Background For War: The Neutrals

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Spain, comfortably distant from the sound of guns, profited enormously from high prices and increased production of grain, olive oil, beet sugar. Shipping companies made killings. But by strengthening the industrial and financial power of the Basques and the Catalans, who were separatist in their politics, this war prosperity helped to undermine the monarchy. Spanish laborers drifted over the Pyrenees to France to work for war-time wages and sent money home. Yet with ownership of land and capital heavily concentrated in a few hands, peasants and stay-at-home workers failed to share in war profits.

Italy, while her politicians coyly debated which side to join, did not suffer greatly in 1914 and 1915 except from the rising cost of food. In Rumania and Bulgaria peasants suffered less than townspeople in the first years of the War as both groups of belligerents tried to buy foodstuffs, but both governments had finally to fix prices.

Rumania, her trade reduced to a mere exchange of goods with the Central Powers by the closing of the Dardanelles, approached crisis before she threw in her lot with the Allies. The peasants—a great majority of the population in each country—unable to buy industrial goods, finally ceased to produce crops for the market, practically fell back on subsistence farming.

American Offstanders. All the Latin American nations* had their manufactured imports from Europe reduced to a small fraction by the exigencies of war, and were forced to buy from the U. S. How this affected them depended on what they had to export.

Brazil's coffee and rubber business went to pot. She made an enforced about-face and began to export kidney beans, sugar, beef, manganese. Before the end of the War her foreign trade had contracted 22% in dollar volume and 46% in physical volume but she had an export balance of $70,000,000 to $100,000,000 a year.

Argentina's meat and wheat had a war market, but her inability to obtain her customary imports handicapped her industry, and deprived her Government of its chief revenue, customs duties. She had desperately to borrow money and launched on a still-continued effort to become self-sufficient.

Far different was the war experience of Chile. Her big exports were nitrates (essential for explosives) and copper, another important war necessity. After the first disruption of the War gave her a bad setback in the fall of 1914, she rode on the crest of the wave. Her Government, which depended largely on export duties, was flush. Her mines prospered. Her export balance, which amounted to $300,000,000 in 1913, jumped to over $1,500,000,000 in 1917. In the four years of the War her export balances reached $5,500,000,000.

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