Art. 6.-GERMAN BUSINESS METHODS IN FRANCE BEFORE THE WAR. 1. L'Expansion de l'Allemagne. By Capt. H. Andrillon. Paris Rivière, 1915. 2. L'Allemagne en France. By L. Bruneau. Paris: PlonNourrit, 1915. 3. Les Méthodes allemandes d'expansion économique. By Prof. H. Hauser. Paris: Colin, 1915. DURING the last twenty-five years, the nature of German emigration has undergone a radical change. The poorer classes of Germany, which, about the middle of the 19th century, poured in large numbers into the United States and other American countries, have almost ceased to leave their native land. The richer Germany grew, and the more work there was at home, the less temptation to go abroad. On the other hand, Germany was seeking in all parts of the world markets for her manufactured goods, and endeavouring to obtain fresh supplies of the raw materials needed by her factories. In order to attain these ends, she began to send abroad, not destitute workmen, but an army of clerks, commercial travellers, engineers, contractors, who settled temporarily or permanently in the countries from which they hoped to draw the resources needed at home or which they intended to flood with goods manufactured in Germany. If necessary, Germany exported also the capital needed to start the works which she intended to set up in foreign parts, or to purchase those suited for her purpose, because in doing so she prepared customers for German industry. But, as a rule, this export of capital was reduced to a minimum; in many cases the financiers, after having prepared the ground for the manufacturers, and settled in the most important positions the greatest possible number of foremen, experts, managers, directors, took the first opportunity of selling the shares which they had subscribed, so as to keep for themselves and their fellow-countrymen a controlling power and a part of the profits of the business, without running any risk. For instance, Germans themselves confess that, some years ago, they had sold the shares subscribed by them in the railroads, banks, and industrial companies of Italy, while taking care to retain a permanent influence in these undertakings. Such are the main lines of German antebellum operations throughout the world during the last generation. We will study them in France by surveying the different fields of industry, commerce, and finance. Mines. One great problem for Germany has been to secure a sufficient quantity of iron ore. Her iron lodes are small, and by no means in proportion with her collieries. Her annual output of iron ore is about 28 million tons, and in 1911 she imported 11 million tons. Her coal output, on the other hand, is rapidly increasing, and nearly equals that of the United Kingdom. It will soon be second to none except that of the United States; the figure for 1913 was 275 million tons. In France the reverse is the case. The coal output has notably increased since 1870, especially through the opening of the Pas-de-Calais fields; but still it does not exceed about 40 million tons, whereas the consumption reaches about 60 millions. On the other hand, the iron deposits of French Lorraine, in the department of Meurthe-andMoselle, have proved to be very important; they are estimated at 3 milliards of tons. During recent years, great lodes of iron ore have been discovered in Normandy, a country which hitherto was exclusively agricultural, but now seems able to provide, within a few years, a large quantity of the metal which is the paramount basis of modern industry. This statement explains Germany's purpose; she has always been anxious to get the greatest quantity of iron possible. In order to get it, she has had recourse to two methods; she has bought leases, and she has sold, to the owners of the ore deposits, coal or coke in exchange for their ore. In 1912 she exported to France 6 million tons of fuel and imported from France 3 million tons of ore. German manufacturers have concluded with French companies agreements, the purport of which is clear, though the actual texts have not been published. Organs have been created, through which they have tried to get, by indirect ways, what they could not reach off-hand. In Lorraine, for instance, contracts have been made, which bind the parties to furnish, the one coal, the other iron; such a treaty exists between the Société Française des mines de Valleroy and the German Karl Alexander colliery. But this kind of covenant, in which the reciprocal rights are well balanced, is comparatively rare. In many cases the Germans secured benefits for themselves without giving due compensation; such as that of the Phoenix,' Hasper und Hösch Companies, which produce yearly nearly two million tons of pig iron, and have been successful in securing the ownership of the Jarny and Sancy concessions. The mines of Murville belong nearly entirely to the Aumetz-Friede Company, which owns eight blast furnaces in German Lorraine. The mine of Moutiers is worked by a syndicate of four companies-one French, two Belgian, and one German. In several cases German and Luxemburg firms are participating; these latter very often disguise purely German influence, Four groups have been acting in this line: (1) Röckling, (2) Phoenix, Hasper-Hösch, Aumetz-Friede, (3) Gelsenkirchen, (4) Auguste Thyssen. The Röckling Company works, jointly with the Aciéries de Longwy, the mines of Valleroy and owns also the mine of Pulventeux. The second group, besides their Lorraine interests, have been acting in Normandy, where contracts entered into with a French group bind the latter to sell iron ore, a minimum dividend on its shares having been guaranteed by the buyers. The directors of the mines of Saint-André, of Maltot and of Bully, are, for the most part, representatives of German interests. Gelsenkirchen is one of the most powerful German undertakings. Its yearly output is 10 million tons of coal; it works seven blast furnaces, one foundry, one wire-mill, mills in the Rhine province, and two factories at Esch-sur-Alzette in the Grand Duchy of Luxemburg; one of these turns out yearly 500,000 tons of steel, or three times as much as the French Creusot. This company has acquired a controlling interest in several French coal leases. At the beginning it often had only a small part, but it lost no opportunity of increasing this; it succeeded, for instance, at Saint-Pierremont, Sexey, Haute Lay, Saint-Jean, Sainte-Barbe, Crusnes and Villerupt. Herr Thyssen is the man whose name has been most often heard in connexion with the German ante-bellum invasion of France. His Deutscher Kaiser colliery produces yearly four million tons of coal; he has also six blast furnaces, one steel works, and mills producing two million tons of iron, steel and wrought iron. Herr Thyssen is also the principal manufacturer in Germany and abroad; the expenditure on one of his plants, at Hagendange near Metz, amounted to 4,000,000Z. In order to feed his works, he was looking everywhere for ore; he ordered it from Russia, where he had obtained, in the port of Nicolaiew, a temporary lease of ground for the loading of his steamers. In the French Lorraine basin he owns the mines of Batilly, Jouaville, Bouligny, the surface of which is 4850 acres. In Normandy he has bought the mines of Perrières, Soumont, and Diélette, covering 5800 acres, about one-sixth of the whole basin. It must be acknowledged that the first lessees of these iron deposits had been trying to get financial aid, which was denied to them in France and which they were induced to accept from Germany. The mines of Diélette, which are at the northern end of the Department of the Manche, about fifteen miles from Cherbourg, seemed to be unworkable; Herr Thyssen, however, was not afraid of the obstacles which faced him or dismayed by the prospective cost. The technical difficulties have been removed; the lode is estimated to contain 70 million tons. Herr Thyssen was charmed with Normandy, where he found the lime-stone which is so much wanted in Germany. The lime-stone flux, which costs 5 francs per ton in Westphalia, is worth in this French province something like a franc and a half. At Diélette, Herr Thyssen got from the municipal council a lease of the granite cliffs; these he quarries, and sends the produce to the German provinces on the Baltic coast, where this material is badly wanted. This granite is one of the finest of the world. All these enterprises have turned out well for Herr Thyssen, whose wealth is estimated at 20,000,000l. One-seventh part of the French Eastern basin and one-half of the Normandy basin belonged to German manufacturers, who owned besides mining interests in other parts of France and in French colonies. They include, in addition to the lease of mineral veins, surface purchases from private people and also from the municipalities. We may mention, in this connexion, the celebrated iron mines of Ouenza in Algeria, which have been much discussed of late, and have caused passionate debates in Parliament and the newspapers. It seems strange that, in order to work a mine the annual output of which does not seem likely to be worth much more than 600,000l., it was necessary to form a syndicate in which the great industrials of France, England, Belgium and Germany were represented. A Government conscious of its duties would have granted this concession to a responsible French group. It was the more unfortunate that room was made for the Germans in this particular case, because they adduced this precedent in order to claim a share of the leases in Morocco. It has been asserted that French capitalists, in their exchanges with the Germans, have been adequately compensated for what they gave; but the few shares taken by Frenchmen in German undertakings are not to be compared with the control acquired by Germans over our mining resources. We know only one instance, the Friedrich Heinrich colliery, in which French interest could be styled a controlling one. It would have been fair to sell to our competitors part of our iron ore against the coal which we want; but this was no reason for putting several French companies under foreign control. Metallurgy.-Once having got the ore, the Germans have built mills near the mines or have bought mills situated in the neighbourhood. This has been done, for instance, by the Gelsenkirchen Company. Through many clever devices, especially by buying from the Société Générale de Belgique the majority of the shares of a company which purported to be French, the Gelsenkirchen company got control over Aubrives-Villerupt; through this it was able to build in France powerful mills, which can successfully compete with the French ones. By similar proceedings, Herr Thyssen tried to conquer the Calvados. In 1910 the Société des HautsFourneaux de Caen was formed, with the modest capital of 20,000l. In 1912, it was turned into the Société des Hauts-Fourneaux et Aciéries de Caen, with a capital of 1,200,000l. The intention was to build six blast furnaces, each producing 400 tons a day, and flattening mills and steel works with a yearly capacity of 750,000 tons of sheets, rails, plates, etc. The electric railroad between the mines and Caen was to be nearly 20 miles long; 7000 workmen would have been required, which means, Vol. 225.-No. 447. 2 D |