taste of the consumers and to their peculiar circumstances as to credit. As an example of the extremes to which the question of credit was carried, the Consular Report for 1900 quotes the case of a British firm which obtained a small and insignificant order from the Rumanian government. When it came to the question of terms, the firm insisted upon c.o.d., evidently ignoring the fact that the government disposes of a revenue of some 18,000,000l. Naturally the terms were not agreed to, and the order went elsewhere.' It is perfectly true that trade with a young country involves certain risks. But surely these were alike for Germans and British; and, if the latter have incurred losses in their dealings with Rumania, I would suggest that the Consular Report for 1904 indicates the true cause of such mishaps:

'No commercial travellers for British firms have called at this Consulate-General during the past two years in order to make inquiries. There is no American Consulate at Galatz, but this has not prevented Americans travelling for American firms from coming to the British Consulate-General to make inquiries and ask advice. I have even known German and Austro-Hungarian firms to send their agents to make inquiries at this Consulate-General' (Vol. XCI, p. 676).

Is it, then, to be wondered at that German penetration has been so successful? In one of the most important branches of the Rumanian import trade, that of agricultural implements, the British manufacturers had a monopoly of the market down to 1881. Then considerable quantities of binders, reapers, and other lighter agricultural implements of American make began to be imported; and H.M. Consul is at a loss to explain how, given the extra freight and cost of transhipment, they could command a ready market to the exclusion of British goods. This one fact indicates a general process, as we can see from the following figures giving the percentage of the value of Rumanian imports from Germany, Austria-Hungary, and the United Kingdom:

The last figure has probably been influenced to some

extent by the Balkan troubles, yet the general tendency

is clear enough, and is emphasised by the fact that the imports from Germany consist almost exclusively of manufactured goods, whereas raw materials and halfmanufactured articles form a considerable part of the imports from Great Britain. The proportion is quite altered in the case of exports, as can be seen from the percentages for 1913 given below (if we remember that a large part of the exports to Belgium consists of corn destined ultimately for the United Kingdom) :

:

Exports, 1913

France.

9.47

United AustriaKingdom. Hungary. 6.70 13.53

Germany. Belgium. 7.83 27.14

However striking, these figures do not reveal to its full extent the German hold upon Rumanian trade, since many home manufactures are produced in factories wholly or partially under German control. As a result of the tariff war which broke out between Austria and Rumania in 1886, the industry of Transylvania and Bukovina suffered heavily; when, therefore, the Rumanian government introduced in 1887 a law intended to further the home industry, many manufacturers from these provinces settled or founded branches in Rumania. Thanks to the nature of German banking, the movement has since been a continuous and a growing one; the Austrian and German banks in Rumania have liberally participated in the establishment of industries, many of which were started on their direct initiative. They have thus benefited both German capital and German industry, for the orders for the necessary plant and machinery went, naturally, to German manufacturers. And last, though not least, they have extended German influence in the kingdom on the Danube. Much money was invested in the year 1887 for the manufacture of sugar, previously imported from Austria. While the only factory started with British capital had to close down, the other factories succeeded not only in monopolising the Rumanian market by forming a ring, but also in establishing a considerable export to Bulgaria, Serbia, and Turkey with the assistance of a government export premium. German and Austrian capital and machinery cooperated in the establishment of two ricecleaning mills at Braila in 1905, while in 1907 two German nail factories, a large Austrian saw-mill, and a large

Hungarian flour-mill were erected at Galatz. A process having been discovered whereby cellulose can be obtained from sword-grass and a fibrous yarn from reeds, a number of Austrian and German capitalists bought the patent and obtained from the government the cession for thirty years of more than one million acres of swordgrass and reeds situated in the delta of the Danube and the Dobrudscha.

The firm of Lahmayer & Co., of Frankfurt, created the Société Roumaine d'Entreprises Electriques et Industrielles, which possesses hydro-electrical installations at Sinaia and Câmpina, both in the Prahova valley, and supplies electric light and power to the towns and villages of the region, and to the oil wells of the Steaua Română. The Société Roumaine d'Electricité is a branch of the Allgemeine Elektrizitäts-Gesellschaft, of Berlin, which supplied the necessary machinery, power, and light for the construction of the harbour of Constantza. The well-known German concern, Siemens-Schückert, A.G., also possesses a branch in Rumania; while works established in Bucarest by the Maschinen und WagonbauFabrik, of Simmering (and Brünn-Königsfeld), specialise in the construction of railway engines and trucks. German works or their branches have almost monopolised the supply of rolling stock for the Rumanian railways. The Howaldt works of Kiel secured from the Rumanian government in 1896 the order for two floating docks for the Danube. When, in the following year, the first steps were taken towards the creation of a Rumanian mercantile marine, three boats were ordered in Glasgow and two in Kiel; while a Westphalian colliery obtained a contract for three years for the supply of 180,000 tons of coal annually. In 1903, when an ice-breaker was wanted for the port of Galatz, the order went again to Kiel. These are but isolated instances, which happen to lie at hand; and they could easily be added to.

It will be of interest, however, to devote special attention to the process of German penetration in the oil industry, because that industry is now second in importance to agriculture, and also because it has developed within comparatively recent years. The oil region extends over almost the whole of Rumania, along the

slopes of the Carpathians; it is richest, however, in the Prahova valley, round Câmpina, Bushtenari, and Ploieshti. How rapid the development has been may be gathered from the fact that, while only 275 tons were extracted in 1857, the total production reached 76,600 tons in 1895, 601,700 in 1905, and 1,900,000 tons in 1913, the production of the last-mentioned year having probably suffered through the Balkan conflict. From the outset, German finance participated on a large scale in the development of the oil industry; and its holdings were said to amount in 1905 to 3,682,3007.-mainly supplied by the Deutsche Bank, the Dresdener Bank, the Diskonto-Gesellschaft, and the Schaaffhausenscher Bankverein-whereas French capital was estimated at 260,000l., and that of British investors at 210,000l. One of the most important companies, the Steaua Română, owning a large refinery at Câmpina, belonged to an English company, but was faring badly during 1901-1903; it was then taken over and re-organised by the Deutsche Bank towards the end of 1903, with the result that a dividend of 8 per cent. was paid in 1904. While the Rumanian oil industry, thus rapidly advancing, was attracting attention the world over, British finance so completely lost interest in it that by 1906 it controlled no company of any importance. Equal indifference was displayed by British scientific and official circles; and the United Kingdom was the only important country not to be officially represented in 1907 at the third International Petroleum Congress, which brought together a large gathering in Bucarest. This fact, contrasted with the unabated interest shown by German scientists, will hardly have enhanced the estimation in which the Rumanians hold this country; and such want of interest was the more strange as the United Kingdom was an important, and became soon afterwards the chief, buyer of Rumanian oil. It is gratifying to note that British finance has adopted a saner attitude in the last few years, so that estimates for 1913 show that 30 per cent. of the total capital invested is British as against 37 per cent. German. These percentages hardly represent the precise situation, however, as a considerable amount of the capital classified as Rumanian had its origin probably in the safes of German and Austrian banking institutions in Rumania.

That German holdings are not even more considerable is not due to their own choice. During the crisis of 1899-1900 the Diskonto and Bleichröder endeavoured without success to obtain the cession of about 25,000 acres of rich oil-fields belonging to the state, as well as the right to construct a pipe line from Câmpina to Constantza. The attempt was renewed in 1904 by the Deutsche Bank, taking advantage of the feeling of uneasiness created in Rumania by the appearance of the Standard Oil Company in the shape of a branch concern, the Română-Americană. Public opinion was quickly aroused and expressed itself in the creation in 1905 of a purely national company, the România, for the exploitation of state property, and in the strong opposition which forced the government to abandon its negotiations with the Deutsche Bank. The temper of German finance was not less acrimonious on account of this failure; and in an inspired warning the leading German daily paper, the 'Bukarester Tageblatt' (June 7, 1905), lamented the fate of Rumania if the concession were refused, for the Deutsche Bank will represent the country in the blackest colours, and will make use of the powerful relations which it possesses the world over in order to harm it at every opportunity.' How great an influence German finance can wield may be gathered from the fact that, to obviate the difficulty, the Conservative government, led by M. Cantacuzino, had to refuse the concession asked for by the România; while, to soothe public opinion, a bill was introduced which, though not arresting foreign penetration, limited the possibility of transferring state oil-fields, and enacted that the transport facilities for crude or refined oil, either by rail or pipe, must remain in the hands of the state. Accordingly a contract was entered into in 1912 with an American company for the construction of a treble pipe line to Constantza.

The Deutsche Bank was the founder of the Deutsche Petroleum Produkt, A. G., for the transport and sale of Rumanian oil in the countries where it possesses branches, namely, the United Kingdom, Holland, Denmark, and Switzerland. Under its auspices the Steaua Română acquired grounds at Regensburg, on the Danube, for the establishment on German soil of a refinery for Rumanian oil. Similarly the Regatul Român is a creation of the