The British people had witnessed the won derful growth of Germany with mixed feelings of admiration and uneasiness. They had seen German enterprise invade all markets of the British Empire. Unprotected by tariff barriers, the United Kingdom es,pecially was flooded with commodities bearing the legend, 'Wade in Ger many.* Yet the British continued to buy Ger man goods because they needed them; because they were cheaper than the home product or because British-made equivalents did not exist. Until quite recent years, indeed, England was entirely dependent upon Germany for the car bons used in the searchlights of the British navy. Not only did the energetic Teuton run the conservative Briton close in every foreign market, but had even elbowed him out alto gether in some. So far from adopting the mother country's system of free trade or, more correctly, of free imports, the British self governing dominions raised protective tariffs, in some cases granting preferential rates to the homeland. The economic necessities of a nation dictate its policy to a greater degree than purely political considerations, and it is in the domain of economics that perhaps one of the principal tmderlying causes of the war may be found. Nations, like individuals, live by their labor; their purchasing power is strictly regulated by the extent of their earning capacity. Growth of population demands increased production, for the disposal of which markets are essential. Great Britain and the United States were Germany's chief commercial rivals; in America she was faced with a formidable tariff wall, while similar restrictions confronted her in the British Do minions. The United Kingdom alone clung to "free trade,D but its abolition seemed within measurable distance. The tariff reform and "Imperial Preference) campaign inaugurated by Joseph Chamberlain in 1903 gained millions of supporters throughout the empire and at libme, and the probability loomed large that the vast territories it embraced would be closed to Ger man trade. For years before the war Germany stood in a critical position. Her great indus tries had been built up under the fostering in fluence of the Zollverein. Bismarck's protec tionist policy during the period 1880-91 had evoked reprisals from neighboring nations, and the number of open foreign markets diminished. At the same time Bismarck neglected to create a colonial empire capable of becoming a na tional receptacle for the over-production at home. An industrial crisis ensued and a stream of emigration followed. Between 1891 and 1907 Germany concluded a number of commercial treaties with other countries and soon began a vast exportation of raw and manufactured products, aided by a flexible but precarious banking system of financial and • industrial credit. German banlcs were constantly being drained by advances to manufacturers and traders, and frequent appeals for foreign capital became necessary. Enormous sums were bor rowed from French banks and, to a less degree, from British financiers. •Recurring interna tional political crises and rumors of war be tween 1906 and 1911 instantly closed these sources of fluid cash, and when, on such occa sions, the creditors pressed for settlement, the German banks were obliged to pay with real money instead of promissory notes. An in structive object-lesson on the intimate relation ship between finance and politics was furnished by the Agadir crisis in 1911. On 1 July the German cruiser Panther arrived at Agadir. Two months later Germany required $12,000,000 immediately, which was raised in the United States at 6 and 7 per cent; in normal times this money could have been obtained in Paris at 3 or 4 per cent. The system of malting lavish advances to clients militated against the pain tenance of adequate funds in hand, and it was not always easy for German savings banks to meet their liabilities in periods of panic, under the stress of which industry, trade and finance all suffered.
It was from outside, however, that German industry was more directly threatened. Even more than open markets in which to sell her goods, Germany needed an open market from which to buy other essential products, a real "matter of life and death.x's With ever-increas ing commercial and industrial competition to fight against, practically all the progressive coun tries had erected tariff walls to protect their home industries, the United ICingdom alone ex cepted. Germany herself was strongly pro tected by import duties, and when other states adopted like measures to favor their own in dustries, a conviction gradually grew among the German people that their country was being encircled, hemined iri, and deprived of its place in the sun; that a great conspiracy was afoot to throttle their national existence. In time, England came to be regarded as the instigator of this supposed plot, although the legend did not come into existence until the Anglo-French rapprochement in 1904.
Closely connected with the economic factors lay the question of overseas expansion, of colo nization or at least the procuring of colonies by Germany. Bismarck, the creator of the former German Empire, could not foresee the great industrial nation that would arise on the foun dations he had laid. He discouraged coloniza tion in his own country and encouravd it in France and Russia. He had brought Germany to the zenith of her influence at the Berlin Congress (q.v.) and made her the dictator and umpire of Europe. After a victorious war, Russia emerged empty-handed from that his toric gathering; Austna, a passive spectator and a potential German ally, was compensated for Sadowa by being presented with Herzegovina and Bosma and the prospect of an outlet on the Mediterranean via Salonica. With the:gates of Constantinople closed against her, Russia turned toward Central Asia, and France, still smarting under her defeat of 1870-71, was skilfully guided into a series of colonial adventures. (See FRANCE AND THE WAR ; ITALY AND THE WORLD WAR). Germany stood aloof from colo nial enterprise. Bismarck made an ally of Aus tria, embroiled France with Italy in northern Africa and successfully manceuvred the Italian kingdom into partnership with Germany and Austria to form the Triple Alliance (q.v.). But while this undoubtedly strengthened Germany's position in Europe, Bismarck committed two grave errors in sacrificing a colonial empire and making an enemy of Russia. He seems to have realized the latter mistake when it was too late, for he devoted the remaining years of his ad ministration to determined efforts to restore friendship with Russia. At the Conference of
Berlin in 1884 Bismarck half-heartedly accepted Togo, Kamerun and Southwest Africa to satisfy public clamor, though in principle he remained hostile to colonial expansion, regarding Ger many's real historical mission as anchored in Europe. Between 1885 and the fall of Bis marck in March 1890, Germany acquired her former East African possession and some Pa cific island groups. Her colonial expansion ended in 1899; there was no useful unclaimed territory left.
From the seeds sown by the Treaty of Franlc fort in 1871 and the Berlin Treaty in 1878, Europe reaped a harvest of tragic results. By the first instrument France lost Alsace and Lorraine; it left behind ineradicable sentiments of hatred and revenge and converted Europe into a great armed camp; the second granted an undeserved new lease of life to the .Sick Man of Europe and violated that great prin ciple of nationalities which has become the foundation of the political morality of Europe. The Serbs were the first of the Balkan peoples to throw off the Turkish yoke in 1804, and when the Bosnians rose in 1875 their kindred in Ser bia and Monteneg.ro cheerfully responded to the battle cry against the historic foe. Thew victory seemed assured and the freedom of Bosnia accomplished when Austria intervened, and the subsequent Congress deprived Serbia of the fruits of her sacnfice and left Bosnia nominally under Turkish suzerainty but actu ally in the possession of Austria. Macedonia was handed back to Turkey, and Serbia was left to struggle a a new and powerful enemy, whose r to Salonica she barred by the mere fact of her geographical existence. Austria led Serbia into a disastrous war vrith Bulgaria in 1885, and was mainly responsible for the second 13alloin War of 1913. TWO fur ther direct resuhs of the Berlin Congress must be noted: It brought together the two nations whidi had suffered at the hands of Bismarck — France and Russia—into an alliance which placed Germany, situated in the centre of Europe, between two powerful enemies, one on each border. By saving the Turldsh Empire from Russia, Bisniarck had placed the Sultan Abdul Hamid II under obligations, with the result that shortly after, in the early 80's, German penetration in the Near East began to assume the shape of a settled policy which; under William II, developed into a quasi pro tectorate over the Moharrunedan world and a program of German expansion via the Balkans end Constantinople to Mesopotamia and the Persian Gulf. During the 20 years of his rule after Sedan, Bismarck purred a cautions policy of conservative concentration to consolidate the position he had won for Germany. His sacri &-e of Russia's friendship at the Congress was tmavoidable: he had to thoose between drat cotmtry and Austria, though he afterward con cluded a (reinsurance treaty* with Russia, by whith means he believed that he had isolated France and rendered her innocuous. He had no liking for England, yet he was careful not to endanger friendly relations with that country. 4If I should discover that we might lose touch with England,4 he told the Reichstag on 26 Jan. 1889, 41 should act cauticnisly and endeavor to avoid losing England's goodwill.' Not long after the retirement of Bismarck, German foreign policy began to shape a course that puzzled and not infreqnently alarmed die chancelleries of the Old and the New Worlds. Concisely stated, that policy amounted to an insistent demand to piay a leading part in the guiding and ordering of international affairs eyerywhere. Within two years of his acres non the new emperor, William II, had (dropped the pilot)) and taken full command. Whereas Bismarck had been content to make Germany the foremost power in Europe, Wil liam Il undertook to transform her into a 4Weltmachti or World Pcrwer. There vrere but four states at the time to which the term world power cotild strictly be applied— Great Baitain, United States, Russia and France. As has al ready been pointed out, Germany was a late comer in the competition for places in the sun; the hope of creating a new world power could hardly, apparently, be realized without the men ace or exercise of force. It is significant enough that all of those four existing world powers were subsequently arrayed in armed conflict against Germany; that they were ac tively supported on land and sea by eight other independent states, while yet another 15 re pubhcs and one kingdom (Siam) sim.,ified their sympathy vrith the enemies of Germany by declarations of war or severance of diplomatic relations. Hemmed in on either side by France and Russia—one of them a mortal enemy — Germany beheld across the North Sea the is land fortress of Great Britain, a country de yoted for centuries to the principle of prevent ing any single power from dominating Europe. The British navy, furthermore, possessed the ability to close boda mcits from the North Sea to the Atlantic. Germany's only possible avenue to die ottter world, following the fine of least resistance, consequently lay to the south. Yet even a maritime outlet through friendly terri tory to the Mediterranean via the Adriatic or ./Egean would avail little in wartime without command of the sea. An overland route through the Balkan Painsula furnished the one alternative, and the road must necessarily lead throuigi either Rumania or Serbia, in order to estabhsh communication with places beymd Europe. But Rumania's situation on the Rut. skin frontier offered go guaranty that such a passage could be kept open during war, hence the thoice of a German corridor to the East was perforce limited to Serbia, a poor, sparsely populated country. To Austria, Serbia was a thorn in the flesh, a real danger to the stability of the former Dual Monarchy by reasou of the Pan-Serbian agitation which threatened to de:. tech territories and millions of Austrian subjects from the einpire Serbia also stood in the way of the Austrian (Drang nach Osten) policy — the march to Salonica. To Germany, on the other hand, an independent Serbia was a stub born obstacle that blocked the road to COrt. stantinople and beyond. The idea of Serbian unity, embracirig the Jugo-Slavs (Croats and Slovenes) contained within itself the destruc tion of the Turldsh and Austrian empires arid the formation of a new independent state from the broken fragments of these two empires, Five centuries of Turkish effort had failed to stifle Serbian nationality, and upon that same rock the Hapsburg Empire beat in vain for 40 years, only to shatter itself in the end.