Fear crossed the Pyrenees in one leap. On Monday, August 3, 1914, while German troops invade Belgium and are deployed to fight the Russians, hundreds of Spaniards go to their banks to convert their banknotes into silver. The financial alarm continued for days.
On Friday, August 7, the Government declares the first of the 27 neutralities that it will announce during the conflict and ends speculation that Spain has a secret obligation to fight alongside France or England. The banking panic is fading, although in a single week it has cost the Bank of Spain 60 million pesetas. Spain will not enter the greatest war that had been known until then, but the war has already entered the country.
With the effort represented by the Moroccan war and the recent memory of the Disaster of ’98, aware of the country’s weakness, the conservative and liberal governments that succeeded one another during the conflict avoided entering the Great War, but failed miserably in trying to prevent it from entering. This does not affect the weakest of the population.
The export of iron and steel quickly skyrocketed, while both sides stopped importing citrus fruits and luxury items. Almost immediately, speculators hoard basic products such as wheat or corn, whose prices begin an escalation that will last the entire war. The immediate consequence is an increase in unemployment. Day laborers and construction workers are the first affected.
While on the street the conflict begins to divide Spaniards into too many losers and few winners, the sectors that dominate society split into two opposing groups: allies and Germanophiles.
Allies and Germanophiles not only hope for a decisive victory for their side, but also for Spain to participate in the war to benefit from it. At the end of 1915, the initial uncertainty will have given way to the happiest years of Spanish businessmen.
Trench warfare devours men and weapons at an increasing rate. Steel is needed for cannons, wheat and rice to feed the soldiers, fabric for their uniforms… Spain becomes a market where agents from both sides compete to hunt for raw materials that they send to their countries legally or smuggled.
Entrepreneurs not only benefit from the demand of contenders. They also see how foreign competition suddenly disappears, focused on meeting the needs of their respective countries. Mining is one of the first sectors to notice this. In 1914, Spain consumed seven million tons of coal, but only five, the worst quality, came from Spanish mines. With the outbreak of war, Great Britain and Germany need all their coal and begin to demand Spanish coal as well.
It is not the only highway to wealth. The textile companies of Barcelona, ??Sabadell and Igualada did not stop manufacturing uniforms, blankets and boots for the French army throughout the conflict. To satisfy orders, which also come from more distant places, such as Italy and Serbia, they work day and night. Labor is cheap and abundant; Poor quality controls. As soldiers will discover, uniforms are not made to last.
The war also allowed the development of the chemical, pharmaceutical and mechanical industries, and the Basque metallurgical industry, which, according to historian Jaume Vicens Vives, “saw its turnover multiply fourteen-fold.”
The rapidly accumulated capital in all these sectors drives the development of Spanish banking. From the 47 entities in 1916 it increased to 91 in 1920, including two new giants: Urquijo (1918) and Central (1919). But in no sector are the profits as spectacular as in the naval sector.
Between 1917 and 1919 alone, 60% of the dividends distributed by companies listed on the Bilbao Stock Exchange came from shipping companies. It is not a risk-free business, but it is relatively safe until the summer of 1916. In September of that year, German submarines begin to torpedo Spanish merchant ships. From the eight sunk during the first two years of war, the number rose to 31 in April 1917 and 65 in February 1918.
Ramón de la Sota, from Naviera Sota y Aznar, lost almost twenty during the conflict. In gratitude, George V will grant him the title of sir when the war ends. “Germany not only torpedoed our merchant navy,” Romanones writes in his Notes on a Life, “but also put all its efforts into torpedoing me.” And he did it while he tried not to sink the ships of one of his allies, Juan March.
In 1915 Juan March is becoming one of the richest men in Spain. The French complaints reached the British Admiralty, which asked March’s second for explanations. Blatantly, Antoni Maria Ques, “Torró”, denies that a German submarine supply base exists in Mallorca with a cynical argument: if such a base existed, he would know it. When the British insist, March’s organization blames another smuggler, eliminating a competitor.
If the Great War is a once-in-a-lifetime opportunity for speculators, no one takes advantage of it better than March. The banker and businessman has an official fleet, which has the state concession to connect the Balearic Islands with the peninsula, Algiers and Marseille, and fifty sailboats and steamers registered in Gibraltar with which he is dedicated to smuggling and which until the end of the war supply the German and Austrian submarines with the fuel and lubricants that they officially acquire for their shipping company.
When new March ships are caught in the middle of refueling, the British begin to retain their sailboats under administrative pretexts. On the seventh, March understands the move and begins to collaborate with the allies, pretending that he is leaving the Germans.
While hunger spreads among the population of the islands, their ships take out all the supplies they can. Freshly harvested, the wheat goes directly from the field to the beaches, heading to France. In Valencia and Alicante, March ships load rice and flour for the port of Palma, but divert mid-route to sell their precious cargo in European ports.
At the beginning of 1918, March understood that the food crisis on the islands could lead to a social revolt that would negatively affect him, so he tried to win over the working-class societies by paying for the construction of the People’s House. It is his “safe conduct” when the riots break out in February.
Then, the man who has amassed his fortune thanks to the hunger of the population of the Balearic Islands dares to say that “everything that has been said about me regarding subsistence is completely false.” In his defense, “the last pirate of the Mediterranean” could have said that he alone did much better than what hundreds of speculators did throughout Spain almost with total impunity.
The reality of millions of Spaniards at the end of 1916 is painful. The rise in prices begins as soon as the war breaks out, when speculators hoard the most basic foodstuffs. It is so evident that in September 1914 the government commissioned former minister Juan de la Cierva to direct a national board to face the crisis.
In February 1915, unable to resolve the problem, De la Cierva resigned. The Provincial Subsistence Boards are then created. Made up of the civil governor, the mayor of the provincial capital and a Treasury delegate, they also fail. “This could hardly be surprising,” explains Francisco J. Romero, “given that those who benefited were most of the time the same notables and local chiefs to whom the political class owed its votes.”
When they are not in short supply, basic foods reach prohibitive prices. More than a hundred decrees and laws followed one another without success until 1919. Meanwhile, hunger riots spread throughout the country. They are spontaneous protests, almost always led by women, which are consumed by looting stores or warehouses of food or coal.
In November 1916, a Central Subsistence Board was established again, with the businessman and Marquis Ramón de la Sota at its head. As published after its creation, “it is, in general, a Board of very worthy people, many of them interested in ensuring that prices do not drop.” It works so poorly that the government suppresses it in May 1917.
For hundreds of thousands of Spaniards there is no other option than emigration. Many leave the countryside to go to the cities in search of work in factories. Others leave the country. France, which expelled thousands of Spaniards in the first days of the war, now urgently needs them.
The Institute of Social Reforms estimates the number of Spaniards who officially emigrated to the French country during the conflagration at 125,825, although it admits that the figure could double if illegal emigration is counted. Almost 70% come from the Spanish Levant. The Institute recognizes that many are victims of authentic mafias. They are kept in guest houses in the north until their resources run out and then, for what little they have left, they are offered to transfer them to France, to which they agree, tired of waiting.
Some, those who have the worst luck, end up building trenches on the front or even enlisting in the French army. They are the big losers of the war.
This text is part of an article published in number 571 of the magazine Historia y Vida. Do you have something to contribute? Write to us at redaccionhyv@historiayvida.com.
