community which they could not solve on the spur of the moment. According to the balance sheets for Dec. 31, 1913, the three German banks having branches in London show the following figures for Acceptances and Bills Payable in Circulation': Deutsche, 14,203,9407.; Dresdner, 14,365,776l.; Diskonto, 12,547,050l. Moreover, in the English version of its report for the same year, the Deutsche refers in a footnote to the significant item, 'Contingent liability on guarantees given on account of customers, 7,115,035l.' Hence this bank's acceptances and guarantees exceeded twenty-one millions sterling.

The writer has often been asked whether, in studying the German banks and their methods of seizing and utilising opportunities, he could trace a conscious effort to 'penetrate.' The answer is decidedly in the affirmative. Some of these methods of expansion were perfectly legitimate. If a German bank is established in London and foreign houses transfer their business to it, the London banks, as a natural consequence, lose their commission on this business. Competition causes rates to decline in the discount market, and the mercantile community reaps some of the benefit. But the German banks were in no sense mere competitors for trade bills or co-operators in advancing our foreign trade. A study of the German's character, as revealed in his financial activities, shows the same aptitudes, the same wideawake intelligence and the same steady perseverance, as his activities in other spheres reveal. It also shows the same duplicity and capacity for intrigue.

With Germany's industrial and political development these qualities became more and more apparent in her Grossbankentum. The German banks abroad were in touch with German brokers, business managers, and clerks settled in the country, many of whom were not only naturalised but had concealed their national origin by adopting English, French, Italian or Spanish names. The whole confraternity was organised into an Intelligence Department for German trade, scrutinising every bill, every cheque and every invoice that might haply supply an item of information that could be turned to advantage. Details concerning foreign firms, their customers and financial resources, were placed at the

service of German enterprise by these German banks, which thus often enabled the German trader to tender successfully for large contracts, or to squeeze out a competitor at the right moment. The report of the special commission recently appointed by the Paris Chamber of Commerce, to consider the best means of developing French export trade, has just been presented, over the signature of M. Ribes-Christofle. It contains an interesting paragraph concerning the work and influence of the German branch banks abroad:

'These branches are widely spread in every important foreign country and constitute themselves information bureaux (agences de renseignement). They know the degree of confidence which may safely be reposed in the merchants of the country; they are in a position to aid the German manufacturers and exporters in using this knowledge of customers; and this practice is indispensable if firms wish to grant credit for a long period without running serious risk.'

The report of the case, Barber v. Deutsche Bank (London Branch), heard in the courts in the early part of last year, shows unmistakably how information concerning well-known British firms is conveyed by these banks to the remotest parts of the world.

In addition to the economic aspects of the German banks' activities as 'penetrators,' these institutions have exerted an important political influence at home and abroad. The Reichsbank, though not correctly described as a 'State bank,' is nevertheless one of the most important politico-economic factors in the national life of Germany. The members of the Direktorium (administrative council) are appointed for life by the Emperor on the recommendation of the Bundesrat, and act consistently from motives of State policy. The reports which reach the Commercial Section of the German Foreign Office, not only from consuls but from German bankers everywhere, are of the most detailed description; and the Reichsbank is in intimate communication with this department. It is more than an ordinary banking house. In war time it is, as Herr Riesser remarks, a Kriegsbank in a very special sense. It would astonish the average Englishman, in reading the works of the

great German writers on banking, to notice how frequently financial preparedness for war' is declared to be one of the primary duties of all banks. Herr Georg Obst (II, pp. 385-6) finds one of the most important 'national functions' of the bank in the rapid mobilisation of the nation's finances. It is a fundamental part of German 'bank-policy' to see that Germany is not indebted to any other country beyond the extent of the covering securities, because the best of all bank reserves in case of war are bills payable abroad in gold. Shortly after the outbreak of the present war, Herr Karl Helfferich contrasted the state of feeling here and in Germany, in regard to financial stability, taking the absence of a German moratorium as the text of his remarks. On Sept. 9, 1914, Herr Havenstein, president of the Reichsbank-Direktorium, said that the plans for the financial mobilisation of Germany, thought out and prepared down to the final details by all the institutions concerned, had proved to be of extraordinary efficiency, 'There was no breakdown, no leakage, or none that could have been foreseen in time of peace.'

For the great German banker, world-finance is nothing more or less than a part of Weltpolitik. Herr Riesser (p. 614) rightly emphasises the intimate relationship between the two as viewed by the financial magnates of his own country. 'The great German banks and the banking groups (he says) are specially adapted to render a service to Germany's economic policy and to her Weltpolitik, so long as their leaders remain conscious of this important task.' Hitherto they have proved acutely conscious of the task. It is hardly necessary to remind the student of world-politics of the activities of Dr Georg von Siemens, who was a personal friend of the Kaiser. He was one of the earliest enthusiasts for the 'complete scheme' for covering Asiatic Turkey with railways and ultimately gaining political control of the territory. German bankers worked in the same way to secure railway concessions in northern China, and even used British finance to help their Weltpolitik. Down to the outbreak of the present war, there were four German directors on the board of the Hongkong and Shanghai Bank; and German influence was strong in several other British financial corporations in the Far East. In China

the Deutsch-Asiatische Bank made a great display, and it built some imposing structures at Tsinanfu and other places.

Since the war, the German banks at home and abroad have been shown to be notorious instruments of Deutschtum in some of its most sinister aspects. One is not under the necessity of giving complete credence to all reports and rumours current concerning their activities; but some facts have been established beyond refutation. At the trial of the late M. Bolo the cheques with the endorsement of the Deutsche Bank were produced before the court-martial. Not only did the well-known Mannheim banker, Herr Marx, finance Duval and act as his general adviser in Switzerland, but the evidence showed that Marx was the organiser of German espionage in Switzerland, that the German banks there supplied all references required, and were vigorously assisting the whole 'defeatist' propaganda in France. Ezio M. Gray, in The Bloodless War' (pp. 9-13, 19 and 98), gives some remarkable facts concerning the political significance of the German banks in Italy and other foreign countries. The branches of the Deutsche Orientbank in Fez and Casablanca were working solely as agents provocateurs, as the creators of pretexts for Germany's political intervention. When, in 1911, the Franco-German agreement on the Morocco question was concluded, there was no longer any work of this kind to be done, and the branches closed.

According to Prof. Pantaleoni, the Banca Commerciale Italiana had a strong grip on the Italian Senate, the Knights of the Annunciation, and exMinisters; it financed elections, maintained political representatives in Albania, Constantinople and Brazil, and tried to inoculate the Banca d'Italia with Deutschtum.† Some of the Banca Commerciale's officials figured largely in the investigations concerning the concealed consignments of rifles, revolvers, and projectiles, intended for Germany but held up by the authorities at Venice and Genoa in the early part of 1915. The disturbances in

Ces Messieurs du Bonnet Rouge-Leurs Amis.'-'Figaro,' May 3 and 4, 1918.

† Quoted by Ezio M. Gray, 'Guerra senza Sangue,' 1916, p. 70.

Moscow in the same year, just after the fall of Lemberg, were organised by German agents who received their instructions direct from the German banks in Russia. Both the Deutsche and the Mezhdnarodny Banks were actively, though insidiously, organising strikes and paralysing work in factories.

Ever since the foundation of the Empire, German bankers seem to have been ready to lend themselves to political intrigue of the most repulsive kind. The work of the two German bankers Dr Wilhelm Knappe and Hermann Militz, who during the decade 1891-1900 secured so much influence in De Nationale Bank van de Zuid-Afrikanische Republiek (Pretoria), was consistently directed to fostering anti-British sentiment. These two worked in intimate collusion with the notorious von Herff, the German consul, and were in regular communication with the Berliner Diskontogesellschaft, the correspondence between them and the latter showing the systematic attention given to the question of ousting British paramountcy in South Africa. In 1892 the manager of the Diskonto wrote to Knappe: Great Britain is, after all, a very powerful force, which, though it can be annihilated on a patient piece of paper, cannot be so easily got rid of in hard reality.'

The foregoing evidence of German industrial, financial, and political' penetration,' exercised through the banks, is based largely on the utterances of Germans themselves; but it conveys no adequate idea of the extent to which German finance has permeated all these countries in the interests of Deutschtum. The writer has recently read the whole of the card-indexes (record cards), nearly 100,000 in number, of the London branch of the Dresdner Bank, and a considerable portion of the correspondence of this branch with the head office and with German firms. These card-indexes prove conclusively that the bank had agents and representatives in every part of the world, information from whom was collected, collated, and then distributed to various quarters in Germany. New commercial ventures, new companies formed or projected, with the names of the directors and the prospects of the enterprise, growing competitors in any line of business and their resources, new fields to be