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The Germans have become equally sceptical of England's policy, which they suspect of concealing a provocative design rather than the peaceful intention professed. They believe that English policy is not content with the prospect of, in part, excluding Germany from the British markets to which she has hitherto enjoyed free access, but that it is also directed towards debarring German trade from overflowing into the markets of some distant neighbours, and to complete Germany's discomfiture a great Continental alliance is aimed at which shall isolate her and grip her so closely as to paralyse her past recovery. Added thereto, England is to have an Army of Continental proportions with which to strengthen her allies in any armed conflict with Germany.

If this may be taken to represent fairly the state of feeling on both sides, it surely needs no seer or divining hand to indicate the direction in which the needle of events is pointing.

With a view to directing them into conciliatory channels a recent professorial address on the subject of Anglo-German relations given by a leading national German economist, Professor SchulzeGaevernitz, will attract attention in this country.

Professor Schulze-Gaevernitz is no stranger to the English reader; his works on English social problems, on Russian finance and administration, and more recently his volume on British Imperialism, are well known. The latter contains an analysis of the moral philosophy which at successive periods influenced English thought and character and a development of the ideals, mainly religious, to which he attributes England's great industrial development. He is a frank admirer of the British State organism and the English nation, and considers their enlightening influence essential to the world's progress.

At the same time German to the backbone, he is frequently cited by English writers, with Professor Brentano and others, as an enthusiastic believer in Germany's future on the sea.

His attitude of mind on this subject, and more particularly in its relation to the future of British power, is set forth in his recent academic discourse. That his statements have authority may be inferred from the fact that Prince Buelow made frequent use of them in introducing his latest Financial Reform Bill.

The author seems to approach his subject without any political bias and bases his discussion purely on established facts. He divides the problem into two issues, the political and the economic, and treats them distinctively.

He begins with the political controversy and introduces it from the English point of view, and analyses and reviews the causes of England's case against Germany.

England, he says, had absolute control of the seas after the Napoleonic wars which insured her unrivalled trade supremacy,

not only within her Colonial Empire but in foreign Colonies as well, and established it more especially, perhaps, in those which, like the South American States and Mexico, had gradually seceded from the Iberian Powers.

When Free Trade was introduced in 1846 English politicians prophesied that foreign nations would soon follow the same course, which they believed would make England the workshop of the world, as she must absorb the raw products of other nations and give them manufactured goods in exchange. The dream of the Free Traders was not to be realised, and in the meantime they became confronted with the great political events which changed the entire economic conditions of the world.

In North America, the United States was the outcome of the Civil War; her increasing power soon engrossed the whole American continent south and confirmed the establishment of the Monroe doctrine. In Central Europe the rivalry between Prussia and Austria eventually resulted in the supremacy of Prussia and was preliminary to the unification of Germany. Other States, Italy and Hungary for instance, inspired by national sentiment, began to enter upon a new phase of industrial and political ascendency.

Instead of these newly constituted groups adopting the British Free Trade principles as had been expected, they all resorted to a system of Protection that gradually secured them a strong footing in their own markets and endowed them with a vitality enabling them to engage in competition with Great Britain in foreign spheres. In some cases, as with Germany, aggressive Protectionism in the form of bounties and dumping was adopted, which Professor SchulzeGaevernitz holds with English politicians to be an unfair form of competition.

Having by these measures secured economic success the United States, Germany, and even Italy, proceeded to give it a political foundation by means of increased armaments, and herewith the great Continental armies and latterly the development of the American and German Fleets.

The growth in man and money power of these rival nationswhich progressed alongside of industrial expansion is, he thinks, & genuine cause for uneasiness among Englishmen who believe their trade and maritime supremacy to be seriously challenged. It is an anomaly that this struggle for Welthandel and Weltmacht should be confined to the three great branches of the Teutonic family-England, the United States, and Germany, whose religious, racial, and intellectual relationship ought to be conducive to wider co-partnership.

A series of statistics is imported into the argument to show therelative progression of trade and national expansion of the threecountries which have led to the conflict of interests.

The following table offers a few examples, France being added for the purpose of comparison :

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1905.
Production of Sugar
(in 1000 tons):

1896-7
1905-6

nil

nil

330,316
623,536

1,821,223
2,400,771

668,546
968,580

(a) Horned Cattle
(6) Sheep.
(c) Pigs

1901
11,477,824
30,829,889
3,411,129

1902 61,424,599 62,039,091 48,698,890

1904 19,333,568

7,907,173 18,920,666

1901 14,673,810 19,669,682 6,758,198

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America is shown to be England's most formidable rival, and yet, says Professor Schulze-Gaevernitz, she may be regarded from every point of view as hors de concours in her relations with England. Neither economically nor politically is Great Britain in a position to assail the increasing ascendency of this Power, because economically America is in the main self-supporting, rich in minerals, in oil, cotton, and agricultural products, and because, politically speaking, she holds Great Britain in check by her commanding position over Canada. Naturally then under these circumstances England refrains from political controversies with her more (formidable competitor and seeks to concentrate on her as yet minor rival, Germany. Although the trade and industries of that country are still largely outstripped by England, it would be self-deception, continues the writer, did England not see in the ever-increasing population of Germany, and in her aptitude for applying scientific principles to commercial ends and in the magnitude of her military organisation an encroachment on her world-power.

The German position is next under consideration. . English policy is said to be distrusted by a large section of the German nation, a sentiment that dates back to the days of the Vienna Congress, when England's predominating influence lost Germany the Southern Provinces of the Netherlands, which up till the wars of the French Revolution had been German territory, and with them went that invaluable possession the Mouth of the Rhine.

Again, in the days of the Danish conflict, no statesman was more vehement than Palmerston, no Power more violent in disclaiming Prussia than the British nation. Nor can United Germany forget England's political attitude during Germany's national struggle in 1870, when she caused the delay of the bombardment of Paris. Even more recently England has displayed antagonism in hampering Germany's colonial expansion, while France, who suffered defeat, has been permitted unchecked to establish a vast colonial Empire.

Against these hostile sentiments Germans appreciate the services rendered to their cause by Carlyle, who spread German literature among his countrymen, and during the critical period of 1870 endeavoured to secure England's political sympathy for the rise of the Central European Power. Nor does Germany disregard the influence of Queen Victoria and her Consort in winning over her subjects to sympathy with German ideas. Already in 1857 the trend of events was foreseen by Bismarck, when he said : ‘England views with ill favour our attempts at creating an oversea trade and a Navy, and is jealous of our industrial development.' He spoke in advance of his time, as the political relations between the two countries were at that period amicable, and, moreover, England had no need to look upon Germany, whose status was agricultural, in any other sense than that of a secondary Power.

Bismarck it was who, consciously or not, originated the revolutionary changes in Germany which have produced the present situation, and by converting Germany's fiscal system from Free Trade into Protection, built up her industries on their present vast scale.

An important factor in this development has been the free access of German manufactures to the English markets and the favoured tariffs they have enjoyed in the British Colonies. Professor SchulzGaevernitz, in fact, admits that except for these facilities the growth of Germany's industrial organisation would not have been possible, though it was also aided, he points out, by that trade-mark regulation “Made in Germany, which instead of a deterrent has become in course of time a hall-mark of excellence.

The progress of fiscal and industrial action operating in co-relationship has gradually raised Germany to the level of a rival of Great Britain, and indeed in some of the industries, as in the steel, iron, and indigo trade, she has actually outdone her. Thus Germany, who is also benefited by an exemplary educational system, is no longer the peasant country of Bismarck's time, but ranks to-day as an industrial State of the first order.

As long as she was confined to Europe, the Army was sufficient for defence, but when her trade began to reach oversea, and the need!

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