South America and the War Part 2

CHAPTER II

THE GERMAN OUTLOOK ON LATIN AMERICA

"South America is the special theatre and object of German commercial industry." This emphatic declaration--reiterated in various forms by other German authorities--is the theme treated by Professor Gast, Director of the German South American Inst.i.tute at Aix-la-Chapelle, in a pamphlet ent.i.tled _Deutschland und Sud-Amerika_, which may be regarded as a semi-official exposition of German objects and opportunities. The pamphlet appeared in the latter part of 1915. The events which have since occurred, however damaging they may be to German hopes, do not affect the views expressed. Since this advice from a German authority to Germans is a frank revelation of German views, it seems worth giving a very brief abstract of the main points, which the writer elaborates at great length, though he does not enter upon details of business method.

"The German Press," says Professor Gast, "has never published so much about Latin America as during this war. This proves the importance of German relations there and the need of clear ideas concerning them. An economic compet.i.tion, intense beyond all example, has sprung up concerning Latin America. The chief feature is the 'Financial Offensive'

of the United States. The present grouping of compet.i.tors is accidental and false. The natural conflict is between the United States on the one side, and on the other side all industrial and exporting peoples, including j.a.pan. The United States, the most dangerous compet.i.tor, is handicapped by the higher cost of production in North America and by the want of that facility of adaptation to customers' needs in which Germany excels. Yet the war has revealed the weakness of German reputation.

Everywhere the prevailing strain is antipathy to Germany. It is the duty of Germans to put aside resentment and to strengthen their economic position. For trade with the two Americas is the chief source of prosperity for modern German commerce, particularly that of Hamburg. And after the war this trans-Oceanic trade will be a matter of yet more urgent national importance."

This general survey is followed by an examination of special opportunities open to Germans. "Germany has not the many-sided relations with Latin America possessed by the Latin peoples of Europe, nor the politico-geographical advantages of the United States, nor the strong capitalist position of Great Britain. She must make the most of what she does possess. Her main a.s.set is the German in South America. Every German abroad means the investment of interest-bearing capital for German cultural expansion. Two things are required of him, to win esteem by good work and to place his personal influence at the disposal of German national ends. The compact German communities in Brazil and in Southern Chile should be supported and organised from home, but not obtrusively, lest local feeling be aroused. They may perhaps serve Germany best by a partial mingling with the native population, so as to spread German culture and the taste for German goods. But, everywhere, all individual Germans are Germanising agents. The German merchant particularly is the missionary of cultural and political influence. So also the German soldier, particularly the German officers employed as instructors in Chile and Argentina. Most South American officers feel a professional sympathy for Germany. Hence spring useful personal friendships: to foster and enlarge these is an urgent duty. Germans exercise other professions which facilitate the patriotic diffusion of German culture. Such are physicians, who find peculiar opportunities in their intimate relations with families in their homes; the clergy, both Protestant and Roman Catholic; teachers, whose proved idealism is an admirable equipment for the spread of German culture; scientific men, journalists, surveyors, geologists, professors in training colleges. If possible they should work in combination, as they do in the German Scientific Club of Buenos Aires. Every one of them must use every professional opportunity and every item of personal influence and private friendship for the advantage of Germany.

"A knowledge of German culture must be spread by a systematic educational movement. But this must be done tactfully. The German's propensity to foreign studies will aid him. He must equip himself by a.s.similating Latin culture, must use his knowledge of French culture, must oppose French influence by encouraging Spanish culture. His object is to catch souls; and, next to financial strength, the first necessity is tact."

Two points stand out in this very candid statement. First, every German abroad is an item in the national balance-sheet; he must earn interest.

The intimacy between the pastor and his flock, the physician's intercourse with his patient, are set down on the credit side of the national profit-and-loss account. Secondly, the most profitable method is a liberal education. There is something whimsical in the combination of inhuman material calculation with humanising influences, and one may smile at the heavy solemnity of the suggestion that the German will find it pay to acquire tact and to Latinise himself for outside intercourse.

But the suggestion should not be dismissed as absurd. Whatever can be done by effort, study, and will-power the German will do. He is training himself to be a more formidable compet.i.tor than ever in the economic arena.

Indeed, the pamphlet is valuable, not only as a hint for the future, but also as an avowal of methods which are already at work. One of these is a deliberate system of politic and profitable marriages. German clerks receive promotion only on condition that they marry native girls and establish homes in the country. This policy has been so steadily pursued that everywhere German business men have entered Latin-American families and exercise a Teutonising influence. Through marriage also, accompanied by skilled and profitable management, Germans acquire control of property and of trading concerns. Again, owing to their reputation for expert efficiency and scientific competence, Germans fill many posts of influence and trust in universities, scientific inst.i.tutions and government departments. Argentina is an example. In the National University Germans control the engineering and chemical sections, where their pupils are trained to use German apparatus and methods. German curators in the Geological Museum receive early information as to any discoveries of minerals or oil. Germans employed as experts in the public service learn details of any public works proposed by the government or the munic.i.p.alities. Reports on such schemes pa.s.s through their hands and, since estimates are not carefully checked, they are thus able to favour German trade at the expense of the Argentine tax-payer.

In every city the German _Verein_ unites the German community, so that Germans may avoid compet.i.tion and may co-operate with one another and with Germans in the Fatherland. The bank and the merchant work in close combination and have at their disposal all the information gathered by German employees in other banks and in business firms. The German has been quick to antic.i.p.ate others in occupying new ground: for example, in the remote but vast and productive region of Eastern Bolivia, watered by the three great navigable affluents of the Madeira, a region which is just beginning to awake to the promise of a great future, the German trader hitherto has scarcely had a compet.i.tor. Again, the German has won predominance in the electrical and chemical industries by applying his practical scientific apt.i.tude to the supply of new wants. Lastly, the German is distinguished by close attention to detail and adaptation to local needs.

Yet Germans note and deplore "a constant strain of antipathy to Germany, a wave of anti-German hate." The remedies suggested are: first, a more efficient German service of news, and secondly, "a systematic cultural activity, conducted with push and comprehensive inspiration."

What is being done in Germany to realise these methods? First may be mentioned the various a.s.sociations for extending German influence abroad and binding to the Fatherland all Germans living abroad, whether in South America or elsewhere. Such are the Pan-German League, the German Navy League, the League for Germanism abroad, the League for German Art abroad, the School League which gives support to German schools outside Germany, the German rifle club, with its headquarters in Nuremberg, to which rifle clubs abroad are affiliated, and, lastly, the Foreign Museum, recently founded under the highest official patronage, which arranges economic exhibitions in various German cities. Although these a.s.sociations were not founded particularly for Latin-American objects, their present efforts are particularly bent in that direction, as the Pan-German League lately declared. But, besides these comprehensive agencies, Germany possesses three inst.i.tutions specially devoted to Latin-American purposes. One of these existed before the war, namely the German South American Inst.i.tute at Aix-la-Chapelle, to which the Imperial and Prussian authorities have entrusted "the cultivation of scientific and artistic relations with South and Central America on the lines of a general cultural policy." Its objects are to draw together German and South American students, to maintain a South American library and information bureau, to encourage in Germany the study of South American matters by prize essays, travelling scholarships and similar methods, and to use every means of making German intellectual work known to South Americans. The Inst.i.tute publishes a Spanish monthly ill.u.s.trated periodical, _El Mensajero de Ultramar_, and also a Portuguese version, _O Transatlantico_. These papers are well calculated to uphold German culture across the Atlantic: they are admirably got up and aim at presenting an attractive picture of German life and inst.i.tutions, dwelling particularly on the steady continuance of German industry, artistic production and even sport during the war. The Inst.i.tute also publishes a German periodical, strictly business-like and containing only technical ill.u.s.trations, for the purpose of keeping Germans informed on Latin-American affairs.

The Inst.i.tute at Aix, although its ultimate object is mainly economic, leaves business methods and matters of immediate economic concern to other agencies. Before the war there flourished already in Germany a League for Argentina and one for Brazil. In 1915 these two a.s.sociations combined in order to form a German Economic League for South and Central America. A prospectus was issued and a meeting was held in Berlin under the presidency of Herr Dernburg, who spoke of the coming economic struggle and pointed out that German trade, except in the electrical industry, was not supported by large capital investments such as their rivals possessed. The dependence of South America on other industrial nations, owing to want of coal and iron, would facilitate German investment, to supply this defect. Germans had failed to make friends through not understanding the psychology of South Americans. German strength and practical energy must avoid arrogant pedagogic ways and must make their way through a tactful and sympathetic propaganda.

At this meeting the league was inaugurated with 120 members. Very soon it numbered 1000. Among the a.s.sociations which figure as members are the German Industrialist League, the German Mercantile League, the Berlin Chamber of Commerce, the South German Export League, the League for Germanism abroad, the Society for German Art abroad. The three great banks, known in Germany as the three D.'s, are members, so also the great Shipping Companies; also newspaper and publishing firms; also many of the great industrial syndicates. A notable feature in the work of the league is the maintenance of a club in Berlin where business men and other travellers from South America are welcomed. A great point is made of this work of personal cultivation. The object is to make by hospitable attentions a Germanophil convert of every Latin-American visitor to Berlin and send him back across the Atlantic a missionary for German culture and German business. But the princ.i.p.al aim of the league is to unite all Germans who have any business interests in any part of Latin America, so as to pool together their knowledge, their resources, and their efforts. In this economic war the Germans move, as it were, in ma.s.s formation. Branches of the league were speedily established in every one of the twenty-one American republics, and these branches co-operate actively with the parent society at home in the furtherance of German influence and economic advantage.

A third inst.i.tution, the Hamburg Ibero-American League, has been formed in the metropolis of German Latin-American trade. Already before the war, besides the usual trading organisations of a great port, Hamburg possessed a Technical High School which is practically a university of trade and industry; a Seminary for Romance languages and culture, which maintains a South American library; and a singularly complete bureau of information concerning all over-sea countries, which is known as the Hamburg Colonial Inst.i.tute.

But Hamburg still felt a want, which was supplied by the formation of the Hamburg Ibero-American League. Its objects are: (1) in Spain and Spanish America: to spread a knowledge of Germany's resources and to cultivate friendly relations in government departments, semi-official inst.i.tutions and social, literary and scientific circles. To circulate the ill.u.s.trated weekly _El Heraldo de Hamburgo_, also pamphlets in Spanish and Portuguese; to station confidential emissaries in appropriate posts; to encourage interchange of visits and to inculcate the advantages which Germany offers as a training-ground for every calling. (2) In Hamburg: to prepare for intercourse after the war by arranging lectures and by organising language courses in German, Spanish and Portuguese, and particularly to establish a _Centro Ibero-Americano_ with club, reading room, and information bureau, a house fully equipped for the hospitable reception of travellers from the Peninsula and from South America. The league is to consist of twenty-two sections, one for Spain, one for Portugal, one for each of the twenty Latin-American republics, in order that all who have interests in any part of the Ibero-American world may support one another.

A fourth a.s.sociation, the Germanic League for South America, has been formed more recently for the purpose of uniting together persons of German speech and origin in Latin America and preserving their Germanic character, particularly by means of German schools. This inst.i.tution has a special significance just at the time when the Brazilian Government has determined that all its citizens shall be Brazilians and nothing else.

The three leagues which have their headquarters in Berlin, Hamburg and Aix-la-Chapelle have been in active movement for some time, and there is evidence from South America that they do their work in a thorough and effective fashion and have won considerable success, particularly through cultivating the friendship of South American visitors to Germany.

But in estimating German designs, we must look beyond these German leagues, which are merely an incidental part of German economic organisation. That subject far transcends the present topic, but embraces it so closely that the main outlines may be indicated. Most of the German industries are consolidated into cartels or syndicates in such a way as to eliminate compet.i.tion, regulate prices and output, distribute risks or losses, facilitate the export of surplus products, and apportion business between the members of the cartel. The whole body of industrialists is united in league; merchants or exporters are similarly united; a small group of great banks, practically const.i.tuting one power, manages the financial side of the national industry and commerce with a singular mixture of daring and judgment, guided by a wonderfully complete enquiry system, a veritable international secret service; the great shipping companies, which coalesce more and more into a single huge national concern, work in close co-operation with organised industry and organised trade; railway transport is managed by the state so as to dovetail into the same machine: and the whole forms altogether a carefully constructed system of co-operation, cohesion and united action. That organisation has not fallen into abeyance during the present war. On the contrary, month by month it is being perfected, rounded off. Lastly, Germany has appointed, as it were, an economic headquarters staff, a small group of expert business men who for two years past have been devoting themselves to the working out of means for transferring Germany from a war basis to a peace basis with the least possible disturbance and delay. This higher command has its hand upon the levers of the whole machine, which, upon the conclusion of peace, is at once to resume with redoubled energy its interrupted task, industrial and commercial recovery, and particularly the economic conquest of Latin America.

In order that we may know what Germany is doing, these German organisations have been noted here. It would be impertinent, in both senses of the word, to compare or to criticise British methods. The problem of British reorganisation is being studied by experts and worked out by those in authority, and it is constantly expounded in official publications. But, without attempting to give individual opinions, one may quote some of authority.

"Great nations do not imitate." We may learn much in detail from the Germans; but Englishmen could not adopt the German system unless by first turning themselves into Prussians. Our people would never submit to Prussian methods of state control. Moreover all British experience shows that in this country such control would be disastrous. Yet competent authorities agree that immediate organisation is a necessity.

It cannot be beyond the wit of Englishmen to devise means whereby British individual enterprise, common sense and self-reliance may work through methods of systematic organisation, combination, united action.

From the friends of Britain everywhere comes the same warning. It is most appropriate to conclude with one uttered by a South American of unimpeachable authority, Don Pedro Cosio, former Uruguayan Finance Minister, who recently represented the Republic of Uruguay in this country. In a report to his government on the organisation of labour in the United Kingdom he writes, "The nation which is the first to organise its industry for the commercial campaign will be the one which will occupy the forefront in foreign markets."

CHAPTER III

THE ECONOMIC WAR AND ITS PROPAGANDA

"Economic War":--This reiterated German phrase is not mere metaphor. The Germans pursued in peace the operations of war. To them commerce meant not merely the pursuit of trade in peaceful rivalry with others, but a sustained effort to defeat and oust rivals and reduce to economic subjugation the lands penetrated. By plunging into open war, which was meant to continue and to confirm that process, the Germans have risked their previous gains. Their own weapons are turned against them. The economic character of the actual war and the efficacy of the economic weapon in the hands of the Allies become more and more evident. In the early months of the war this weapon was not wielded with thorough decision, and Germans beyond the Atlantic were able to carry on considerable European trade. But today the German merchant is striving to defend, against an overwhelming weight of maritime pressure, the ground which he had won through a generation of laborious and patient effort.

This economic struggle covers all the sh.o.r.es of all the Oceans. Its Latin-American phase has a special interest owing to the remarkable position attained in those lands by the Germans, the high value which they attach to that position, and their special efforts to maintain it under present difficulties. The most varied ingenuity is called into play to circ.u.mvent the barrier which now cuts off those countries from Germany. Present risks and losses are viewed as part of the inevitable waste of war, as an outlay deliberately incurred in the all-important task of holding open the gate through which, upon the conclusion of peace, the fruits of German industry are at once to pour in an irresistible stream, in exchange for those raw materials which are urgently needed to feed the industrial life of Germany after the war.

This is the constant preoccupation of German business circles--the need of raw materials. And this is the reason why Latin America, the great source of raw materials, is courted with eager hope and anxious apprehension.

It is noticeable that a very large part of the cargoes condemned by the British Prize Court, as actually intended for the enemy though consigned to other pretended destinations, consists of goods from Latin America.

For example, in August 1917 the Court condemned quant.i.ties of coffee, seized on a score of neutral steamers and ostensibly consigned to Scandinavian and Dutch merchants, but in fact shipped by a German firm at Santos for the parent house in Hamburg. Two months later, it was stated in court that nearly 400,000 worth of wool, shipped from Buenos Aires to the Swedish Army Administration at Gothenburg, had been seized by the British as being in fact destined for Leipzig. At the same time the Court condemned a number of manufactured rubber articles which had been found concealed in a pa.s.senger's clothing. On a later occasion, coffee and cocoa valued at nearly 200,000 were condemned, being part cargo of a Swedish ship bound from California to Gothenburg. They were consigned by a new and insignificant firm in San Francisco to various persons in Scandinavia, but were in fact on their way from Guatemala to Hamburg through Sweden.

The elaborate webs spun by German traders and revealed by intercepted correspondence were exposed in the Prize Court. Their methods were to find persons in neutral countries as nominal consignees, to act as intermediaries for getting the goods to Germany; to set up bogus companies for the same purpose; to use false names, or names of persons having no genuine interest in the consignment, and to manufacture false doc.u.ments in order to give the appearance of neutral business. This was done to evade capture by deceiving the belligerent searchers. In some instances these methods succeeded. Quant.i.ties of coffee, consigned to Scandinavia, managed to elude the allied warships and reach Hamburg.

These are cases of import into Germany. The reverse process, export from Germany through neutrals, follows similar lines. German goods, falsely labelled and described as Swiss or Dutch or Scandinavian manufactures, have found their way across the Atlantic in neutral ships.

The Post Office has also served as a channel of secret trade. Pictures in the Press have exhibited the odd ingenuity of these devices: how coffee from Brazil to Germany was found concealed in rolls of newspapers, and how thin slabs of rubber were sent by post as photographs, also how quant.i.ties of jewellery have been despatched from Germany for South America in letters and in bundles of samples or journals. Goods so sent from Germany through the Post Office are mostly such as combine small bulk with high value--especially drugs and jewellery.

These partial examples, although each instance may seem small enough, indicate collectively a good deal of enemy trade which has found devious routes under stress of war. These manuvres may seem at first sight merely trivial curiosities or at all events to have no more than ephemeral importance, since they were improvised to overcome temporary obstacles. But, apart from their intrinsic interest as episodes in one phase of the war and as evidence of the efficacy of Sea Power, these devices merit practical attention in view of proposals to fasten economic fetters upon Germany by the terms of peace, and in view of the odium which may tell against German commerce for years to come. German business men are preparing to meet these difficulties by continuing the method of exporting through neutral agents, and are proposing in some cases to transport to a neutral country the work of completing manufacture, in order that goods so produced may appear to be indisputably of non-German origin; and the Foreign Trade Department at Berlin has advised German merchants to employ, for some years after the war, travellers and agents who can pa.s.s as French or English. It would be unwise to underrate any instance of German inventive persistency.

Before the United States came into the war, that country was the channel of much German trade with Latin America. That road is now closed. The United States Government has gone further. It refuses coal in North American ports to ships proceeding from South America to neutral countries in Europe, unless the innocence of the cargo can be conclusively proved. This regulation shows that the United States authorities have knowledge that the ultimate destination of much South American cargo, particularly from the Argentine Republic, has been Germany. The blockade becomes more stringent through the co-operation of the United States and of Brazil, and through the action of the statutory list of "persons and firms with whom persons and firms in the United Kingdom are prohibited from trading." British commerce is a big and living thing, and the prohibition hits very hard any firm placed on this Black List. One finds here not only Teutonic names, but also innocent-sounding Latin names: for if a Latin-American is found to be acting as agent or cloak for a German trader, he finds himself pilloried on the Black List beside the German. There are obvious ways of evasion.

The name of a clerk or door-keeper or a lady type-writer may appear as consignee. A varied ingenuity has to be met by constant watchfulness, and the list is regularly altered and kept up to date. The Black List has been much criticised for omissions, which are sometimes due to motives of expediency. But the bitter complaints about its injustice are unsolicited testimony to its efficacy. A striking example of its working was manifested in September 1917. After the outbreak of war, such of the Chilian nitrate works as were owned by Germans were unable to sell their nitrate or even to obtain jute bags, the supply of which is in British control. The unsold stocks went on acc.u.mulating, until one by one the German nitrate works were compelled to close down. Long negotiations between Santiago and Berlin found at last a remedy for this waste. It was agreed that the large deposits of Chilian gold in Germany should be set against the German-owned nitrate in Chile. The Chilian Government bought the nitrate, and paid the German owners by drafts on Berlin, which were met out of the Chilian money deposits in Germany. Thus Germany received Chilian gold in exchange for the inaccessible nitrate, while the Chilian Government received nitrate in exchange for its inaccessible gold. Chile then sold the nitrate for American gold to the largest manufacturer of explosives in the United States. Thus, one result of the blockade and the statutory list is that this German nitrate goes to make munitions, to be hurled at the Germans on the French front from American guns. The German Government, by sanctioning this sale of explosive material to its enemies, gave evidence of its earnest desire to stand well with Chile. On the other hand, Germany was impelled to this agreement in order to obviate grave financial loss to Germans and especially to save a big Hamburg firm from disaster.

The active entry of Brazil into the war has in great part superseded the action of the statutory list in that country: for Brazil has taken decisive measures towards Germans within her borders. All enemy enterprises are in the hands of government receivers. All contracts for purchase of coffee or other Brazilian products by Germans are null and void; and in cases where payments had been made by the German purchasers, all such payments must be handed over to the official receivers. The United States also publishes a Black List of firms with whom her citizens are forbidden to deal. Evasion of allied watchfulness becomes more and more difficult: yet ingenious, and sometimes successful efforts are made to find loopholes in the wall of the blockade.

There are now in Buenos Aires nearly 150 Turkish firms--Levantines of every denomination, Mohammedan, Christian, Jewish. Some of these are long-established and well-reputed houses. But most of them have sprung up during the war. Some of them, starting with exiguous capital, have made large fortunes in a year or two of trade. This has been done by supplying to German black-listed firms goods imported direct from Manchester and Bradford. Through the close co-operation of the German bank with German trade, these Syrians and Armenians are enabled, by the Germans standing behind them, to pay cash against doc.u.ments in place of the usual sixty to ninety days' credit, and thus have a great advantage over the British or allied trader. The British authorities now permit export only to certain registered Turkish firms. The restriction does something to limit the abuse of this kind of trading.

Besides these ingenious efforts to keep open communication with Europe, there is another side of the commercial war. In the neutral states of Latin America the German business man is as ubiquitous and energetic as ever, nay more so as he has greater difficulties to contend with. So far as he can, he sells from acc.u.mulated stocks of German goods, for the German importing houses before the war had gathered great stocks, especially in Chile. Where this resource fails, he repairs his stock by buying anywhere. Up to April 1917 he bought largely in New York. Now he buys where he can and what he can--American goods, French goods, British goods--anything to hold the market until the ocean shall be free once more to German keels carrying German goods.

From the Argentine Republic 6000 young Englishmen came home to serve Britain on the fields of France. The young German would have found difficulty in getting home, even had he wished to do so; so for the most part he stayed in the River Plate. Other Germans have been released from military service and sent out as commercial travellers; for the German Government regards this too as National War Service. Thus today there are three German commercial men in the River Plate to one Englishman.

The resources and confidence of the German traders are surprising. They have bought great quant.i.ties of wool in the River Plate--not so much indeed as is generally supposed; for German emissaries, in order to force up the price of wool to the Allies, have methodically made specious but fict.i.tious offers of high prices to sheep-farmers all over the Argentine Republic. Yet, even so, German traders hold large quant.i.ties both of wool and of grain. These have been purchased partly for selling at enhanced prices on the spot, but princ.i.p.ally with a view to after-war trade and the supply of raw materials to Germany. These purchases are proof of firm belief in the future. Moreover, both in Chile and in Argentina the interned German ships await their after-war cargoes for Europe. And when the Chilian or Argentine asks whether the German will be free to use these ships when peace comes, the Englishman cannot reply. The ships are there, proof of Germany's future power to trade.

And the Germans are active not only in trade. They have learnt from British example that the road to business in Latin America is the investment of capital. And, strange as it may seem, the German has peculiar opportunities of investment at the present time. Such limited trade as can be carried on yields great profits. There is difficulty about remitting funds to Germany; and in any case "victory war loans"

and other investments in the Fatherland may seem less attractive than investments in those Latin-American lands which look forward to rapidly expanding prosperity after the war. Accordingly, the German merchant is not only buying raw materials; he is also taking a share in the movement of home manufactures which now offers peculiar opportunities to foreign enterprise. Moreover, German firms in Buenos Aires have invested largely in short loans to the Argentine Government. Besides these private investments, which, like all German activities, have their official side, loans have been repeatedly pressed on the Argentine Government, ostensibly by neutral financiers (first in the United States and afterwards in Spain) but in fact by Germany, evidently for immediate political as well as for ulterior economic objects. These offers have been declined. A German loan openly offered to Uruguay has also been refused.

Obviously, the whole story of German war-efforts in Latin America cannot yet be told. Enough has been said to indicate the character and the intensity of those efforts. For this far western front Germany has mobilised a business army, specially trained for the nature of the country and for the kind of operations wherein it is to be engaged.

These efforts and aspirations are best ill.u.s.trated by a recent utterance from the Hamburg branch of the League for Germanism abroad:--"We should like to insist that South America, the main field of our activity for many years past, const.i.tutes a great sphere. Wide areas, with great possibilities of development, but little cultivated hitherto, are waiting to be opened up. It must be our business to employ here all our strength in order to retain and to make useful to ourselves these countries with their markets and raw materials. What we have to do is to _arm for the Peace_ and to collect money, in order to be able immediately to act with energy--with our whole strength and with adequate resources."

In this "arming for the Peace" there is one weapon which demands special mention, namely the influencing of opinion by printed propaganda.

The German mobilisation of the Press is a vast business controlled by the State. Upon the outbreak of war this organisation undertook the special work of war propaganda through two newly formed departments: (1) Press Office for influencing neutrals, (2) News Service for Spanish- and Portuguese-speaking countries. This inst.i.tution of a special Ibero-American service proves the prominence given to the work in the Spanish- and Portuguese-speaking lands. The last words obviously include the Peninsula as well as Latin America. Nor can the propaganda carried on in Spain be dissociated from that in Spanish America. "Spain is the way to South America," writes a Spaniard discussing this very point. The popular ill.u.s.trated Spanish prints _A.B.C._ and _Blanco y Negro_, which carry on a vehement Germanophil propaganda, are carefully perused, as coming from "home," by Spanish emigrants throughout Latin America, who thus become, half unwittingly, disseminators of German views and of belief in German victory.

For the first object of this propaganda is to represent Germany as invincible in war. This military propaganda is an essential part of economic efforts. The Germans hold up a picture of German sagacity, system, thoroughness, efficiency. They desire to impress as well as to persuade. They know the effect produced by their victory in 1870. Credit and confidence are the greatest of commercial a.s.sets; and in this case economic credit is to rest upon belief in military strength.

In South America, as in Spain, the method is to capture the press, and so disseminate German war-news, pro-German articles, photographs and cartoons. But it was not enough to control or inspire existing newspapers. In many capitals the Germans started new journals, printed in the vernacular. Naturally, the chief effort was made in Buenos Aires.