I will be the first to admit that my knowledge about the Netherlands during World War One is lacking. Basically, I know that the Netherlands was neutral during the war, but that we weren’t completely unscathed throughout it. Because international trade came to a virtual stop, the economy was hit hard, and especially primary need goods like food and fuel were hard to come by and eventually rationed by the government. During this time, Lodewijk Wesselo was the manager of a jewelry store in Middelburg – close to the Belgian border.
Dutch ration stamps from World War One
With this vague sense of economic trouble in the Netherlands being the total of my knowledge about the situation in my country during this war, consider my surprise when Lodewijk Wesselo wrote in a brief autobiographical sketch in 1947 that the business in Middelburg became very successful, in part thanks to the First World War. A jewelry business, luxury items in other words, doing very well because of a war that impacted the economy negatively? Was my vague knowledge wrong? What was going on here?
The first thing I did was ask for an explanation to this puzzle on a forum dedicated to the First World War1. The very first reaction – that Belgian refugees were selling their jewelry – made sense, but wouldn’t cause a profit. At least, not until after the war when the economy was recovered and Lodewijk could sell the pieces with profit. But then someone suggested that in difficult times people invested in “solid” goods – like gold and silver – and that might be why the jewelry business was doing well. It sounded like a very plausible explanation.
Also through this forum, I was pointed to a book about the Netherlands during World War One that was (partially) on-line available through Google Books2. This book didn’t hold the answers I was looking for, but it did point me towards a thesis work about the economic development of the Netherlands, 1913-1921 by Ronald van der Bie3.
This work finally gave me the complete picture. Yes, the economy was in trouble during this period – but several sectors including trade performed better than expected. Several sectors within the trade sector even had extremely high profits – the trade in gold and silver being one of them. The Dutch government intervened very early in the First World War and took control of a lot of things related directly or indirectly to the economy. All of these rules prevented large scale unemployment and kept the buying power of the population intact. In fact, the Netherlands was one of the best performing economies in Europe during this time period. Another factor which helped companies to make larger than average profits within the European trade theatre were the relatively low wages in the Netherlands. And because of the neutrality of the Netherlands and the government’s timely intervention in the economy during the war, the Dutch companies had a very good starting position when international trade started back up after the war.
All of these factors combined – including the urge of people to buy gold and silver in uncertain times – would have indeed contributed to the success of Lodewijk’s jewelry story in Middelburg. So he was completely correct in writing that – I just needed a bit more insight into that time period to understand it.
1. Forum Eerste Wereldoorlog, thread “Juwelierszaak profiteert van Eerste Wereldoorlog?”, readable here.
2. “Leven naast de catastrofe: Nederland tijdens de Eerste Wereldoorlog” by Johannes Martinus Wouter Binneveld, readable here.
3. “Een doorlopende groote roes”, De economische ontwikkeling van Nederland 1913/1921 by Ronald van der Bie, VU University Thesis, Tinbergen Institute Research Series, 1995.
Picture source: picture came from this site.