FIGHTING THE TRADE OCTOPUS

Dominion, Volume 11, Issue 42, 13 November 1917, Page 5

FIGHTING THE TRADE OCTOPUS

THE GERMAN "CIRCLE" SYSTEM

A SUBTLE MACHINE

Mr. E. Saunders, delegate of tho South African Federated Chamber of Industries, was tho guest of the British Empire Producers' Organisation at the Waldorf Hotel on a rccent occasion. Mr. W. A. S. Hewins, M.P., presided, and among those present were Mr, Sandbach Parker (chairman of the Empiro .Producers' Organisation), Sir Thomas Mackenzie (High Commissioner for Nov Zealand), MajorGeneral Sir Newton Moore (Agent-General for West Australia), Sir H. Babington Smith, Sir Marshall ltuid, Mr. Basil Polo, M.P., Mr. F. M. B. Fisher (oxMinister for Customs, New Zealand), Mr. 0. C. Beale, Mr. C. Du I>. Cliiappini, ' and Sir George Makgill. Mr. Hewins, in proposing Mr. SaWN ders's health, snid their guest had been instrumental in mobilising tho industries of South Africa on an extensive and comprehensive scale and on a basis that . was calculated to produco practical and gratifying results. Tho enormous advan- ■■ tags to Englishmen of contact with tho thought and aspirations and activities of the Oversea Dominions, could hardly bo over-estimated. It was not wo in England who had mado the pace in rcceJ*t years, but Canada, Australia, Bouth' Africa, New _ Zealand, niul other our Oversea Dominions, and if tho Empiro was to progress on Imperial line we must all strivo to.keep pace together. (Cheers.) Promotion of Jealousies. Mr. Saunders, in responding, Enid tho success of the movement to create a federation of industrial institutions in South Africa would lia.vo been even more successful than it had been if it were not for tho fact that it had followed, upon ' previous unsuccessful attempts, the failure of which was duo to local jealousies, promoted, he believed, by men of German descent, actuated by sinister motives. (Hear, hear.) Howovcr, notwithstanding these previous experiences, the result of an invitation to nearly all the trading and industrial associations of tho South' African Union to send delegates to a conferenoe in Capo Town was the formation of the Federated Chamber, of Industries, in which nearly all tKo industries of tho country were represented, and whioh was affiliated with and organised to work on lines similar to thoso of tho British Empire Producers' Association, (Hear, hear.) Ho thought, there* fore, that SoutE Africa could now bo regarded as a supporter of tlus movement to overthrow tho German domination not in the Union but in.the Empire. (Cheers.) What that domination was like and how insidiously it had been developed was brought home to the people of South Africa by tho revelations in what was known as tho Hypatia case, in relation tt> a cargo of imports to South Africa from America by that ehip. Tho facts then brought out showed the onormous power a nation could wield by commercial combination in the affairs of the world, and how this power could be utilised to direst and to a largo extent control not only commercial matters, hut tlie politics of a country ns well. This was dono largely J>y ™ w as known as tho German Circle system, which had grown out of tho Cartel system. The centre of tho urclo was nearly always one of the large Herman banks, such as tho Doutecho ii j,?' ' )y a m °thod of guarantees, enabled tho members of tho Circle to obtain practically unlimited credit for their operations. Tho bank was represellted on the boards of companies, which, while nominally independent of cacli other, formed a part of tho Circle and acted m concert under tho rules of the Circle, at the same time being under the direction of thoir own board and staff. Unlimited financial support was available where business was considered sound, thus enabling orders for any amount of money to ho taken. There was no competition between members; all were hound to work together and place orders within the Circle whenever possible. British subjects were nover employed excent when absolutely necessary or for tho soke of appearance. This was illustrated in one notorious caso of a German firm whioh traded 1 under one name in South Africa, under other names in America, France, Spain, and England, but all working into each ether's hands and actuated by mutuality of interests. Tho sinking of the Lnsitan'ia caused such an outburst of public indignation in Sou.th Africa that the German branchos in tho Union were wrecked and had to ' be reconstructed, but the faot remained that tho power and facilities provided by such ft system were almost unlimited, and we had no_ guarantee that it would j not bo re-established after the war under new disguises and with renewed capacities for dominating British trade. Reclamation of Our Empire Trade. If we were to succeed in reclaiming our Empire trado after .tho war it WRB essential for us to apply to ou,r conditions as much of the German system as might he necessary, and it was only by working unitedly together that we could hope to i do so. (Hear, hear.) Through the hold ; they had obtained of tho gold-milling industry in South Africa the Germans were able to influence public opinion and legislation in such a way that without directly appearing in it they were able : to assist their agents, who by the use ! of -unlimited funds and influence could ' and did engineer a great deal of the ■unrest and Taco hatred South Africa had suffered under. (Hear, hear.) large groups of mines, employing many tl'miefinds of men, wore rigidly worked on the Circle system, and, as a consequence, orders for machinery went to Germany in almost every ense, and Germans wero nearly always employed in all the highest _ positions. These groups created subsidiary companies embracing almost' every form of industry and trade, and, as in the case of the German South African firm ho had already indicated, they usually appeared in tho form of a. British limited liability company of tho ■ most innocent nature. In most cases, howevor, practically tho whole of the shares wero owned by the members, and tho business was conducted under the most ripid rules of the Circle. Tho. Rand mining industry was Jargely under German influence. It need, thcreforo, cause_ no surprise that one large mining and investment corporation, with nn English name, found it convenient to invest nearly J>700,000 in German, Hungarian, and Turkish funds and securities before the war, or that other largo Band mining companies also deemed it advisable to make investments to n large por- ; tion of their surplus funds in the same way. Ono of the most effectivo ways of countering this insidious Germanisation of our industries would be foind in such movements as tho South African Fedcrated Chamber of Industries and tho British Empiro Producers' Organisation. (Cheers.)