ing to
the size of the German Empire, the transport of troops must seriously
interfere with the conveyance of goods to the larger centres of population.
It would seem, therefore, that the policy of developing German agriculture
at the same time that her dependence on foreign commerce is increasing is
not an effective reply to the British Navy. The position in Germany then is
that she must for the present be satisfied with a much smaller amount of
imported food-stuffs and of the raw materials of industry; and that in any
case, even if the industrial machine could be kept at work, there will be
practically no outlet for goods abroad. Commercially isolated, she must,
therefore, suffer an industrial and commercial collapse. On the other hand,
the total volume of unemployment, which would have been enormous during
the first weeks of the war, has of course been considerably reduced by the
withdrawal of great masses of men to join the colours, and by the stimulus
which the war has given to industries supplying the needs of the German
armies. Then also Rotterdam, through which Germany does a great deal of
its trade, remains open, whilst a fraction of her foreign trade is being
carried on through Denmark, Scandinavia, and Switzerland. Nevertheless, the
amount of economic distress within a very few weeks after the outbreak of
war, especially in the large towns, was considerable even on the showing of
German newspapers.[2] The amount of distress was increased and intensified
by steadily rising prices. As the rise has taken place not only in
commodities of which there is a shortage, but in others such as sugar, it
may be concluded that it is due largely to the inflation of the currency,
owing to the adoption of the fatally easy expedient of issuing large masses
of paper money.

[Footnote 1: _Ibid_. p. 217.]

[Footnote 2: "Let us imagine," says Bernhardi, "the endless misery which
a protracted stoppage or definite destruction of our oversea trade would
bring upon the whole nation, and in particular on the masses of the
industrial classes who live on our export trade" _(Germany and the Next
War,_ p. 232).

According to _The Times_ (Sept. 18, 1914) the German nautical newspaper
_Hansa_ on Sept. 12 admitted that England had captured many millions of
marks worth of German shipping, and that "the cessation of business will
cost our shipowners many millions more." "It will hold up the development
of our shipping trade for years." The _N