” or German Plots against American Neutrality, were skilfully used by our enemies to discredit us, and these agitations did considerable harm to the German cause, besides being a serious obstacle in the way of my policy.

Among the measures for assisting the German fleet may be mentioned, in the first place, the case of the HamburgAmerika Line, which has already been noticed. The New York branch, acting in accordance with the instructions of their head offices in Hamburg, dispatched about a dozen chartered vessels, laden with coal and provisions, to the squadron of German cruisers and auxiliary cruisers then on the high seas. This cargo was declared in

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