Part 13

But the food shark had to be checked somehow. The unrest due to his sharp practices was on the increase. The minimum-maximum price decrees which had been issued were all very well, but so long as there was a chance to speculate and hoard they were to the masses a detriment rather than a benefit.

Let me show you how the food shark operated. The case I quote is Austrian, but I could name hundreds of similar instances in Germany. I have selected this case because I knew the man by sight and attended several sessions of his trial. First I will briefly outline what law he had violated.

To lay low what was known as chain trade throughout Central Europe, Kettenhandel, the governments had decreed that foodstuffs could be distributed only in this manner: The producer could sell to a commission-man, but the commission-man could sell only to the wholesaler, and the wholesaler only to the retailer.

That appears rational enough. But neither commission-man nor wholesaler liked to adhere to the scheme. Despite the law, they would pass the same thing from one to another, and every temporary owner of the article would add a profit, and no small one. To establish the needed control the retailer was to demand from the wholesaler the bill of sale by which the goods had passed into his hands, while the wholesaler could make the commission-man produce documentary evidence showing how much he had paid the producer. Under the scheme a mill, or other establishment where commodities were collected, was a producer.

Mr. B. had bought of the Fiume Rice Mills Company a car-load of best rice, the car-load in Central Europe being generally ten tons. He had brought the rice to Vienna and there was an eager market for it, as may be imagined. But he wanted to make a large profit, and that was impossible if he went about the sale of the rice in the manner prescribed by the government. The wholesaler or retailer to whom he sold might wish to see the bill of sale, and then he was sure to report him to the authorities if the profit were greater than the maximum which the government had provided. To overcome all this he did what many others were doing, and in that manner made on the single car of rice which he sold to a hunger-ridden community the neat little profit of thirty-five hundred crowns.

Something went wrong, however. Mr. B. was arrested and tried on the charge of price-boosting by means of chain trade. When the rice got to Vienna he had sold it to a dummy. The dummy sold it to another dummy, and Mr. B. bought it again from the second dummy. In this manner he secured the necessary figures on the bill of sale and imposed them on the wholesaler. The court was lenient in his case. He was fined five thousand crowns, was given six weeks in jail, and lost his license to trade. Preistreiberei--to wit--price-boosting did not pay in this instance.

After all, that sort of work was extremely crude when compared with some other specimens, though the more refined varieties of piracy needed usually the connivance of some public official, generally a man connected with the railroad management. Many of these officials were poorly paid when the war began and the government could not see its way clear to paying them more. The keen desire of keeping up the shabby gentility that goes with Central European officialdom, and very often actual want, caused these men to fall by the roadside.

There was a little case that affected three hundred cars of wheat flour. Though Hungary and Austria had then no wheat flour to spare for export, the flour was actually exported through Switzerland into Italy, though that country was then at war with the Dual Monarchy! Thirty-two men were arrested, and two of them committed suicide before the law laid hands on them. The odd part of it was that the flour had crossed the Austro-Hungarian border at Marchegg, where the shipment had been examined by the military border police. It had then gone across Austria as a shipment of "cement in bags," had passed as such into Switzerland, and there the agents of the food sharks in Budapest had turned it over to an Italian buyer. Nobody would have been the wiser had it not been that a shipment of some thirty cars was wrecked. Lo and behold, the cement was flour!

They had some similar cases in Germany, though most of them involved chain trading in textiles. The unmerciful application of the law did not deter the profiteer at all, any more than capital punishment has ever succeeded in totally eradicating murder. There was always somebody who would take a chance, and it was the leakage rather than the general scheme of distribution that did all the damage. Whatever necessity and commodity had once passed out of the channel of legitimate business had to stay out of it if those responsible for the deflection were not to come in conflict with the law, and there were always those who were only too glad to buy such stores. The wholesaler received more than the maximum price he could have asked of the retailer, and the consumer was glad to get the merchandise at almost any price so that he could increase his hoard.

But the governments were loth to put the brake on too much of the economic machinery. They depended on that machinery for money to carry on the war, and large numbers of men would be needed to supervise a system of distribution that thwarted the middleman's greed effectively. These men were not available.

The minimum-maximum price scheme had shown itself defective, moreover. In theory this was all very well, but in food regulation it is often a question of: The government proposes and the individual disposes. The minimum price was the limit which any would-be buyer could offer the seller. In the case of the farmer it meant that for a kilogram (2.205 pounds) of potatoes he would get, let us say, five cents. Nobody could offer him less. The maximum price was to protect the consumer, who for the same potatoes was supposed to pay no more than six and one-half cents. The middlemen were to fit into this scheme as best they could. The one and one-half cents had to cover freight charges, operation cost, and profit. The margin was ample in a farm-warehouse-store-kitchen scheme of distribution. But it left nothing for the speculator, being intended to stimulate production and ease the burden which the consumer was bearing. Not the least purpose of the scheme was to keep the money out of the hands of food-dealers, who would hoard their ill-gotten gain. The government needed an active flow of currency.

All of which was well enough so long as the supply of food was not really short. But when it grew short another factor entered the arena. Everybody began to hoard. The quantities which the authorities released for consumption were not intended to be stored, however. Storing food by incompetents is most wasteful, as the massacre of the pigs had shown, and hoarding, moreover, gave more food to the rich than to the poor; so for the time being it could not be encouraged too openly, despite the revenues that came from it.

But the hoarder is hard to defeat. The consumer knew and trusted the retailer, the retailer was on the best of terms with the wholesaler, and the rapacious commission-man knew where to get the goods.

He made the farmer a better offer than the minimum price he usually received. He paid six cents for the kilogram of potatoes, or even seven. Then he sold in a manner which brought the potatoes to the consumer for eleven cents through the "food speak-easy." The middleman and retailer had now cleared four cents on the kilogram, instead of one and one-half cents; their outlay deducted, they would make a net profit running from two and one-half cents to three and one-half cents per 2.205 American pounds of potatoes. This sort of traffic ran into the tens of thousands of tons. The food shark was making hay while the weather was good. The entire range of human alimentation was at his mercy, and often the government closed an eye because the food shark would subscribe handsomely to the next war loan.

In the winter of 1915-16 I made several trips into the country to see how things were getting along. On one occasion I was in Moravia. I had heard rumors that here the food shark had found Paradise. It was a fact. Near a freight-yard in Brünn a potato-dealer was installed. He bought potatoes in any quantity, being in effect merely the agent of the Vienna Bank Ring that was doing a food-commission business as a side line. I don't know why the government permitted this, except that this "concession" was a quid pro quo for war-loan subscriptions.

A little old Czech farmer drove up. He had some thirty bags of potatoes on his sleigh, all well protected by straw and blankets. The food shark looked the load over and offered the minimum price for that grade, which on that day was eighteen hellers the kilogram, about one and three-fourths cents American per pound avoirdupois.

The farmer protested. "My daughter in Vienna tells me that she has to pay thirty-six hellers a kilogram," he said.

"Not according to the maximum price set by the government, which is twenty-one hellers just now," was the bland remark of the agent.

"That is all very well, sir!" returned the farmer. "But you know as well as I do that when my daughter wants potatoes she must pay thirty-six hellers or whatever the retailer wants. She writes me that when she stands in the food-line she never gets anything. So she does business with a man who always has potatoes."

The food shark had no time to lose. Other farmers came.

"Eighteen hellers or nothing," he said.

The farmer thought it over for a while and then sold.

The reader uninitiated in war-food conditions may ask: Why didn't that farmer ship his daughter the potatoes she needed? He couldn't, of course. The economic-zone arrangement prevented him. That zone was the means which the government employed to regulate and restrict distribution and consumption without giving money an opportunity to tarnish in the hands of people who might not subscribe to war loans. The zone "mobilized" the pennies by concentrating them in the banks and making them available en masse for the war.

Yet the fact was that the daughter of the farmer, buying potatoes clandestinely, may have bought the very product of her father's land. Who in that case got the eighteen hellers difference? The middlemen, of course. That the poor woman, in order to feed her children, might have been able to use to good advantage two kilograms at thirty-six hellers, instead of one, is very likely, but this consideration did not bother the food sharks known as the Vienna Bank Ring.

On one occasion the same group of food speculators permitted two million eggs to spoil in a railroad yard at Vienna because the price was not good enough. The Bank Ring was just then agitating for a better price for eggs and hoped that the maximum would be raised. But the government was a little slow on this occasion, and before the price went up, "according to regulation," the eggs were an unpleasant memory to the yard-hands. Naturally, nobody was prosecuted in this case. I understood at the time that the Bank Ring presented to the Austrian government a sort of ultimatum, which read: "No profits, no war loans." The government surrendered.

The fact that many of these speculators were of the Jewish persuasion caused a revival of a rather mild sort of anti-Semitism. Several of the Christian newspapers made much of this, but the government censors soon put an end to that. This was no time for the pot to call the kettle black. The food shark came from all classes, and the Austrian nobility was not poorly represented.

There was the case of the princely house of Schwarzenberg, for instance. The family is not of German blood to any extent, as the name would seem to imply. Nowadays it is distinctly Bohemian, and in Bohemia its vast estates and properties are located. The managers of the Schwarzenbergs had a corner on almost everything that was raised in the localities of the family's domains. In the winter of 1915-16 they forced up, to unheard-of heights, the price of prunes. The prune was a veritable titbit then, and with most people in Central Europe it had come to be the only fruit they could get in the winter. Its nutritive value is great, and since every pfennig and heller had to buy a maximum in food values the demand for prunes soon exceeded greatly the supply--so everybody thought.

But the trouble was not a shortage. The crop had been good, in fact. Orchards, so far as they had not been harmed by the paucity of copper for the manufacture of vitriol and Bordeaux mixture for the extermination of tree parasites, had not suffered by the war. The trees bore as usual, and fruit crops were generally what they had been before. Nor had there been an increase in operation expenses, aside from what little extra pay there was given those who gathered the crop.