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American Trade, and the demand for tonnage soon
doubled the freight rates, even before the end of
1914. This rise was considered enormous, people
being unable at that time even to dream of the coming
rises, and the shipowners did their utmost to get their
share of the benefits of this revival of shipping.

Gradually, as the war went on, the belligerents
more and more were in need of their tonnage for
transport between their own countries and the various
fields of war. At the same time England adopted the
system of taking all neutral ships in to Kirkwall for
examination, and here, as well as in all other Allied
ports, when ships came in for discharge, they were
always much delayed. The consequence was that the



53

demand for tonnage grew ever stronger and that the
freight rates increased by leaps and bounds.

Attempts were made from time to time by the Dan- Failure Of
ish Government, which wished to see Denmark sup- Attempts
plied at moderate freight rates, as well as by the To Regulate
governments of the Allied countries, to find a way Rates,
to regulate the freights and to prevent their rising.
These attempts failed, however, in the main and were
bound to fail on account of the world-wide extension
of shipping which cannot be regulated by government
offices, even if the countries are both large and
powerful.

The Allied countries, especially England, succeeded
only in accomplishing the opposite of their object, as
the result was to a certain extent the stopping of traffic.
By keeping back neutral ships and by refusing them
supplies of bunker coal they succeeded, however, in
compelling them to make voyages of duty, at rather
reasonable freight rates, into waters where the ships
would not have sailed under other circumstances, and
where their presence has too often been fatal, on
account of the submarine warfare. A very great num-
ber of the Danish ships which have gone down during
the war have met their fate on such enforced voyages
of duty.

The freight rates then rose without interruption
and still further increased, since the tonnage was
reduced at the same time as the demand for it was
growing. Shipbuilding, although accelerated in all
neutral countries and also in several of the warring
countries, was insufficient to compensate for the
enormous reductions caused by mines, then by tne
first submarine war, and finally by the unrestricted



54

submarine war, in which the Germans soon included
neutrals.
Losses Of At the close of the year 1914 Denmark possessed a
The Mer- mercantile marine of steamers with a net registered
chant tonnage of about 433,900 tons (four ships having been
Marine, lost by mines in the course of the year) , and of motor
vessels about 42,350 tons, or a total of 476,250 tons.
In the course of the years 1915 and 1916, 86 steamers
were lost by torpedoes and mines, totalling a net
registered tonnage of 57,415. In the course of 1917
the Danish mercantile marine has suffered a loss of
129 steamers on account of the war, nearly all on
account of the unrestricted submarine warfare, total-
ling a net registered tonnage of 86,503. During 1915
to 1917 altogether 215 steamers of net registered
tonnage of 143,918, or 223,733 gross register tons,
were lost. If to this loss, four ships of 8,212
gross registered tons, lost in 1914, are added, Den-
mark's loss of steamers has amounted to a total of
219 ships of 231,945 gross registered tons up to the
end of 1917. At the same time, a rather large number
of sailing vessels has been destroyed.



The other side of the matter represents an economic
profit. Many ships succeeded in getting through,
enormous freights were earned, and the profits were
large in spite of the increased expenses in all respects.
The value of the ships rose rapidly and may no
doubt be expected to decline only very slowly after
the war, as the demand for all available tonnage will
be very considerable for a long time after the war,



55

without regard to costs. All this cannot, however,
compensate for the loss of many courageous Danish
sailors, nor for the paralysing of trade and the result-
ing scarcity and want of employment at home.

Furthermore, the whole increase of the freights is
naturally not a net profit for the country. In the first
place, the expenses of the shipping trade for its own
supplies of coal and many other articles from abroad
have been very large. In the second place, part of the
freight consisted of goods destined for home con-
sumption, and consequently, even if these increased
freight rates have benefited the shipping trade, they
must be paid by the country in greatly increased
prices for the goods.

Still, the net profit on the shipping trade has been
so large that nobody would have thought it possible
before the war. At the same time, as said above the
country's fortune has grown very much on account
of the enhanced values of the ships, the total sum of
which greatly surpasses the total value of the ships
before the war.

As shown above, commerce with foreign countries Prosperity,
brought much money to Denmark, especially during
the first years of the war. For the first three years
of the war, the entire Danish trade flourished as
never before, also to the benefit of our large cu-
stomers, the Allied countries, and England in parti-
cular. By the distribution of the earnings among al-
most all parts of the population, the prosperity was
general in the country.

However, as will be known, everything in the world
has its inconveniences, and consequently great pros-
perity has also its own burdens to bear. As is always



56

the case when people get much money without being
used to it, an improper and ostentatious luxury
was shown also here, in certain circles, and in spite
of the number of these persons not being very large,
they made a great sensation which was hardly
flattering. However, the indignation on the part of
the better classes soon led them back within proper
bounds.
Scarcity. But this picture has more than inconveniences; it
has a reverse; and the reverse in this case is the ex-
treme scarcity of all goods, caused by the war, which
cannot easily or quickly be redressed.

In Denmark as in all other countries, an enormous
rise in prices has taken place during the war. This
rise applies to all goods, though in different degrees,
and is on the one hand a consequence of the altered
conditions of production and import caused by the
war, and as such shows the difficulties to be met with
by the producers. On the other hand, it has compelled
the consumers to buy on unfavorable terms, in spite
of important price regulations. This will be seen from
the following comparison:

Date Cost of food Other expenses Total expenses



July, 1914


100


100


100


July, 1915


128


106


116


July, 1916


146


127


136


February, 1917


158


135


146


July, 1917


166


144


155



A household costing in July, 1914, Kr. 2,000 annu-
ally cost in July, 1915, Kr. 2,320; in July, 1916, Kr.
2,720; in February, 1917, Kr. 2,920; and in July,
1917, Kr. 3,100 annually. The total rise of prices



57



is consequently fiftyfive per cent of all expenses
together. Until May, 1917, the rise in Norway was
77% and in Sweden, 52°/ - Now it is much greater
in all three countries.



At the same time, the prosperity of trade has di- Effects Of
minished greatly, on account of the limited supply Limited
of goods. This applies to all raw materials which are Supplies,
not produced in Denmark, especially to oil and coal.
As a striking example some figures from last year are
given below, showing not only the high prices which
have been paid in England for industrial coal (prime
Newcastle steam coal) whenever it was possible to
get it, but also the enormous heights which the prices
have reached on account of the rising freights in spite
of all regulations:

p. . F. O. B. price per ton Selling price per ton Freights per

at 1,016 kilograms at 1,000 kilograms ton



Jan. 1


Kr. 30.00 Kr. 89.00


Kr. 55.00


April 1


31.00 89.00


145.00


June 1


31.00 212.00


(May) 170.00


July 1


31.60 and 7 3





of 5 °/o chartering com. 255.00 (June) 210.00
October 15 34.15 and l /,

of 5 °/ chartering com. 164.00 (July) 110.00

(October) 110.00

During the period from February to April, 1917,
the import was stopped on account of the blockade,
and sale of stocks took place at the prices paid before
the blockade. The freight rate of Kr. 110 has been
fixed by the Government in connection with a reduc-
tion of the war insurance premiums and is payable



58



in advance at the time of loading, so that the insurance
on freight is to be paid by the charterer.

A British parliamentary White-book gives some
figures of goods imported to Denmark, Norway,
Sweden and Holland in 1917 from other countries
than those of the Central Pov/ers compared with the
corresponding figures from 1911 — 13 (in thousands
of tons):

1911—13 1917

(Average)

Grain, flour etc 9347 1 768

Other articles of food 887 246

Coffee 192 47

Cotton and cotton-goods 167 59

Wool and woollen goods 50 16

Iron and steel 2653 182

Other metals 266 20

Fertilizers 1304 205

Other commodities 1770 546

Total 16.636 3089

Thus as a whole only 18 percent of the normal
imports have reached the said neutral countries.

A stricking picture of the effects of the blockade
on quite neutral countries!!

To fairly describe the present situation it must be
said that many factories and other concerns will even-
tually be compelled to cease operation, not for want
of markets, but for lack of the necessary coal and raw
materials. The railways have had to reduce their sche-
dules to a minimum for want of coal. The population,
in spite of the abundance of money and the willingness
to pay, cannot get absolutely necessary articles. The
necessary fuel is lacking, lighting is limited, and the
country is rationed with regard to important provi-



59



sions such asbread, butter, etc., quite an inconceivable
condition in an agricultural country like Denmark,
living in peace with other countries and only wishing
to continue in peace.

The present conditions may be illustrated by the
following examples:

Before the war the yearly home consumption of
butter was about 20,000,000 kilos, of margarine about
50,000,000 kilos, and of lard about 7,000,000 — in
all about 30 kilos annually per individual. By ratio-
ning, this has been reduced to about 13 kilos per
individual, or onefourth kilos a week.

Previously, the yearly consumption of petroleum
for lighting was 80,000,000 kilos. Last winter the
initial supply was 7,000,000 kilos, with no prospect
of getting more.



Besides, the closing of the factories and other con- Want Of
cerns has caused a degree of unemployment never Employ-
known before in our country. ment.

At the end of January, 1918, this want of employ-
ment reached formerly inconceivable dimensions.
Only a rather insufficient idea of the enormous growth
of unemployment is gained by considering some
figures from the government offices. At the end of
1916, there were 6,612 idle workmen in the whole
country; at the end of November, 1917, the number
had grown to 25,786; at the end of December, 1917,
to 39,355; and on January 18, 1918, to 46,410. At
the end of March, 1918, the number was reduced to
about 40,000. It has since undergone a further
small reduction.



60



While the attitude of the organized labourers,
headed by the old socialistic leaders, has been
very praiseworthy under these trying circumstances,
it was not unexpected that the syndicalists, though
only few in numbers, should try to take advantage
of the situation, both by discrediting the socialistic
trade-unions and by public demonstrations. The
movement resulted in failure, however, partly be-
cause the Government, the Parliament, the local
boards, and all the political parties have always done
their utmost to meet the difficulties caused by the
scarcity of foodstuffs and the want of employment,
and partly because the unreasonable claims on the
part of the syndicalists met with disapproval by the
larger and more reasonable part of the working clas-
ses. The population has looked on with the usual
Danish calm, and the leaders of the syndicalists, who
were said to have conceived the plan of creating a
revolt at the end of January, 1918, for the pur-
pose of „providing for yourself", have had to abandon
any such project, being convinced that such a plan
would not meet with any great sympathy and that
the attempt would prove a total failure. The pro-
claimed revolt resulted in a harmless procession.
Later, on Shrove Monday, a demonstration against
the stock-exchange resulted only in some broken
window panes and the imprisonment of a number
of the rioters.

The Government, Parliament, and local boards
have done everything possible to overcome high pri-
ces by price regulations and supporting measures,
and to reduce unemployment. Shortly after the out-
break of the war, a committee of men from different



trades and from all political parties was appointed
for the purpose of regulating the prices of different
goods and their distribution. This committee has
made a praiseworthy attempt to overcome the scar-
city by the rationing of the necessaries of life. To
meet the scarcity the Government and local boards
have paid enormous sums of money, which have been
procured through a very large increase of taxes,
especially on excess war profits, and in a similar man-
ner the other extraordinary public expenses caused
by the war have partly been covered.

The unemployment is partly relieved by direct Relief Of
money allowances from the state and the municipa- Unem-
lities to the unemployed, and partly by attempts on ployment.
the part of the state, the municipalities, and private
persons to diminish the number of unemployed by
the starting of large works as far as import difficulties
permit. The necessary funds are procured through
banks, which have been officially invited to invest
one-third of their available cash balances in loans for
these purposes.



The blockade from the west, coupled with a similar Commerce
blockade from the south, from Germany, has neces- Between
sarily forced Denmark to embark on the system of Denmark
compensation already described. And

Newspaper men or politicians in Allied countries Germany,
have often drawn attention to the exports from Den-
mark to Germany of Danish goods and products, and
expressed the opinion that Denmark has thereby
given a hidden or unjust preference to the German



62

conduct of war or to Germany on the whole. Nothing
can be more erroneous. It has already been shown
how our export to Germany at the beginning of the
war was partly a mere continuation and a natural
extension of Danish commerce with Germany before
the war, and partly, with the full knowledge of the
Western Powers, a re-exportation of goods coming
to Denmark from the west. The trade with Germany
has by no means diminished our export to the western
countries, especially to England.

In the later stages of the war, Danish exports to
Germany have at all times been guided by the desire
to obtain in exchange certain goods and raw materials
which were absolutely necessary for the prosperity of
the country. Some of these, such as medicines, dye-
stuffs, etc., were obtainable from Germany alone,
others because they were manufactured there only, or
because such articles as coal, petrol, benzine, metal-
ware, and electrical equipment could not be obtained
in sufficient quantities from the western countries, on
account of shipping difficulties, or because the West-
ern Powers, and England in particular, needed the
greater part of what they produced for home con-
sumption.

Compensa- Danish industry had therefore to go to Germany
ting Ex- for such* goods. But Germany, who was also in dire

change Of need of many things, adopted the policy of permitting
Goods, exports of goods to Denmark only in exchange for
other goods of which they were in need. This gave
rise to the compensating exchange of goods with Ger-
many. It is still impossible to give details as to the
working of this system, but as soon as they are at
hand it will surely be seen that the whole system of



63

compensation has been of greater advantage to Den-
mark, and thereby also to the Allied countries, than
to Germany, and that Denmark has not supplied
Germany with goods which could have influenced the
German conduct of the war or its duration. It can
now be said with certainty that Denmark has not
supplied Germany with anything to provoke the de-
struction of war, particularly not with arms, munitions
of war, or materials for the manufacturing of such
articles.

Denmark has met with much annoyance from both
belligerents — not to any advantage during the war,
only to great trouble and inconvenience to the popula-
tion so long as these policies continue. But fortunately
this does not affect Denmark's economic position as
a whole. This can easily be seen by comparing
Denmark's present position with her position before
the war.

In this connection the following statistics are of Compari-
interest: son Of

On March 31, 1914, the deposits in the savings- Denmark's
banks of the country amounted to about 838 million Economic
kroner. On March 31, 1917, this amount had risen to Position In
about 11137 2 million kroner. By the end of 1913 the 1914 And
deposits in the banks of the country amounted to At Present,
about 906 million kroner. By the end of 1916 this
amount had risen to about 2019 million kroner.

The whole of this difference is, however, far from
being war profits. A very large part of it is due to the
sale of live-stock, etc., thus turning them into cash,
which is a consequence of the limited supplies from
abroad, and to the funds released by the closing of
many business and industrial establishments. But the



64



few figures show a proportionate financial strength
which, if Denmark succeeds in her earnest desire to
keep out of the war, will give her great advantage in the
commercial competition when once more the nations
enter such peaceful strife. And this will be true, even if
the war should last for several years, because money will
have no opportunity of leaving the country. The
people may suffer much inconvenience, heavy taxes
may have to be met, capital may change hands, but
the money will stay at home, as we are blockaded
from all sides and shall not be able to buy more than
we have to sell and export. And, though, deprived of
luxuries and rationed as to the necessities of life, we
shall be able to sustain life as we have done up to
now, without — as the only neutral country in Eu-
rope — having any hunger revolts for want of food.

The hope of a bright future is not derived alone
from the actual economic strength. The fertility of
the soil, the old culture both of soil and mind, and
the energy, intelligence, and economy of the people,
promise Denmark a good start in after-war competi-
tion toward a fair share of the progress in store for
the world.

However, it must not be forgotten that Denmark's
production has been seriously curtailed by the block-
ade of foodstuffs from England and America, on
account of which a great part of the producing live-
stock of cattle and pigs had to be slaughtered — to
the great delight of Germany. This unfortunate re-
striction will of course make the progress of Denmark
slower than otherwise and will contribute toward
keeping agricultural products at a high price. But
notwithstanding this fact, it will only be a question



65



of some years more, and even if the great economic
progress all over the world should be slow in coming,
contrary to our expectations, still Denmark will not
decline, but will be able through a series of dull years
to keep her energy and strength alive so as to enter
the general competition with strong and full vigor
as one of the first nations when the progress comes.
The Government, as well as the institutions, banks,
and banking firms through whom money transactions
are generally effected, will be able to meet all obliga-
tions as hitherto, in good and evil years.



In this connection it should be pointed out that Denmark's
the Danish state has always paid its debt to foreign Fulfilment
countries to the last penny, and it is impossible to Of Obliga-
show a single case where this is not so. There were tions To
instances, during the time of absolutism, when the Foreign
State did not fulfil its obligations, but these failures Countries,
hit only inland creditors and date from one hundred
years, most of them from two hundred years, back,
and were always due to the conception prevalent all
over Europe in those days of absolute autocracy —
when the State did not always watch the exact ful-
filment of its obligations towards its subjects — that
the property of the subjects belonged to the King
after all. But at that time Denmark was far from
being the only country that failed to meet her obliga-
tions. Are there many wealthy countries in Europe
where at that time, and even later than in Denmark,
such failures can not be proved? In America the
Louisiana repudiation is not yet forgotten.



66

It must be admitted that there have also been times
in Denmark when the note-issuing banks failed to
meet their obligations to redeem their notes. But the
last of these cases dates more than one hundred years
back and does not affect the ability and will of Den-
mark to fulfil her obligations toward foreign coun-
tries. It is a fact, as stated above, that Denmark has
always paid her debts to foreign countries, and this
applies not only to the Government, but also to banks,
bankers, municipalities, credit-associations, and simi-
lar institutions.
The Future And this should be a good omen of the future to
develop out of the mist and clouds of the war.

But how will this future be? And to what degree
will Denmark's prosperity depend on its character?
Nobody can foretell the future, but this much can
be said: a great deal will depend on the solution of
two great questions, the economic war after the war
and the resumption of specie payments.
Economic Will there be an economic war? To a certain ex-
War, tent, there will undoubtedly. The war has created
such strong animosities that it is out of the question
that subjects and citizens of the different groups should
at once meet again on friendly terms. Both sides will
favour their friends and shun their former foes, and
every endeavour will be made to keep trade within the
borders of old alliances and to avoid trading with former
enemies, and sympathies of this kind will go a long
way to fix the directions of trade.

On the other hand, we must confess from an out-
sider's standpoint that we do not believe in govern-
mental or legislative action for economic war. On
one side it seems beyond doubt that peace, when it



67



comes, will be meant to be a real peace which will
bring the nations together and not keep them apart,
or cultivate the ill-feelings which prevail during the
war. This aim will not be attained if treaties or laws
are made which attempt to prevent peaceful inter-
course. Further, it is an old truth that commerce pro-
fits both parties, and it is not likely that any party
will cut herself or her citizens off from advantages
which might be derived from proper and lawful trade,
only to deprive the citizens of the party of a corre-
sponding benefit.



Be this as it may, it is certain that the situation
will call for neutrals. Both parties will wish to trade
with neutrals, because the trade with the other party
will meet with many difficulties, and after the war
everybody will wish to have somebody to trade with.
Both parties will even call upon the intermediary of
neutrals if trade with the other party is to be taken
up, in order to smooth out the difficulties and incon-
veniences which a direct and immediate intercourse
might bring forth. Placed as she is, on the highway
between the Atlantic and the Baltic, Denmark will
be in a very good position to step in and take her
part of the coming commerce.

And of course Denmark will step in and do her
utmost to turn the greatest possible amount of trade
her way, thus serving both sides and increasing her
own profits. Neither party can object to this, pro-
vided that it is done openly and to the knowledge
of those who sell as well as of those who purchase.
In this respect, Denmark is decided to act with full



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