The mass of the people were strongly in favor of neutrality. The war affected them chiefly through higher prices, unemployment and scarcity of food, against which they expressed resentrnent by occasional riots and strikes. Though the sympathies of the better educated classes were strong on one side or the other, relatively few advocated joining in the war. The Liberals, Republicans and Socialists, through their sympathies with radical and anti-clerical France, were pro-ally, as were part of the pro fessional classes. Partly through dislike of French anti-clericalism, the Church leaders, the Clericals and the Conservatives, together with most of the army officers, were pro-German. Some Catholics however protested against the outrages in Belgium. The king personally ap peared to favor the Allies, but he maintained a correctly neutral official attitude. He individu ally established a bureau to locate missing per sons in the war area. The government tried to be neutral and curbed violent outbreaks of sympathy for either side. It was repeatedly crged that German submarines were getting supplies at unfrequented places along the coast, which it was hard to guard properly. Several damaged submarines were interned in Spain, but one or two later escaped, apparently through the connivance of local officials. The Allied re strictions seemed to the Spanish irksome and illegal, but still greater resentment was aroused by the German submarine campaign, particu larly after February 1917. By August 1918, one-fifth of the Spanish tonnage had been sunk, much of it outside the area °catered by Ger man decrees, some of it even in Spanish waters, with considerable loss of life. The Cabinet finally announced that future losses would be made good temporarily by using equivalent German tonnage interned in Spanish ports. Ger many would not agree to this. In October 1918 preliminary steps were taken for carrying out the Spanish plan, but hostilities ended before much was done. During the war there were a number of Cabinet changes, due largely to dif ferences over internal questions. In foreign affairs, Liberal and Conservative and coalition governments alike held to a policy of neutrality, though Romanones rather favored intervention on the side of the Allies. The government was forced to resort to extra taxes and to loans, the latter being floated with difficulty. In 1916 Spain refused to join President Wilson in sug gesting to the belligerents that they state thetr war auns, suggesting however the formation of an entente atnong neutrals to uphold their rights.
Internal problems had to do with the de velopment of a more genuinely democratic gov ernment, administrative decentralization, the in auguration of a program of social and economic reform, the development of Spanish resources, the strengthening and reform of the army and the control of the conunittees of army officers, and the formulation of a more satis factory Moroccan policy. These diffieulties were of course intensified by war condi tions. Internal economic problems caused much anxiety. At times embargoes on food stuffs and raw materials were laid, and then relaxed. Scarcity of coal crippled factories and railroads. In March 1918 coal was selling at $45 a ton. The food shortage, though at times serious, was less so than in most other European countries. Part of the difficulty was
caused by extensive exports of foodstuffs, in cluding grain, sugar and wine, amounting in 1916 to $106,000,000 and in 1917 to $101,000,000. Imports of food were from one-third to one half of these amounts. Part of the food scar aty at home was attributed to food specula tion. Some Spanish manufacturers were helped by the increased demands from the belligerents, particularly France and England. After falling off in 1914, imports and particularly exports rose considerably above the figures for 1913.
Large orders for the American almy (mules, blankets, food) were placed in Spain. When there were delays in delivery — possibly not unconnected with German activities— the United States brought pressure to bear by hold ing up the export of much-needed raw materials. In March 1918 an agreement was reached by which Spain was to send supplies to Pershing, and was to give France a credit for supplies, receiving in return permission to import oil and cotton from the United States.
South America.— The economic effects of the war were immediately felt in South Amer ica. As a continent, South America eacports foodstuffs and raw materials, and imports coal, oil, foodstuffs and manufactured goods from Europe and the United States. South American countries are largely in debt and continue to rely on outside capital for further economic de velopment of their resources. For some months the interruption of normal trade and the dis arrangement of international credit caused de pression and distress. Nearly everywhere a moratoritun was declared. Customs revenues fell off, and retrenchment, new taxes and addi tional loans were needed to meet governmental deficits. In Chile die export of nitrates was crippled, and with it the finances of the gov ernment. In Brazil, already suffering from e fall in price of rubber and coffee, disorders broke out among unemployed rubber collectors. By 1915 conditions began to improve somewhat A determined effort was made by the United States and Great Britain to capture the large trade formerly done by the Central Powers. The increasing demands of the Allies for food, sugar, hides, copper, tin, rubber and nitrates caused a revival of exporting. By 1916 the Chile nitrate industry was more prospezous than ever. The Argentine had a market for all the grain for which transportation could be secured. The chief difficulty was with shipping, owing to the increased losses by submarines and the diversion of ships to more pressing uses. Freight rates rose very high. South American • ..rts fell from $1,033,000,000 in 1913 to $536, 111,000 in 1915, rising to $646,000,000 in 1916, Before the war between 13 per cent and 16 per cent of these imports came from the United States. In 1916 the percentage rose to 36, and later to nearly 50. South American exports fell from nearly $1,160,000,000 in 1913, to $S89,840,000 in 1914, rising to $1,233,000,000 ia 1916.
Some.questions of South American neutrality were raised. German cruisers in the early days attempted— sometimes with success— to obtain supplies and wireless information from South America. Britain ,protested. Chile, Ecuador and Colombia deiued any unneutral activities. The German cruiser Dresden was sunk (14 March 1915) by the British in Chilean waters. England explained and apologized.