Volume IV.

In addition to the transatlantic fleet there was an American cross-channel fleet carrying men and cargo from England to France. This fleet consisted of more than a third of a million tons by the end of 1918. One-fourth of these vessels were Swedish or Norwegian, while the rest were American. This fleet comprised large numbers of small wood and steel vessels built by the Emergency Fleet Corporation at the yards of the Great Lakes and along the coast.

ACCELERATED SHIPPING

The Emergency Fleet Corporation turned over nearly a million tons of new ships for military purposes, and besides Scandinavian and Japanese tonnage was chartered. By doing this and by taking over lake steamers the large tonnage figures were secured, but it must be remembered that the Allies were largely concerned in the American troop movement. Of every 100 men who went over, 49 went in British ships, 45 in American, three in Italian, two in French and one in Russian shipping under British control. Moreover, a way was found to increase the loading of transports by as much as 50 per cent.

The duration of the voyage round trip was considerably decreased. In the spring of 1917 the average turn around for troop ships was 52 days. Some of the fast ships averaged under 30. The _Leviathan_, for example, landed the equivalent of a German division in France each month. Most of the cargo ships were American and these ships carried thousands of articles of the most varied sort. Nearly one-half of all the cargoes consisted of food and clothing. Then came the engineering and ordnance supplies. A large number of locomotives were shipped, set up on their own wheels so that they could be unloaded on the tracks in France and run off in a few hours under their own steam. These locomotives were of the hundred-ton type. Shipments of this type had never been made before. When the armistice was signed the Army was prepared to ship these set-up locomotives at the rate of 200 a month. The actual record shows that 1,791 were sent to France on transports.

Nearly 27,000 standard-gauge freight cars were shipped abroad, and motor trucks to the number of 47,000; rails and fittings were sent to France aggregating in all 423,000 tons. Moreover, the Army shipped nearly 70,000 horses and mules. The increase in the shipping of cargo from the United States was consistently maintained from the start of the war, and at its cessation it was undergoing marked acceleration.

BRITISH SHIP-BUILDING

Ship-building in England was taken over by the government early in the war. This plan was described by many as an example of a blundering surrender to Socialism and a concession to bureaucratic tendencies. These critics pointed to the fact that in 1914 British shipping tonnage had reached the figure of 19 million tons, an increase of over 10 millions in 15 years; and this was done in spite of subsidized competition from abroad and lack of reasonable encouragement at home. The policy of government interference was regarded as simply a method of discouraging English initiative in this industry. A writer in the London _Outlook_, Mr. E. T. Good, described the project in a most unfavorable light:

"On top of foreign subsidized competition our people are to be subjected to Government competition at home, and their whole position and prospects rendered uncertain, if not impossible. This new government undertaking can have nothing but a chilling, blighting effect upon our splendid ship-building and engineering trades, and it will not give us one additional ton of shipping. The government policy--or lack of policy--is such that no one knows what to expect next. There is no certainty. There is no continuity of policy. There is no encouragement. There is no common justice for British enterprise. Whilst Germany, France, Italy and other nations are preparing large subsidization schemes for their shipping and ship-building trades, our government excessively penalizes our industries and enterprises, and gives no hint of any fair dealing in the future. Before the war German subsidized liners were permitted to come into our harbors and take on board British passengers at 'blackleg' rates, and without paying even a due share for the upkeep of our ports and lights. Now our government, whilst paying neutral shipowners--our future rivals--freights up to as much as 500 per cent. above the Bluebook rates paid to our own vessels, is taxing our shipping people up to the eyes--doing all that it can to render it difficult, if not impossible, for our companies to increase their fleets and maintain British supremacy after the war."

It must be remembered that Great Britain's shipping problem was a matter of extreme complexity. There were first of all the submarine sinkings. There was the lack of labour for ship-building. There was, besides, the fact that the tonnage available for ordinary imports was considerably lessened by the commandeering of merchant ships for the carriage of government material. The following statement of the problem was presented by the British Premier himself in August, 1917:

"In addition to this, the Shipping Controller has taken steps for the quickening of ship-building. The tonnage built in this country during peace times is, I think, on an average something a little under 2,000,000. In 1915 the ship-building came to 688,000 tons. In 1916 it was 538,000 tons. In this year a little over a million tons, nearly 1,100,000 tons, will be built in this country and 330,000 tons will be acquired abroad, so that this year the tonnage which we shall acquire will be 1,900,000. This is purely mercantile marine. Bear in mind the condition under which the tonnage is built. It is the fourth year of the war. There is a difficulty in labor and great difficulty in material. You require steel for guns and shells for the Navy, because the ship-building program of the Navy has gone up considerably in the course of the present year. In spite of that fact the ship-building of the country in this year will not be very far from what it was in the days of peace.

"Even now we have not got enough tonnage for all essential purposes. We have got to provide tonnage for France, Italy and Russia, as well as for ourselves, and we need more ships instead of fewer ships. And I am not going to pretend that there will not be at best a rate of diminution of our shipping which will embarrass us in the struggle, and therefore it is essential, not merely that this country should build, but that the only other countries which have a great ship-building capacity should also build. If the United States of America puts forth the whole of her capacity, and I have no doubt, from what I hear, that she is preparing to do it in her own thorough and enterprising way, I have no doubt at all that we shall have sufficient tonnage not merely for this year but for the whole of 1918 and, if necessary, for 1919 as well, because America can expand very considerably her ship-building capacity if the real need ever arises for her to do so."

BRITISH BUREAUCRATIC METHODS

On the whole it must be allowed that after the results were published there was a great disappointment, particularly as the government had put forth roseate plans for ship-building on a large scale. At the beginning of the war there were 16 million tons gross of steamers of more than 600 tons each. A large part of this total was used in the service of the Navy; and the balance, available for the carriage of food, materials and exports, was lost during the submarine campaign. The government seemed to show no ability to replace it. Sometimes it is contended that the responsibility was to be charged up to the labor organizations. According to the _Economist_ the situation was due to bureaucratic methods of control.

In a debate in Parliament the whole subject was ventilated:

"From every quarter members with first-hand knowledge of ship-building got up to tell the same story of over-centralization, fussy control, conflicting orders, leading all to the same result--discouragement of masters and men. Mr. Mackinder, speaking for a Glasgow constituency, and Sir Walter Runciman, speaking as a ship-owner--two men whose views on economics are the poles apart--were in agreement here. The fault, they declared, lay, not in the want of patriotism or the inherent vice of the British workman, or even in the lethargy of the British employer, but in the third and predominant member of the ship-building partnership, the British Government. Keeping the direction in its own hands, the Government started with a preconceived theory of the standard ship--a theory that might be of great value to a builder of revolutionary ideas laying the foundations of a prosperity to be enjoyed twenty years hence, but is of considerably less value to a nation that is losing steamers at the rate of fifteen or twenty a week, and wants new steamers now. When the standard ship was first proposed, builders pointed out that in practice each had a standard ship of his own, and they could build most quickly by confining themselves to their own familiar types. Mr. Macnamara told them that they were Solomons, wise after the event, but that is less than fair. They were wise from the beginning, and their predictions have come true."

TRADE POLICY AS A WAR WEAPON

The building of ships under Government supervision and control was only one side of Allied war shipping administration. Seaborne trade was rigidly directed as a potent arm in bringing Germany's war power to ruin. The industrial and economic effect of the marine blockade was fully conceded by a number of German and Austrian newspapers.

_The Frankfurter Zeitung_ said:

"If the final peace does not return to us what our enemies have taken and destroyed in the outside world, if it does not restore to us freedom in our work and our spirit of enterprise in the world, then the German people is crippled for an immeasurable period. We demand restoration for all violation of the law and for all acts of destruction. We demand indemnification for all damages done, and we meet the plan of differentiation with the demand for the most-favored-nation treatment and equal rights; the plan of exclusion with the demand for the open door and free seas; and the threat of a blockade of raw materials with the demand for the delivery of raw materials."

A true picture of the situation is given in the following passage from the Vienna _Arbeiter Zeitung_:

"Even if Hindenburg's genius and German bravery won a complete victory on land, even if the English Army fell into our hands to the last man, and France was disarmed and had to submit to Germany's terms, even then England and America could not be compelled to the capitulation that the Pan-German word-heroes prophesy daily. Even then they would blockade our coasts and the war would continue at sea. And even if they could not or would not do that, even if peace was concluded and all the battles ended, they would still have a terrible weapon to use against us. Our domestic economy can not exist permanently without the wheat, the copper, and the cotton from America, the nickel from Canada, the cotton from Egypt and India, the phosphates from the North African coasts, the rubber from the English tropical colonies, Indian jute, and the oilplants of the South Sea Islands.

"There will be a scarcity of all these things after the war and there will be great competition for them. If England and America do not deliver to us these raw materials after the war, then we as conquerors are conquered."

GERMANY'S POTASH BOYCOTT

Before we entered the war Germany viewed with great concern the effect of the economic weight of the United States if added to the side of her antagonists. She felt that if this country remained neutral she could depend on us for raw materials. To be sure, German ingenuity had produced ten thousand substitutes, due to the skill of German chemists, ranging from bacteria fats to synthetic rubber. But even the War Office in Berlin was under no illusion on this point. "We need copper and no stripping of palace roofs, no raiding of door knockers or kitchen pans can make up for the deficiency." Even the vision of economic self-sufficiency in Central Europe had rifts in it. Raw material was so important that, in the boot and shoe industry 1,400 factories in the German Empire were amalgamated into 300. In the silk industry the spools were reduced from 45,000 to 2,500. Out of 1,700 spinning and weaving mills, only 70 were running at high pressure.

The plan, as outlined by German experts, to force the United States to supply raw material was to cut off potash exports and certain manufactured goods. "If America will sell us no cotton," was the threat of the Berlin _Deutsche-Zeitung_, "she shall get no potash--the indispensable fertilizer in which we have a world monopoly. If she withholds her oil and grain, then she shall get no _dyes_, no drugs, no glassware or optical instruments." But as a writer in the London _Outlook_ stated, this threat could not be made an effective instrument of trade control:

"There is potash in plenty in the great Republic, especially in the alkali lakes of Nebraska and Southern California. Potash is now obtained from the Great Salt Lake in Utah, and from the vast kelp beds of the Pacific coast. American chemists are also extracting potash (by the Cottrell process) from the dust of cement-kilns and blast-furnaces. So the German monopoly will pass, and many others with it. America will produce her own dyes and optical instruments, though I may not linger on the details of this supplanting.

"American genius has long been busy with these things; another year or two will see her wholly independent of German supplies. The potash monopoly--from the mines of Stassfurt in Saxony--was undeniably a problem; there are still richer sources in Alsace, as we all know Germany's resolve to hold that province through thick and thin. America needs 500,000 tons of potash every year, for the sandy soils of the Atlantic seaboard, and also for the citrus fruits of Florida, the tobacco of Georgia and the Carolinas, the potatoes and garden produce of Maryland."

SHUTTING OFF GERMAN TRADE

Pessimistic anticipations of German statesmen regarding the curtailing of German trade were realized when the War Trade Board in the United States began to deal with the question of American exports to neutrals. The report of the Board, published in 1918, contains the following passage:

"Neutral exports of foodstuffs to the Central Powers have declined from last year's corresponding exports in amounts estimated at from 65 to 85 per cent., depending on the neutral, and there has been a decrease in the export of many other important commodities.

"In November, 1917, we became party to Great Britain's tentative agreement with Norway, as a result of which action on our part 1,400,000 tons dead-weight of Norwegian shipping were chartered into the service of the United States and Great Britain for the period of the war. Shortly following, temporary agreements were concluded with Holland and with Sweden. That with Holland gives us the use, for periods up to 90 days, of 450,000 tons dead-weight of her shipping which had heretofore, for a long period, lain idle. The agreement with Sweden gives us the use for three months of tonnage estimated at 250,000 tons dead-weight which had not theretofore been employed in services useful to us.

"Specific accomplishments of this character are, however, far from constituting a full measure of the results achieved by the War Trade Board. The elimination of enemy advantage from our trade and, to a considerable extent, from that of the world, the securing and conserving of commodities essential to ourselves and those associated with us in the war, the bringing of shipping generally into the services most useful to us--these results can not be accurately stated or appraised at the present time, nor have they been accomplished by any single act or agreement."

THE TRADE LICENSE SYSTEM

The United States trade license system was extremely effective in cutting off the business of firms whose controlling motive was the advancement of German commercial interests. It was largely directed against preventing pro-German firms in neutral countries from engaging in the re-exportation process, a familiar practice in the earlier part of the war. The policy of the War Trade Board is indicated in the March (1918) issue of the _War Trade Journal_:

"To accomplish these results the War Trade Board, through its Bureau of Imports, has adopted certain regulations in connection with the importation of many of these raw materials, to which it is the duty of every patriotic American citizen to give complete and wholehearted support.

"Organizations have been voluntarily created in many of the trades, such as rubber, wool, jute, tin, etc., to act as consignees when required and to perform other duties in connection with importations, under and by direction of the War Trade Board.

"Every effort will be made to administer these regulations with the slightest possible detriment to legitimate business interests, but when it is considered that the transmittal of a few pounds of rubber or copper to Germany may cost the lives of scores of our men at the front, and that each day's supply of wool, or food, or money to the enemy means another day's war, with its accompanying toll of lives, the very thought of hesitancy or weakness is inconceivable. The policy will be 'safety first' for our soldiers, regardless of every other consideration. Persons and firms in this country, as well as abroad, who before our entrance into the war had little sympathy with the war-time commercial safeguards of the Allies must be taught that these are now matters of the first importance to this country, and violators of present restrictions need expect no favors, regardless of how important such individuals or firms may be in the business world. The time has come when all must realize that the war is not limited to combating the enemy on the battle fields of France, but must be carried into our every-day transactions of life, and that our business practices must be remolded, where necessary, to meet existing conditions.

"It is unnecessary to mention other desirable results which may be obtained by this import control, such as the gathering of trade information or the conservation of tonnage by elimination of non-essentials.

"No anxiety need be felt by importers that there will be any serious restrictions of the importation of necessary articles if the transaction does not involve dealing with an enemy or ally of an enemy, or otherwise giving him aid or comfort."

THE ANTI-GERMAN TOY EPISODE

An example of the intense popular indignation against encouraging trade with Germany was furnished when a Dutch boat arrived in New York in 1918, laden with 400 cases of toys made in Germany. The ship that carried them had been guaranteed against submarines by the German Government. Its arrival in America brought about a storm of indignation strong enough to remind many editors of the famous Boston Tea-Party. One of the consignees of the cargo refused to accept delivery of his share; the _Manufacturers Record_ of Baltimore offered him its congratulations:

"It is none too soon to begin the campaign against the importation of German-made goods. Imagine for one moment any American mother giving to her baby toys made by Germany while she thinks of tens of thousands of babies murdered by Germany in this war. Every toy made in Germany and every other piece of goods of every kind will for generations bear a bloody stain which all the waters of all the oceans can never wash out."

Patriotic organizations passed resolutions on the subject. American feeling as to German merchandise was well shown through the publication of an editorial in the _Hardware Age_ against American use of German toys. The paper received 4,000 letters on the subject and over 250,000 reprints of the editorial were sent out, all on request. On the subject of German toys, it said, among other things:

"America has fed starving Belgium. We fed and clothed and cared for her suffering people long before we became her proud ally on the battlefields. Thousands of orphaned Belgian and French children have been adopted into American homes. In the days to come are we going to force these children to play with German-made toys? God forbid! American toy manufacturers have stripped us of the last vestige of an excuse for the purchase of toys from the Huns. Our factories are making more toys than we ever imported, and they are not the flimsy jim-cracks we formerly bought from abroad. They are largely exercise toys which develop a child's body, or mechanical or structural toys which train the mind. Before the war we imported eight million dollars' worth of toys from the Central Powers. Who will make our kiddies' toys in the days to come? Once more, Mr. Buyer, it's up to you."

SMUGGLING FROM NEUTRAL COUNTRIES

Considerable aid was afforded to Germany by her trade with neutral countries. First, there was a good deal of direct re-exportation of materials imported from abroad. Then there was an exportation of domestic products, and the filling up of this deficit by importation from abroad, mainly from the United States. Mr. J. L. Moore of Harvard University, thought that smuggling deserved to be added to the source of German supply from the outside, and he mentioned the fact that a member of the Commerce Department of the Swiss Government was convicted of this offense and served a prison sentence. His exposition of how neutrals aided Germany is given in the following passage from the New York _Times_:

"To direct and indirect re-exportation must be added, finally, smuggling, which has always been a factor in the evasion of blockades. In Switzerland a member of the Commerce Department of the government was recently convicted of this offense and is serving a prison sentence.

"That this aid was precious to the Central Powers and enabled them to stave off starvation and consequent submission can be corroborated in various ways. First, in spite of the enormous volume of imports from the neutrals Germany was on the verge of starvation during the last winter, the economic crisis reaching its critical stage coincidentally with the political crisis in the Reichstag at the beginning of July. The most potent cause of this political upheaval was the economic destitution which cast its melancholy shadow over the whole nation and increased the desperation of people and Reichstag till it exploded in a violent outburst of wrath against the government. Secondly, the general impression of press and people in Germany and Switzerland is that the most sensational part of the speech of Erzberger, which brought the crisis into being, consisted of an exposé proving the futility of the submarine policy and impugning the judgment of the officials responsible for its inauguration, inasmuch as the entrance of the United States into the list of Germany's enemies, which resulted therefrom, was likely to result in a curtailment of the imports obtained through the neutrals, and without a continuance of these imports Germany could not hold out long."

SURPRISING INCREASE OF NEUTRAL SHIPPING

The shutting off of the German commercial fleet from trade and the employment of Allied shipping under government contract offered an exceptional opportunity to small neutral countries to advance their shipping business. This opportunity was eagerly seized. Norway reported the establishment in 1915 of no fewer than 488 shipping firms. This was followed in 1916 by an increase of 459. Some of these Norwegian firms paid dividends as high as 400 per cent. Statistics from Sweden also show a significant expansion. Swedish firms of inconsiderable capitalization before the war became important companies, able to undertake transatlantic trade on a large scale. It seems likely that these Swedish transatlantic lines will constitute a formidable competitor to the old established German companies--now that the war is over.

Corroborative evidence on the shipping situation in neutral powers is found in the following passage taken from the New York _Journal of Commerce_:

"Of great importance for an estimate of the future of our shipping combines is the progress which the two largest Danish lines--the Forenede, which sails to North America; and the Estasiatisk Kompagni, which, as the name suggests, runs lines to East Asia--have made during the war. The Forenede, for instance, made in 1916, with a stock capital of 30,000,000 crowns, a net profit of no less than 40,000,000 crowns, of which a good 10,500,000 crowns was allotted to the reserve and emergency funds. The collective reserves of this company amounted to more than 26,000,000 crowns at the end of 1916: and its bank credits totaled 44,000,000 crowns.

"The large Dutch shipping firms have likewise made enormous profits. The following table presents their results for 1916 (the Dutch florin, or guilder, is worth $0.402 United States currency at normal exchange):

Reserve and Stock Net Emergency Shipping Firm Capital, Profits, Funds, Florins Florins Florins

Holland-Amer. Line 12,000,000 26,500,000 10,200,000 Stoomvaart Mij. Nederland 19,000,000 18,600,000 8,800,000 Kon. Nederl. Stoomboot Mij 15,050,000 19,000,000 7,800,000 Rotterdamsche Lloyd 15,000,000 15,100,000 12,600,000 Kon. Holland Lloyd 10,000,000 10,900,000 2,000,000

"The example of the Holland-America Line shows best what enormous progress took place in the inner consolidation of the Dutch firms. The reserve of this company, which in 1913 amounted to 6,600,000 florins, grew to 24,800,000 by the end of 1916--in other words, the previous stock capital (which in the meantime had been increased by 15,000,000 florins) by more than double. In addition, the company has available funds amounting in all to 21,700,000 florins. The reserves in the Nederland Company, which have increased in the same period from 6,700,000 to 23,000,000 florins, exceed the capital by 4,000,000 florins. The available funds of the Rotterdamsche Lloyd amounted at the end of 1916 to about 25,000,000 florins, with a share capital of 15,000,000 florins and a ready reserve of 16,000,000 florins.

"But the business successes of the neutral European shipping firms are far surpassed by the earnings of the Japanese overseas lines. Thus the largest Japanese shipping firm, Nippon Yusen Kaisha, that sails from East Asia to all the important shipping markets, had a net profit in the summer half-year 1916 of 19,780,000 yen (the Japanese yen is equivalent to $0.498 United States currency); in the winter half-year 1916--17 actually 22,150,000; in a single fiscal year it earned, therefore, about 42,000,000 yen. The company's capital stock amounted at the end of the fiscal year 1916--17, after a previous increase through the distribution of free shares, to 27,500,000 yen, the net profits of this single company being thus about 15,000,000 yen more than the amount of the capital.

"The company's fleet has grown considerably. The total available reserves amount to nearly 63,000,000 yen. Of ready money the company had at its disposal at the end of March, 1917, 55,300,000 yen."

GERMANS AT WORK IN SPAIN

Germany's astuteness in dealing with neutral countries was especially marked in Spain. The country was filled with German propaganda and there were skeleton German trade organizations ready to begin functioning at a moment's notice. The extent to which this propaganda was carried on was described by a correspondent of the _Saturday Evening Post_, Mr. I. F. Marcosson, in an address to the National Machine Tool Builders' Association at Atlantic City:

"The German propagandists have carried on a campaign on the proposition of the Kaiser. It has been the finest selling campaign that I have ever seen. They have organized it. Each man had his territory, his selling territory; each man has his line of samples, and that line of samples was the finest lot of German gold and German 'hot air' that any propaganda has ever produced.

"The Germans have sold Spain on the proposition of German trade and German good-will, because they are giving the Spaniard, as they did in business before the war, what the Spaniard had in mind.

"Germany went into Spain to fill the Spaniard with 'hot air' and to tell him he was the finest aristocrat in the world. And he got it over. And if you had gone, as I have, from one end of Spain to the other and looked into these great warehouses you would have found hundreds of them jammed and packed with copper and oil and cotton, and all the material with which to re-establish a great industry. And today, whenever there is a water-right for sale, whenever there is stock for sale, or whenever anything can be leased, or a factory can be bought, who buys it? =The Germans.=

"They have got the finest industrial secret service in Spain that I have seen in my life. And to what end? All to the great end that when the war is over, in Spain as in Holland and in Switzerland, the wheels of German output will be going.... Germany will put on the goods, as I have seen with my own eyes, 'Made in Spain,' 'Made in Switzerland,' and 'Made in Holland.' Your own goods, machine tools, are going out in the markets of the world now and forevermore in competition with German-made stuff, made by German hands, made by German capital, part with stuff that is marked offensive, in competition with stuff that is marked as I have said it would be marked."

NO ECONOMIC BOYCOTT AFTER THE WAR

The official leaders of the Allied Governments soon found that the scheme to start an economic war after peace had been negotiated had no very strong support. President Wilson took a hand in subjecting the Paris resolutions advocating this economic war to unfavorable criticism. The British Trades Union by a large majority showed their disapproval of them. The London _Economist_ also disapproved of the program of a vindictive trade policy after the war, though it thought that an economic boycott might be used as a threat to force Germany to make peace. Lord Robert Cecil took the ground that it would not be wise to attempt an economic war. The labor point of view was that an economic war was bound to produce another outbreak of militarism. The Speaker of the British House of Commons, who always occupies a non-partisan position, in an address at Carlisle on war aims, showed no sympathy with the proposal:

"We had heard of war after the war, and it had been suggested that whatever the terms of peace might be we in England should have no dealings with Germany, that we should boycott them commercially, allow none of our raw materials to go to Germany, that we should form a combination with our Allies, and that together we should cut her off altogether and treat her as though she were a leper. He did not believe in this idea. He was out for peace, and when he said he wanted peace he meant a lasting peace. He wanted peace founded on sound conditions, which would stand wear and tear and last forever, if possible--at all events, for many, many years, it might be centuries; but a boycott of Germany would not be the way to attain a peace of that kind. That would be a way of carrying on the war, and although it would not be with the weapons we were now using, there would be the same hatred and struggle between one combination of nations and another, and it would leave the world divided and engender seeds of hatred and dissent. In many respects it would be almost as bad as the war at the present time. He did not, therefore, accept that condition of things."

In explaining England's position as to war aims the Premier, Lloyd George, made the following observations:

"Germany has occupied a great position in the world. It is not our wish or intention to question or destroy that position for the future, but rather to turn her aside from hopes and schemes of military domination and to see her devote all her strength to the great beneficent tasks of the world.... The economic conditions at the end of the war will be in the highest degree difficult. Owing to the diversion of human effort to warlike pursuits, there must follow a world shortage of raw materials, which will increase the longer the war lasts; and it is inevitable that those countries which have control of the raw materials will desire to help themselves and their friends first."

AN IMPOSSIBLE PROGRAM

In the emotional atmosphere of the war period some astonishing economic propositions were accepted as if they were axiomatic truths. Notably was this the case in the discussion of Germany's program of peaceful penetration in the economic sphere. It was undoubtedly linked up with schemes of military aggression. There was wide discussion of the methods to be used to guard against Germany's commercial policy. Sometimes these proposals indicated the desire that those who opposed Germany should take a leaf from her dog-in-the-manger policy. Strange conceptions of international trade that suggest the mercantilism of the seventeenth and eighteenth centuries were revived in order to guard against any attempt on the part of Germany to secure a privileged industrial position after the war. As early as 1916 there was the famous proposal of an anti-German economic league contemplated in the Paris resolutions of that date. In Great Britain the supporters of this policy also actively advocated a system of imperial preference by which special advantages would be given to countries within the bounds of the British Empire. The result of upholding any double-barreled policy of this type is described by the Edinburgh _Review_ as impossible of realization.

"Even if Belgium, France, and Italy alone took that course, the whole policy of an economic boycott, or partial boycott, to prevent German expansion or to punish German crimes would fall to the ground. We cannot imprison Germany in an economic strait jacket if her territorial neighbors are willing to trade with her. As a matter of fact before the war the most important and the most expansive portion of German export trade was with the continent of Europe."

COMMERCIAL AVIATION

A great advance in aeroplane development was one of the most spectacular results of war activity. The military side of this development must be discussed in another place, but the fact that aeroplanes had to be constructed substantial enough to carry a large amount of explosives naturally brought up the whole question of the commercial side of aeroplane employment. Although the aeroplane has been developed to a remarkable extent for war purposes, it must not be taken for granted that every type of aeroplane has its use for peace. In the military machine regard has been paid rather to gun positions, bomb carrying capacity and performance than to economy in operation and large cargo space, which are the essential peace requirements. This aspect of the problem was discussed by F. Handley-Page in an article in the _Fortnightly Review_.

"The type of aeroplane for commercial work requires careful consideration and design. In estimating the value of a transport vehicle account must be taken of the respective proportions of the load that are and are not remunerative. A steam motor wagon that was only just able to transport the coke for its own consumption would be useless for transport work. The large quantity of fuel the aeroplane must carry makes this point an important one regarding it. It affects very largely the _type_ of aeroplane that must be chosen for each duty.

"The total lift of a large bombing aeroplane of medium speed is about 20 lbs., while that of a small high-speed scout may not be more than about 8 to 10 lbs. per horse-power. From these lifts have to be deducted the weight per horse-power of the aeroplane structure and engines. These leave a margin of about 11 pounds per horse-power in the case of the large machine and of only about two to four pounds per horse-power in the case of the smaller and higher speed machine. From these margins have to be deducted the weight _per horse-power_ of the pilot and of the fuel to be carried."

According to this expert's opinion there is little probability of using for commercial purposes the small high-powered aeroplane. But if large machines are used with a speed limit of 100 miles an hour and fitted with twin engines, Mr. Page thinks that such machines will have economic possibilities. Countries now far distant from one another can be brought close together. For example Australia will be within a week of London, and he thinks that passengers can be carried at the rate of about six cents a mile. If air transport is to be systematized he is in favor of strict state regulation:

"There must be no possible chance of the wildcat schemes of the early railway days recurring, nor must aircraft or their pilots be below a specified standard. The State must see that projects doomed to failure owing to lack of financial or technical backing are prevented from being placed before the public.

"Regulations must be drawn up which will insure that the machines cannot be used for the public service until they have received a certificate similar to that now issued by Lloyd's for ships. Pilots must not be allowed to fly machines conveying the public or mails, unless they have received a certificate equivalent to that issued to the master of a ship by the Board of Trade before he can take charge.

"The aeroplane will not compete with the telegraph system, cable, or wireless, but will be a useful adjunct conveying written signed statements, important documents, long reports, and descriptive letters in the time of a week-end cable and at a fraction of the cost.

"It will enable the business man to visit his overseas agencies and friends, to discuss matters with them on the spot and examine the requirements of their districts, at the cost of a few _days_ instead of months of travel."

V--THE MONEY COST OF THE WAR

Over $210,000,000,000 Spent by the Belligerents--How This Stupendous Sum Was Raised--What the War Cost Uncle Sam

By EDWIN R. A. SELIGMAN

Professor of Political Economy and Finance in Columbia University

The cost of a war may mean several different things. It may mean, in the first place, the actual money cost, or expenditure in dollars and cents, directly involved in prosecuting the war. Or, secondly, it may mean the war cost, both direct and indirect, from the economic point of view. The real cost of a war from this latter point of view may mean either actual loss of lives and property or the diminution of the annual social production. The wealth of a country measured in its social income may be reduced either by the actual loss of territory, as in Germany; by the impairment of its natural resources like the coal mines and forests, as in France; by the reduction of labor power, due to the wounded workmen or the results of starvation or privation, as in many countries of Europe; or by the loss of economic efficiency due to a reduction of the standard of life or to a changed attitude toward habits of work. The real costs of war, although often incalculable, are none the less of profound significance.

The actual money costs or expenditures of government for war include not only the actual outlays for military and naval purposes, but also the whole range of expenditures incurred in industrial life to prepare the wherewithal for the Army and Navy; and they also comprise the sums devoted to the maintenance of the families of the soldiers. All these items are far greater in modern times than they used to be. It is a far cry from the meeting of two savage tribes armed only with bows and arrows or javelins, to the modern 16-inch guns, the dreadnoughts, the airplanes, the submarines, the poison gas and the innumerable technical adjuncts of modern warfare. The consequence is that the money costs of the World War have far transcended those of all previous conflicts.

The attempt to present in figures the costs of the war meets with several difficulties. In the first place the question arises as to the period at which we ought to stop. In one sense the war ceased when the armistice was declared. In another sense the war did not actually stop until the peace was declared--in this case a matter of many months additional. But even when peace was declared the war expenses were by no means over. The process of demobilization is a slow one: moreover it is necessary to continue for some time the policing of the conquered countries; and finally comes the question of the pensions to the wounded soldiers or to the families of the dead. It will be seen, therefore, how impossible it is to state with any accuracy at the present time the costs of the war, when those are still being incurred. Furthermore, the figures ordinarily given contain additional inaccuracies. The richer countries make loans to the poorer countries and these expenditures are consequently counted twice in the total,--a procedure legitimate only on the assumption that the loans will not be repaid. Again, in a country like the United States, which has substituted an insurance system for the pension system, the nominal expenditures appear smaller than is really the case, because of the receipt of vast insurance premiums which will ultimately all be expended again. Finally the figures make no allowances for the change in the price level or the alteration in the value of money. In a great war like the present, prices have risen: in some countries they have doubled, in some countries they have more than tripled, for reasons which it is needless to discuss here. What appears, therefore, to be a great and increasing outlay from year to year may be in reality due in part, at least, to this cause.

After making all allowances for these difficulties we may proceed to state some of the facts as to the actual outlays of various countries.

THE COST OF THE WAR DAY BY DAY

In all the belligerent countries it naturally took some time for them to get into their stride. This is especially true of Great Britain. The figures of the average daily expenditures, as given by the Chancellor of the Exchequer, amounted to almost $10,000,000 in the opening months of the war and reached a maximum of almost $36,000,000 by 1918. These figures, however, are not exact because they include all of the expenditures. The real war expenditures may be arrived at by deducting in each case the amount of the expenditures in the last year of peace, ending March 31, 1914. Making these corrections, it appears that the average daily war expenditures in England rose from about $9,500,000 during the first eight months of the war to about $33,500,000 in 1918, then slowly receding in 1919. In France the average daily expenditures were naturally somewhat less, rising from about $8,500,000 during the first three months of the war to over $21,000,000 during 1917, the last full year of the war. In Germany the daily expenses were approximately the same as in Great Britain, rising from about $13,000,000 in the first nine months of the war to $34,500,000 during the last six months of 1918. In the case of both Germany and France, it is not known whether the figures comprise the total expenditures or only the pure war expenditures. In the former event the daily expenditures of Germany would be a little less than those of Great Britain; in the latter, they would be a little more. In Italy and Austria-Hungary the daily expenditures were naturally smaller, amounting at the maximum to about $10,500,000 and $20,000,000 respectively. In Russia the daily expenditures rose in 1916 to about $20,000,000 and in 1917, just prior to the October revolution, nominally to $47,000,000. But, owing to the great depreciation of the ruble, the actual expenditures were much less.

OUR WAR EXPENSES MONTH BY MONTH

When the United States entered the war the scale of its operations became so stupendous that its daily war expenditures soon far exceeded those of any other belligerent. In the second month of the war the average daily expenditures for pure war purposes were $15,000,000 and little over a year later they had risen to almost $50,000,000. By the end of 1918, the daily average war expenditures reached the staggering figure of $64,500,000.

If, now, we attempt to present the statistics of the total cost of the war we must be mindful of the difficulties mentioned above. The figures are not entirely accurate, and cannot be made entirely accurate for the following reasons: In the first place, the last date in the official return differs from country to country. They are, however, all subsequent to the armistice, with the exception of Russia, where we have no trustworthy figures after the advent of Bolshevism. In the second place, we do not know, except in the case of the United States and Great Britain, whether the figures comprise the total expenditures or only the purely war expenditures. Even making allowance for these differences it will be seen that the total war expenditures amount to over $232,000,000,000. In Japan and some of the minor belligerents, there were virtually no war expenses. Inasmuch, however, as most of the countries will continue to have expenses attributable to the war for some little time in the future, it is probable that the total war expenditures will amount, by the end of 1920, to almost $236,000,000,000. From this must, however, be deducted the sums counted twice, because advanced to their allies by the United States, Great Britain, France and Germany. Making allowance for this, it is safe to say that the total net war expenditures will be about $210,000,000,000.

WAR EXPENDITURES OF ALL BELLIGERENTS In Millions ==================================================================== | From entrance | To | | | into war | | | --------------+----------------+----------------+----------+-------- Great Britain | August 4, 1914 | March 31, 1919 | £ 8,601| $41,887 | | | | Australia | August 4, 1914 | March 31, 1919 | £ 291| 1,461 | | | | Canada (inc. | August 4, 1914 |August 31, 1919 | | 1,545 Newfoundland) | | | | New Zealand | August 4, 1914 | March 31, 1919 | £ 76| 365 | | | | South Africa | August 4, 1914 | March 31, 1919 | £ 33| 243 | | | | India | August 4, 1914 | March 31, 1919 | £ 119| 584 | | | | ------- British Empire| | | | $46,083 | | | | France | August 3, 1914 | March 31, 1919 |fr 169,000| $32,617 | | | | Russia | August 1, 1914 |October 31, 1917| ru 51,500| 26,522 | | | | Italy | May 23, 1915 |October 31, 1918| li 81,016| 15,636 | | | | Belgium | August 2, 1914 |October 31, 1918| fr 5,900| 1,387 | | | | Rumania |August 27, 1916 |October 31, 1918| | 907 | | | | Serbia | July 28, 1914 |October 31, 1918| | 635 | | | | United States | April 15, 1917 | June 30, 1919 | | 32,261 | | | |-------- Entente Powers| | | |$156,050 | | | | Germany | August 1, 1914 |October 31, 1919|mk 204,268| 48,616 | | | | Austria- | July 28, 1914 |October 31, 1919|kr 119,504| 24,858 Hungary | | | | Turkey |November 3, 1914|October .., 1919| | 1,802 | | | | Bulgaria |October 4, 1915 |October .., 1919| | 732 | | | | ------- Central Powers| | | | $76,008 | | | | Total | | | In |$232,058 | | | Millions | ====================================================================

HOW MONEY FOR WAR WAS RAISED

The question now arises as to the steps taken by the various countries to meet these stupendous outlays. Of the older expedients, such as war treasures, or the sale of public property there was naturally no question. In only one country, viz., Germany, was there a war treasure; but this was so small as to be well-nigh negligible. The only two available resources were accordingly taxation and borrowing.

When we compare these two expedients, we are struck not only by the great difference in the theories of war finance followed by the various countries, but also by the diversity in the economic conditions which largely influenced the choice. In a general way, it may be said that all countries were compelled to rely to an overwhelming extent on public loans, but that Great Britain and the United States raised a far greater share by taxation than did other countries. Italy was able to raise by new taxation only just about enough to pay the interest on the new loans; Germany accomplished this only in part; while France was not in a position to defray any of her war expenditures from additional taxation. The same is true of the other belligerents, with the exception of the British colonies.

Proceeding now to take up this matter in detail, we shall first attempt to set forth the facts as to war taxation.

UNITED STATES ----------------------------+-------------+-------------+------------ | Monthly | | |Expenditures | | |exclusive of | | |the principal| | | of the | Monthly | Average | public debt | War | Daily |and of postal|Expenditures |Expenditures |expenditures | [19] | ----------------------------+-------------+-------------+------------ | Million $ | Million $ | Million $ April 6--30, 1917 | 279 | 219 | 8. May, 1917 | 527 | 467 | 15. June, 1917 | 410 | 350 | 11.7 | ------ | ------ | Total April 6--June 30, 1917| 1,216 | 1,156 | | | | July 1917 | 662 | 602 | 19.4 August 1917 | 757 | 697 | 22.5 September 1917 | 746 | 686 | 22.9 October 1917 | 944 | 884 | 29.5 November 1917 | 986 | 926 | 30.9 December 1917 | 1,105 | 1,045 | 33.7 January 1918 | 1,090 | 1,030 | 33.2 February 1918 | 1,012 | 952 | 34. March 1918 | 1,156 | 1,096 | 35.9 April 1918 | 1,215 | 1,155 | 38.5 May 1918 | 1,508 | 1,448 | 46.7 June 1918 | 1,512 | 1,452 | 48.4 | ------ | ------ | Total for fiscal year, 1918 | 12,697 | 11,977 | July 1918 | 1,608 | 1,548 | 49.9 August 1918 | 1,805 | 1,745 | 56.8 September 1918 | 1,557 | 1,497 | 49.9 October 1918 | 1,665 | 1,605 | 51.8 November 1918 | 1,935 | 1,875 | 62.5 December 1918 | 2,061 | 2,001 | 64.5 January 1919 | 1,962 | 1,902 | 61.4 February 1919 | 1,189 | 1,129 | 40. March 1919 | 1,379 | 1,319 | 42.5 April 1919 | 1,429 | 1,369 | 45.6 May 1919 | 1,112 | 1,052 | 33.9 June 1919 | 809 | 749 | 24.9 | ------ | ------ | Total for fiscal year 1919 | 18,505 | 17,785 | | | | Total April 6, 1914 to June | | | 30, 1919 | 32,428 | 30,918 | ----------------------------+-------------+-------------+------------

[19] Obtained by deducting 11/12 of the annual (peace) expenditures for 1915--1916 exclusive of postal expenditures, i. e. 11/12 of $1,008--287 millions--60 millions. Secretary Glass in his letter of July 9, 1919 to the Chairman of the Committee of Ways and Means excludes postal expenditures in the first column, but fails to exclude them when making the deduction for peace expenditures. He consequently arrives at the figure of 30,177 billions as the cost of the war; making allowance for this fact, and using the final corrected figures, we reach the figure of $32,261,000,000 as the cost of the war to June 30, 1919.

WAR TAXATION IN OTHER COUNTRIES

Great Britain, as the wealthiest country at the outbreak of the war, endeavored to raise as much as possible from taxation. From year to year, as the expenses mounted up, more and more demands were made upon the taxpayer. But the expenditures for the war were so enormous that it soon turned out to be impracticable, even with the best of will, to secure more than a comparatively small proportion of the total cost from taxation. The figures usually advanced by the various Chancellors of the Exchequer and repeated parrot-like by most commentators take the proportion that total taxes bear to total expenditures. This method of calculation, as will be seen from the table, shows that almost a quarter of the total expenditures, or to be more exact, 24.9 per cent., was derived from taxes. These figures, however, err doubly. In the first place the significant problem is to ascertain the war expenditures, not simply the total expenditures. These can naturally be obtained only by deducting from the annual total expenditures the sums equal to the peace expenditures, _i. e._, the expenditures for the last full year of peace. In the second place, what is significant is not the total taxes, but the war taxes; that is, the proceeds of the additional taxes raised during the war. These again can be obtained only by deducting from the total tax revenue the proceeds of the taxes during the last full year of peace. If then we endeavor to ascertain how much of the war expenditures were met by war taxes--and this is really the important problem--we find that, immense as were the burdens resting upon the British taxpayer, the percentage of war expenditures raised by war taxes is much smaller than is usually stated. As a matter of fact, in the first year of war only a little over 7 per cent. of the total war expenditures were raised from taxes. With every succeeding year the percentage increased until the last year of war, 1918--19, a little over one-quarter of the war expenditures were met from war taxes. For the entire five years the proportion of war taxes to war expenditures was slightly over 17 per cent.

In the other belligerent countries the showing was by no means so good. France struggled under a double difficulty. In the first place France was invaded at the very outset of the war, and the territory occupied, although relatively small in extent, represented the richest and the most industrially developed part of the country. This operated largely to reduce the ordinary revenues. In the second place the resultant economic confusion, as well as the general political situation, made it very difficult to impose any new taxes at all. The consequence was that for the first three years of the war, the tax revenues of France did not even suffice to defray the ordinary peace expenditures.

After a little while, indeed, France found it possible to levy some war taxes; but these were exceedingly slight compared with what had been accomplished in Great Britain. The result is that the new war taxes of France were only just about sufficient to make up the deficit on the ordinary peace budget--a deficit caused chiefly by the devastation of the occupied territory. In France, therefore, we may say that as a result no part of the expenditures was met by war taxes.

In Italy the situation was a little better. Italy had not been invaded and its financial situation was not so desperate as that of France. Moreover, Italy entered the war somewhat later and did not have to endure a strain for so long a time. Italy consequently proceeded as soon as possible to levy new war taxes; but as Italy had always been relatively overtaxed, as compared with Great Britain, it was not feasible to do as much. As a result, the war taxes levied by Italy were just about sufficient to pay the interest on the war loans. While Italy, therefore, did better than France, she also was not able to defray any of the war expenditures proper out of war taxation.

The condition of Russia soon became worse than that of France and Italy, and even before the October revolution, Russia was able to put very little reliance upon revenues from war taxation.

Among the Central Powers the situation was much the same, but for a different reason. Germany at the outset of the war had so confidently counted upon victory and upon huge indemnities that it resolved to defray its war expenses entirely from loans. It must, however, be observed that in Germany a not insignificant part of the war expenses were met by the separate states; and in these various states a considerable increase of taxation was provided for at once. As the war proceeded and the hopes of a speedy and complete victory gradually faded away, Germany began to change her policy and decided, especially from 1916 on, to impose more and more taxes. The result was that by the end of the war Germany had done a little better than France.

OUR WAR TAXES COMPARED WITH WAR EXPENDITURES

We come finally to the experience of the United States. When the United States entered the war it was confronted by two rival theories of public finances. One was to the effect that the war expenses should be defrayed entirely by war loans, as had been the case in the early years of the Civil War and as was true of many of the belligerents during this war. The other theory was that the war expenditures ought to be defrayed entirely out of war taxes. This was equally extreme and perilous as the former theory, and labored under the additional disadvantage of being impossible of achievement. The President went so far as to adopt the fifty-fifty theory, namely, that half of the war expenditures ought to be defrayed from taxation.

The prodigious profits made during the beginning years of the European war and the resulting prosperity throughout the country enabled Congress to levy taxes far higher than had before been attempted in our history. Even with an immense addition to taxation, however, the proportion of war expenses derived from war taxes was relatively small. Here, again, we must observe the same caution as in the case of the British figures. We must not compare total expenditures with total taxes, but war expenditures with war taxes. War expenditures are easily ascertained by deducting for each year the amount of the expenditures for the last year of peace, the year ending June 30, 1916. In the case of war taxes, however, it is more exact to deduct from the total revenues the tax revenues for the year ending June 30, 1915. For during the year 1915--16 a number of taxes were already levied in preparation for our possible entrance into the war.

As a matter of fact, during the first quarter of war ending June 30, 1917, the proportion of war expenditures derived from war taxes was less than one-third or 30 per cent. If we exclude loans to Allies on the assumption that they will all be repaid some day, the showing is somewhat better--as two-thirds of the expenditures of that period consisted of such loans.

As soon, however, as we struck our full gait the situation was less satisfactory. The proportion of war expenditures derived from war taxes during the year 1917--18 was less than one-quarter or more exactly only 24.8 per cent. and if we again exclude loans to Allies, only 30 per cent. In the last year of the war the showing was still less favorable. If we take the expenditures for the entire period of our participation in the war the figures are respectively 21.7 per cent. and 27 per cent. For the entire period of our participation in the war, less than one-fourth (or exactly 23.3 per cent.) of the war expenditures were paid out of war taxes. And if the loans to Allies are again excluded the proportion is still under one third, or more exactly 32.5 per cent.

This compares favorably even with the British figures. But it conclusively shows how impossible it is even with the best of will, to raise more than a relatively small part of war expenses from war taxes; especially during the early period of a war.

CHARACTER OF WAR TAXATION

The next point of interest is that of the character of the war taxes imposed by the various countries. Here again we notice a very great difference. In all of the European belligerents on the continent, at least as much additional revenue was raised from direct, as from indirect, taxation. In France about as much new revenue came from indirect taxation or taxes on consumption as from direct taxation or taxes on wealth.

The situation is still less satisfactory in the other continental countries.

In England, on the other hand, a different path was pursued from the beginning. While it is true that a considerable increase of revenue was derived from indirect taxes like customs and excise, the chief reliance was placed on the increase of the income tax, on a new war profits tax and finally, although to a minor degree, on an increase in the inheritance tax.

When we come, however, to the situation in the United States we find the democratic movement so strong that the overwhelming proportion of the new tax revenue was derived from direct taxation on wealth rather than from indirect taxation on consumption. In the great Revenue Act of 1917 over 79 per cent. of the new tax revenue came from direct taxation, principally the income tax and the excess profits tax. In the second great Revenue Act of 1918, the proportions were still more favorable, the amount ascribable to direct taxation in 1919 being almost 81 per cent.

UNITED STATES Internal Revenue Receipts In millions of dollars

Per Per Year ending June 30 1918 Cent. 1919 Cent. Income and profits taxes 2,839 2,596[20] Munition manufacturers tax 13 ..... Estate tax 47 82 Corporate capital stock tax 25 29 ----- ----- Total taxes on wealth 2,924 79.1 2,707 70.5

Distilled spirits 318 365 Fermented liquors 126 118 Tobacco 158 206 Stamp taxes 19 37 Transportation 71 234 Insurance 6 15 Excise taxes 37 78 Soft drinks 2 7 Admissions 26 51 Miscellaneous 8 22 ---- ---- Total taxes on consumption, transactions and commodities 771 20.9 1,133 29.5 Total 3,695 .... 3,840 ....

[20] As the new taxes are payable in instalments, about 2 millions of the 1919 tax will not be received until the fiscal year 1920. Making allowance for this the proportion of taxes on wealth really ascribable to the year 1919 rises to 80.6 per cent.

With the impossibility of securing more than a comparatively small proportion of the war expenditures from taxation, it accordingly became necessary to resort to borrowing. This was consequently done by every country on a gigantic scale; although here again the fiscal and economic conditions in the various countries were so different that they employed quite diverse expedients.

Great Britain provided at the outset of the war for immediate needs by the selling of short time securities, principally Treasury Bills. Before long these had amounted to such a sum that it became necessary to issue long time bonds. Accordingly, subscriptions were invited to the first war loan, which was issued on March 1, 1915, followed by the second war loan on June 1, 1915. These bore interest at the rate of 3½ and 4½ per cent. and the amount issued was $1,703,000,000 and $2,883,000,000 respectively. On February, 1916, a continuous issue of War Savings Certificates was inaugurated. On April 15, 1917, the third war loan was issued at 4 per cent., followed on June 1, by the issue of 5 per cent. bonds. Of these $4,811,000,000 were issued.

Beginning on October 2, 1917, a continuous issue of 4 and 5 per cent. National War Bonds was made, the difference in the rate of interest being due to the tax exemption. The temporary and short time paper was gradually funded into these bonds. In the meantime the Anglo-French loan of $500,000,000, of which England had one-half, had been contracted in the United States; and with the entrance of the United States into the war on April 6, 1917, continually larger sums were borrowed from the American Government. During the period of the war the British debt rose from £650,000,000 to £7,643,000,000 or from $3,115,000,000 to $37,221,000,000. It is expected that $250,000,000 will be borrowed during the year 1919--20, so that in all probability the debt of Great Britain at the end of 1920 will amount to almost £8,000,000,000, or $38,500,000,000, meaning that the war debt probably will amount to about £7,500,000,000, or $35,000,000,000.

France was in a far less favorable situation than England at the outset of the war. The total debt of France at the close of 1913 amounted to fr. 32,594,000,000, or $6,291,000,000, and the ordinary budget had closed with a large deficit. So that it had been necessary to issue a loan during the spring and summer of 1914. When the war suddenly broke out, precipitating an economical and financial crash, it became practically impossible to issue another loan. The government was therefore compelled to rely upon advances from the Banque de France, which was permitted correspondingly to increase its notes issue. It was not until November, 1915, that France saw her way to issue her first war loan of 5 per cent. bonds. This was followed on August 6, 1916, by the second war loan, also of 5 per cent. bonds, on December 15, 1917, by the third war loan of 4 per cent. bonds, and on Dec. 15, 1918, by the fourth war loan, also at 4 per cent. The first war loan issued at 88 yielded $1,894,000,000; the second, at 83.75, yielded $1,981,000,000; the third at 68.60 yielded $2,914,000,000 and the fourth at 70.8 yielded $5,382,000,000. Meanwhile National Defense Bonds were issued continuously from February 25, 1915, and foreign loans had been contracted in England, in the United States and in Japan. The result was that at the close of the year 1918 the French debt amounted to fr. 167,469,000,000 or $32,322,000,000. This meant that the debt due to the war amounted to fr. 134,875,000,000 or $26,031,000,000. It is expected, however, that a considerable sum will still have to be borrowed during the year 1919, thus bringing the total French debt to 27 or 28 billions of dollars.

Russia was the first of the Entente Powers to issue public loans. On September 14, 1914, it issued a 5 per cent. loan at 94, yielding $259,000,000. This was followed at regular intervals by six more loans prior to the revolution of 1917. After the revolution there was considerable confusion which, of course, was much accentuated by the advent of Bolshevism. The consequence was that the public debt of Russia, which amounted for July, 1914, to $4,623,000,000, increased by the time of the October revolution in 1917 to 49,288 millions of rubles or 25,383 millions of dollars. This would mean a war debt of almost twenty-one billions of dollars. As a matter of fact of course it is very uncertain whether the debt will ever be redeemed at these figures.

The debt of Italy before it entered the war amounted to lire 13,636,000,000 or $2,621,000,000. Italy started at once with a so-called mobilization loan followed by its first war loan in July, 1915, and successive war loans on the first of January of each of the following years. The result was that on October 31, 1918, the total debt amounted to lire 63,093,000,000 or $12,177,000,000. By the end of May, 1919, the debt had grown to 77,763,000,000 lire or $15,009,000,000 leaving as the war debt lire 64,127,000,000 or $12,388,000,000.

Of the Central Powers, Germany started at once on October 1, 1914, to issue a war loan at 5 per cent., having from the outset decided to rely upon comparatively long time bonds rather than upon temporary or short time securities as was the case in England and in France. There followed in regular succession eight war loans bearing 4½ and 5½ per cent. interest. As a result, the debt of Germany, which before the war amounted to Mk. 4,732,000,000 increased on October 31, 1919, to Mk. 204,000,000,000 or $48,552,000,000; the war debt proper in Germany would therefore amount to $47,426,000,000.

TOTAL WAR DEBT, UNITED STATES

When the United States entered the war it depended, for the time being, on temporary war certificates. But at the beginning of June, 1917, Liberty Loans were issued in continually greater dimensions. In the table below the details of the four Liberty Loans and the Fifth Victory Loan are given, showing that over $20,000,000,000 were raised from bonds alone. To these is to be added the unfunded loans. It appears that the total net debt of the United States, which in April, 1917, was $1,190,000,000, increased by June 30, 1919, to $24,232,000,000, making a war debt of $23,042,000,000. Inasmuch, however, as somewhat over a billion dollars from the Victory Loan will be paid in the course of the year 1919--20, and as still more will have to be borrowed temporarily, the total war debt of the United States by the end of 1920 will amount to over $25,000,000,000, including the nine billions advanced to the Allies.

UNITED STATES In Millions Debt Less Annual Cash in Interest Treasury Charge April 5, 1917 $1,189 $23 June 30, 1917 1,909 84 June 30, 1918 10,924 466 June 30, 1919 24,233 619

DEBT ON JUNE 30, 1919 Bonds Pre-war bonds 833 War loans First Liberty Loan $1,985 Second Liberty Loan 3,566 Third Liberty Loan 3,959 Fourth Liberty Loan 6,795 Victory Loan (notes) 3,468 20,455 Treasury Certificates 3,634 Old debt on which interest increased 2 Non-interest bearing debt 236 ------ Total gross debt 25,485 Cash on hand 1,252 ------- Net debt (In Millions) $24,233

The other belligerents need not be treated separately. The total pre-war debt, including Japan, whose debt was increased only by the money raised to loan to Great Britain and France, amounted to almost $28,000,000,000. The debt at the close of the war amounted to over $224,000,000,000, making the net war debt somewhat over $196,000,000,000. When we compare this with the total cost of the war, which, as we have seen, will amount to about $210,000,000,000, it appears that almost the entire cost of the war will have been defrayed from loans, the difference of well-nigh $15,000,000,000 derived from taxation being due almost entirely to the efforts of Great Britain and the United States respectively.

PUBLIC DEBT OF THE BELLIGERENTS 000,000 omitted ========================================================== |Before | | After | War debt | |the war| |the war | | ---------+-------+----------+--------+-----------+ Great |Aug. 4,| £650 = |Mar. 31,|£7,643[21] | $34,056 Britain | 1914 | $3,165 | 1919 | = $37,221 | | | | | | Australia|Aug. 4,| 97 = 472 |Jan. 31,|[22] 336 = | 1,162 | 1914 | | 1919 | 1,634 | | | | | | Canada. |Aug. 4,| 332 |Mar. 31,| 1,584 | 1,250 | 1914 | | 1919 | | | | | | | New |Aug. 4,|100 = 487 |Mar. 31,| 170 = 828 | 341 Zealand | 1914 | | 1919 | | | | | | | South |Aug. 4,|126 = 614 |Mar. 31,| 175 = 846 | 332 Africa | 1914 | | 1919 | | | | ------ | | ------- | ------- British | | $5,070 | | $42,213 | $37,143 Empire | | | | | | | | | | France | July |fr. 32,594|Dec. 31,|fr. 167,459| 26,031 | 1914 | = $6,291 | 1918 | = 32,322 | | | | | | Russia | July |ru. 8,800 |Jan. 1, |ru. 49,288 | 20,760 | 1914 | = 4,623 | 1918 | = 25,383 | | | | | | Italy | May |li. 13,636|Oct. 31,|li. 77,763 | 12,388 | 1915 | = 2,621 | 1918 | = 15,009 | | | | | | Belgium |Aug. 2,|fr. 3,743 |Apr. 30,|fr. 9,787 =| 1,166 | 1914 | = 722 | 1919 | 1,888 | | | | | | Rumania | Aug. | 292 |Oct. 31,| 1,020 | 728 | 1916 | | 1918 | | | | | | | Serbia | July | 271 |Oct. 31,| 730 | 459 | 1914 | | 1918 | | | | | | | Japan | July |yen 2,494 |July 31,|yen 2,530 =| 18 | 1914 | = 1,190 | 1918 | 1,265 | | | | | | United |Apr. 5,| 1,190 |June 30,| 24,232 | 23,042 States | 1917 | | 1919 | | | | ------ | | ------- | ------- Entente | | $22,327 | | 144,062 | 121,735 Powers | | | | | ---------+-------+----------+--------+-----------+-------- Germany |Aug. 1,|mk. 4,732 |Dec. 31,|mk. 204,000| 47,426 | 1914 | = $1,126 | 1918 | = $48,352 | | | | | | Austria- |Aug. 1,| 3,726 |Oct. 31,|kr. 137,858| 24,858 Hungary | 1914 | | 1918 | = 25,584 | [23] | | | | | Turkey | Nov. | LT 112 = |Oct. 31,| LT 455 = | 1,517 | 1914 | 485 | 1918 | 2,002 | | | | | | Bulgaria |Oct. 4,| 219 |Oct. 31,| 974 | 755 | 1915 | | 1918 | | | | ------ | | ------- | ------ Central | | $5,556 | | $80,112 | 74,556 Powers | | | | | | | | | | Total | | $27,883 | | $224,174 | 196,291 | |In Millions |In Millions| ==========================================================

[21] Counting on repayments of one half of the loans to the Allies (£816 millions).

[22] Not including the debts of the separate states.

[23] Obtained by considering the debt of the new Austria as representing 70 per cent of the debt of all the states which constituted the old empire.

VI--AMERICAN BUSINESS IN THE WAR

Voluntary Coöperation of Experts and Loyal Support of Labor Put Our Industries on a War Basis

By GROSVENOR B. CLARKSON

Director of the U. S. Council of National Defense and of Its Advisory Commission

Modern wars are not won by mere numbers. They are not won by mere enthusiasm. They are not won by mere national spirit. They are won by the scientific conduct of war, the scientific application of irresistible force.

--WOODROW WILSON.

War today means that for every man on the fighting line there must be approximately ten men--and women--behind him in the factories, mills, and mines of the nation that enters the conflict. It is an enterprise to which military men alone have ceased to be called, for it enlists the specialists of every industry and every science from the fighting line clear back to the last line of defense.

When the American Marines were thrown into the battle line at the Marne, a French general officer rode up to headquarters.

"How deep is your front?" he asked.

"From here to San Francisco," was the reply; and in that statement lay the story of America's industrial and economic mobilization for war.

For America the actual arena of the war was 3,000 miles oversea, and into this arena the Government of the United States threw 2,000,000 of the most superb troops that the drama of warfare has known; and, what is more, got them there on time to make possible the final smashing blow. The organization, transportation, and clocklike delivery at the eleventh hour of these irresistible citizen armies of the great Republic of the western world is an epic in itself.

But here at home there were armies too. They were created without mandates; they were welded into cohesive form by suggestion rather than by order; they were galvanized from beginning to end by the mighty force of voluntary coöperation; and they went into the home stretch with a power which nothing could have stopped. These were the armies of production--production mainly, it is true, of guns and steel plates and soldiers' shoes; but production as well of energy, of thought that made the sword a flaming thing, of optimism to offset the stupid pessimism of people who criticized but had nothing tangible to contribute, of the immortal spirit of "carry on," of, above all, unification.

In all of this endeavor, in all of this uprooting of the static national life of peace time, the business man of America reached his apotheosis and surprised even himself in his ability to merge his heart and nerves and brain into the national interest in the most emergent hour of the country's history.

In effect, America went into the war unprepared. The will to war was a dormant thing throughout the nation. The country was swollen with material success almost to the point expressed in Lincoln's phrase: "A fat hound won't hunt." The evolution of the Government of the United States, enjoying profound peace for more than half a century, except for the minor military operations of the Spanish-American conflict, into a great war-making machine in mercilessly short time was a task to challenge the ability of even the most resourceful nation of the earth.

There, broadly stated, was the national picture in the spring of 1917. War came, and almost with every day grew the need for increased participation on America's part.

COUNCIL OF NATIONAL DEFENSE

The only federal agency in existence on April 7, 1917, capable of the elasticity to mobilize industry, labor, and science for the national defense was the United States Council of National Defense. This body, composed of the Secretaries of War, Navy, Interior, Agriculture, Commerce, and Labor, had providentially been created by Congress eight months before. It was charged by Congress with "the coördination of industries and resources for the national security and welfare" and "the creation of relations which will render possible in time of need the immediate concentration and utilization of the resources of the nation." With it was to act an advisory commission of seven men, each to have expert knowledge of some special industry, public utility, or the development of some natural resource.

The Council was further charged with the following particular duties:

1. To supervise and direct investigations and make recommendations to the President and the heads of Executive Departments as to:

(_a_) The location of railroads with reference to the frontier of the United States, so as to render possible expeditious concentration of troops and supplies to points of defense.

(_b_) The coördination of military, industrial, and commercial purposes in the location of extensive highways and branch lines of railroads.

(_c_) The utilization of waterways.

(_d_) The mobilization of military and naval resources for defense.

(_e_) The increase of domestic production of articles and materials essential to the support of the armies and of the people during the interruption of foreign commerce.

(_f_) The development of sea-going transportation.

(_g_) Data as to amounts, location, methods and means of production and availability of military supplies.

(_h_) The giving of information to producers and manufacturers as to the class of supplies needed by the military and other services of the Government, the requirements relating thereto, and the creation of relations which will render possible in time of need the immediate concentration and utilization of the resources of the nation.

2. To report to the President or to the heads of Executive Departments upon special inquiries or subjects appropriate thereto.

3. To submit an annual report to Congress, through the President, giving as full a statement of the activities of the Council and the agencies subordinate to it as is consistent with the public interest, including an itemized account of the expenditures made by the Council or authorized by it, in as full detail as the public interest will permit, providing, however, that when deemed proper the President may authorize, in amounts stipulated by him, unvouchered expenditures and report the gross so authorized not itemized.

PERSONNEL OF THE COUNCIL

Save for preliminary meetings late in the winter of 1916, the Council and Advisory Commission did not get under way to any appreciable degree until February, 1917, when both bodies began to meet separately and jointly with the primary purpose of taking the national balance, chiefly with regard to industrial resources. The permanent organization of both bodies was made on March 3, 1917.

The Council of National Defense was composed as follows:

Secretary of War Newton D. Baker, Chairman. Secretary of the Navy Josephus Daniels. Secretary of the Interior Franklin K. Lane. Secretary of Agriculture David F. Houston. Secretary of Commerce William C. Redfield. Secretary of Labor William B. Wilson.

The members of the Advisory Commission were:

_Transportation and Communication_: Daniel Willard, Chairman, President of the Baltimore and Ohio Railroad.

_Munitions and Manufacturing, including Standardization and Industrial Relations_: Howard E. Coffin, Vice-President of the Hudson Motor Car Company.

_Supplies, including Food and Clothing_: Julius Rosenwald, President of Sears, Roebuck & Company.

_Raw Materials, Minerals and Metals_: Bernard M. Baruch, financier.

_Engineering and Education_: Doctor Hollis Godfrey, President of the Drexel Institute.

_Labor, including Conservation of Health and Welfare of Workers_: Samuel Gompers, President of the American Federation of Labor.

_Medicine and Surgery, including General Sanitation_: Doctor Franklin Martin, Secretary-General of the American College of Surgeons.

The Director of the Council and the Advisory Commission during the greater part of the war was Walter S. Gifford, now Vice-President of the American Telephone and Telegraph Company, a most capable organizer, who with the writer had been closely associated with Howard Coffin in a pioneer industrial preparedness movement inaugurated in the spring of 1916 to examine into the capacity of industrial plants for military purposes. This was an entirely volunteer movement of business men and industrial engineers under the Naval Consulting Board of the United States, acting with the full approval of the President and the War and Navy Departments. Mr. Coffin's Committee on Industrial Preparedness did a remarkable job in a very short space of time, and the creation of the Council of National Defense was the logical sequence of the Committee's work, its records being turned over to the Council. The writer was the Secretary of the Council and the Advisory Commission throughout until the early summer of 1918, when he became Acting Director, succeeding Mr. Gifford shortly after the signing of the armistice.

PROPOSALS OF THE ADVISORY COMMITTEE

Although the Council and Advisory Commission did not, as has been stated, make permanent organization until March 3, 1917, the Advisory Commission on December 7, 1916, determined on the following proposals of action:

To begin immediately a study to determine the most effective flexible organization and mechanism for the securing of all necessary information and for the clarifying, recording, and classifying of such information when secured.

To begin immediately a study as to what media now exist which can aid in the carrying out of the purposes of the council. This study to be made in three divisions--governmental media in the departments, governmental media outside the departments, and civil media. As this study progresses it is believed that the council can aid materially in the development of such media, and can from time to time define (_i. e._, delimit and delineate) spheres of activity in which existing organizations may operate intensively without duplication.

To assist in the advance of the physical well being of the people of the nation.

To begin immediately a study of the possibility of the coördination of transportation, communication and surveys.

To continue the work done on the inventory of manufactures, of medical equipment and officers, of supplies, and of resources.

To assist in the development of the "Personal Index" already begun.

To set a fixed date (a date three months after the beginning of action is suggested) on which an inspection may be made of the work accomplished to that date. This inspection to be made through the submitting to the commission of an actual problem by the Departments of War and Navy, with the intent to determine at that time what needed information is or is not available.

To form a temporary organization to put the above proposals or any part of them or additional proposals into effect at the earliest possible date, with the intention of changing from a temporary organization to a permanent organization as the progress of the work makes this possible.

To begin a study of the best methods of expression of the work of the council to the people of the nation.

To scrutinize all legislative action touching national defense.

To do any other thing or take any other action necessary to give effect to the law under which the council and commission are organized.

PRE-WAR ACTIVITIES

At this time there was consideration of plans to enroll labor in an industrial reserve, and the question of mobilization of American railroads for military purposes was seriously discussed against future need. At the same time Commissioner Baruch stated that he had been making a study of the steel and metal industries in connection with the national defense, and wished for authority to consult further with the leaders in those trades. The Director was asked to establish relations in the interest of the national defense with civic organizations, patriotic associations, and chambers of commerce.

At a meeting on February 12, 1917, plans were discussed to call a series of conferences with the leading men in each industry fundamental to the defense of the country in the event of war, and at the same meeting a plan was laid down and afterwards agreed upon to split the Advisory Commission up into seven separate committees as detailed above, the Chairman of each committee to be given power to select the members of his committee from either governmental or civil life, or both.

At a meeting on February 14, 1917, E. S. Stettinius, who, acting for J. P. Morgan and Company, was the purchasing agent of the Allies at that time, was called before the Council to confer with it on the manufacture of munitions. In the same way during this early period men of the authority and standing of Herbert Hoover, Admiral Peary, and General Kuhn, who had closely studied the German armies, were called into consultation by the Council, Mr. Hoover of course, discussing the mobilization, distribution, and conservation of food supplies, and Admiral Peary the development of the aeroplane and seaplane for modern war.

On February 15th the Advisory Commission, further to progress its work then already under way, requested detailed lists of materials, with specifications and detailed dimensioned blueprints covering all equipment needed for a force of 1,000,000 men and for the assumed force of the Navy and Marine Corps with its numbers increased to emergency strength. It also called for estimates of reasonable accuracy covering the maintenance of a force of the size mentioned in the field during each ninety days of active service. The information was desired in order that approximations might be made as to the amounts of both manufactured and raw material for which it would be necessary to draw upon the resources of the country. The Advisory Commission later furnished estimates of its own.

On March 3rd Chairman Willard of the Advisory Commission read to the Council a list of men nominated by the Commission to compose a munitions standards board. It is highly significant to detail the names of these men with their occupations, for they were typical of the cream of American industry which from that time on was enlisted in the Government's interest:

W. H. Vandervoort, builders of special machine tools, and President of the Moline Automobile Co.

E. A. Deeds, formerly General Manager for the National Cash Register Co., President of the Dayton Engineering Laboratories Co., and interested in many industrial activities.

Frank A. Scott, Warner & Swasey Co., Cleveland, manufacturers of automatic machinery and optical instruments.

Frank Pratt, General Electric Co., Schenectady.

Samuel Vauclain, Baldwin Locomotive Works, Remington and Westinghouse Cos.

John E. Otterson, Vice-President, Winchester Arms Co.

The Council duly approved these nominations.

MEN OF VISION

It is impossible here to give more than a few instances such as the foregoing of the way in which the Council and Commission, with remarkable vision and perhaps even more remarkable disregard of precedent when precedent got in the way of the national welfare, made history in these pre-war days. Fully to tell the story of this period would pack a large volume. I quote from a recent partisan criticism directed by an American Congressman, as chairman of a congressional committee to investigate war expenditures, against the Advisory Commission particularly, which he characterized as the "secret government of the United States" during this vital space of time:

It appears from the minutes of the advisory commission and the council, which were kept separately, that practically all of the measures which were afterwards considered as war measures, were initiated by this advisory commission, adopted by the council, and afterwards acted upon by Congress. In many cases, a considerable period before the actual declaration of war with Germany this advisory commission was discussing matters which were thought to be new legislation, conceived by reason of the necessities of war. For instance, on March 3rd, over a month before the War declaration, the advisory commission indorsed to the Council of National Defense a daylight-saving scheme, and recommended a Federal censorship of the press. The question of Federal censorship of the press was further discussed on March 24th, two weeks before the declaration of war.

On February 15th, about two months before the declaration of war, Commissioners Coffin and Gompers made a report as to the exclusion of labor from military service, and the draft was discussed; the draft was also discussed on other occasions before anyone in this country, except this advisory commission and those who were closely affiliated with the administration, knew that a declaration of war was to be made later. At a meeting, on February 15th, this same commission of seven men (none of whom had any official authority except as advisors), recommended that Herbert Hoover be employed by the Government in connection with food control. It was generally understood, as appears from the minutes, that Mr. Hoover was to be in control of this matter, although war was two months in the future.

The advisory commission first met on December 6, 1916. Almost the first thing the commission did was to take up the matter of arranging an easy method of communication between the manufacturers and the Government. On February 12th, for example, Secretary Lane offered a resolution to the advisory commission suggesting to them to call a series of conferences of the leading men in various industries, so the industries might organize and be able to do business with the council through one man. In several meetings, long before the war was declared, this advisory commission of seven men met with the representatives of the manufacturing industries and formed an organization of them for selling supplies to the Government, which organization was well perfected before the war was declared. This method consisted of having the representatives of the various businesses, producing goods which the Government would have to buy, form themselves into committees so that they might be able to sell to the Government the goods direct, which their industries produced. In almost every meeting that this advisory commission had before the declaration of war, they discussed and recommended to the council (which consisted of six Cabinet members) these plans for fixing prices and selling to the Government. When war was declared on April 6th, this machinery began to move, headed by the advisory commission of these minutes, the active Government of the seven men, who were, in effect, as shown by United States, so far as the purchase of supplies was concerned. So far as I can observe, there was not an act of the so-called war legislation afterward enacted that had not before the actual declaration of war been discussed and settled upon by this advisory commission.

It should be said, of course, that no member of this Council organization ever sold commodities to himself. But that is another story.

MEN OF EXPERIENCE

I could not complete even a skeleton outline of the period in question without certain other references.

Further to emphasize the quality of the business men being called to Washington by the Council and Advisory Commission, I quote part of a letter to Chairman Willard of the Commission from Commissioner Baruch of March 23, 1917:

Mr. Daniel Willard, Chairman, Advisory Commission, Council of National Defense, Washington, D. C.

Dear Sir:

In pursuance of the authority given me and in order to be prepared to meet the requests made of the advisory commission, I have appointed the following committees. As the necessity arises and the advisability becomes apparent, I shall add from time to time other members to these committees, always bearing in mind keeping them down to such a size that they will be workable. It has been my endeavor to appoint on these committees men of proved ability and undoubted integrity.

LEATHER.--Walter C. Garritt, U. S. Leather Co., Boston, Mass.; George F. Johnson, Endicott, N. Y.; Theodore P. Haight, American Hide & Leather Co., New York City.

RUBBER.--A. Marks, Diamond Rubber Co., Akron, Ohio; Fred Hood, Hood Rubber Co., Watertown, Mass.; Stuart Hotchkiss, General Rubber Co., New York City.

STEEL.--E. H. Gary, President, American Iron & Steel Institute, New York.

WOOL.--J. F. Brown, Boston, Mass.; Sigmund Silberson, Chicago, Ill.; Joseph R. Grundy, Bristol, Pa.; F. J. Hagenbarth, President, National Association of Wool Growers, Salt Lake City, Utah.

NICKEL.--Ambrose Monell, President, International Nickel Co., New York.

OIL.--I have asked Mr. A. C. Bedford, president of the Standard Oil Co., to serve on the committee, but I shall probably add another from the Middle West, whose name I have not yet determined upon, and Mr. Ed. L. Doheny, of Los Angeles, Calif.

ZINC.--I have in the process of formation a committee representing the zinc trade. There are certain difficulties in the way of trade jealousies which we have to smooth away. The same thing is occurring in other lines, but it will be adjusted, and I shall report on them from time to time.

COAL.--I have been in consultation with the producers of coal, both bituminous and anthracite, and am now studying that situation as to the best method of covering coal.

SPRUCE WOOD.--I have also under consideration, but have come to no conclusion, the employment through a committee of those best fitted for obtaining the manufacture of aeroplanes for the Government the proper amount of spruce wood which seems to be needed.

LABOR PLEDGES SUPPORT

It will be long before the writer forgets the dramatic meeting of the Advisory Commission as early as March 3, 1917, when Commissioner Gompers reported that he had called an executive council meeting of the American Federation of Labor for March 9, 1917, for the purpose of considering the attitude of labor toward the preparedness plans of the government. The labor leader spoke with great emotion. He referred to England's difficulty in the first year of the war in enlisting the services of the working people. He went on to say that in England unity was then lacking between government and labor and that the same situation, if not properly handled before hand, could arise in this country in even more acute form, largely because of the racial diversity of our working classes. He concluded by stating that he was now bending his efforts to mobilizing good will in this direction, saying: [24] "I want the workingmen to do their part if war comes to America." He forecasted the meeting in Washington on March 12, 1917, of the officers of the National and International Trade Unions of America, and said: "I am expecting a definite response of support from every trade union in America." There is no doubt in the writer's mind that Samuel Gompers kept the faith throughout.

[24] I took Mr. Gompers' words verbatim.

On April 6, 1917, the Council and Advisory Commission approved a declaration of the attitude of American labor toward the war presented by Mr. Gompers' Committee on Labor of the Advisory Commission. This action was directed toward the maintenance of existing standards of employment, and provided, among other things, that the Council should issue a statement to employers and employees in industrial plants and transportation systems advising that neither employers nor employees should endeavor to take advantage of the country's necessities to change existing standards; and providing further that when economic or other emergencies might arise requiring changes of standards, the same should be made only after such proposed changes were investigated and approved by the Council. It likewise provided that the Council urge upon the legislatures of the States, as well as upon all administrative agencies charged with the enforcement of labor and health laws, the great duty of rigorously maintaining the existing safeguards as to the health and welfare of workers, and that no departure from such standards in State laws and State rulings affecting labor should be taken without a declaration of the Council that such departure was essential for the effective pursuit of the national defense.

MERGING THE RAILROADS

On April 7, 1917, the Council directed Chairman Willard of the Advisory Commission to call upon the railroads so to organize their business as to lead to the greatest expedition in the movement of freight and troops. The response of the railroads was literally splendid. Their executives came to Washington, conferred with Mr. Willard, and passed the following resolution:

RESOLVED, That the railroads of the United States, acting through their chief executive officers here and now assembled and stirred by a high sense of their opportunity to be of the greatest service to their country in the present national crisis, do hereby pledge themselves, with the Government of the United States, with the governments of the several States, and one with another, that during the present war they will coördinate their operations in a continental railway system, merging during such period all their merely individual and competitive activities in the effort to produce a maximum of national transportation efficiency. To this end they hereby agree to create an organization which shall have general authority to formulate in detail and from time to time a policy of operation of all or any of the railways, which policy, when and as announced by such temporary organization, shall be accepted and earnestly made effective by the several managements of the individual railroad companies here represented.

COÖPERATING COMMITTEES

The first of July, 1917, found the Council and Advisory Commission directing the operation of the following boards and committees:

Aircraft Production Board.

Committee on Coal Production.

Commercial Economy Board.

Woman's Committee.

General Munitions Board with its sub-committees on Army Vehicles, Armored Cars, Emergency Construction and Contracts, Optical Glass, Storage Facilities, Machine Guns, Priority, and Accounting.

Munitions Standards Board with its sub-committees on Gauges and Dies, Army and Navy Artillery, Fuses and Detonators, Small Arms and Munitions, Optical Instruments, and Army and Navy Projectiles.

Section on Coöperation with States.

Committee on Inland Waterways.

Committee on Telegraphs and Telephones.

Committee on Railroad Transportation, with which acted an executive committee made up of leading railroad presidents and six departmental committees composed likewise of railroad executives and paralleling the military departments over the country, and sub-committees on Express, Car Service, Military Equipment Standards, Military Transportation Accounting, Military Passenger Tariffs, Military Freight Tariffs, and Materials and Supplies.

Committees on Cars and Locomotives, with their personnel made up of the high executives of such concerns as the Baldwin Locomotive Works, the Pullman Company, and the American Locomotive Company.

Committee on Electric Railroad Transportation, composed of electric railway presidents.

Committee on Gas and Electric Service.

Committee on Automotive Transport.

Committee on Supplies, with its sub-committees on Cotton Goods, Woolen Manufacturers, Shoe and Leather Industries, Knit Goods, Leather Equipment, Mattresses and Pillows, and Canned Goods.

Committee on Raw Materials, with its sub-committees, popularly known at the time as the "A to Z" committees, on Alcohol, Aluminum, Asbestos, Magnesia and Roofing, Brass, Cement, Chemicals, Acids, Alkalis, Electrochemicals, Fertilizers, Miscellaneous Chemicals, Coal-Tar Products, Pyrites, Sulphur.

Sub-Committees on Copper, Lead, Lumber, Mica, Nickel, Steel Products, with sub-committees on Alloys, Sheet Steel, Pig Tin, Steel Distribution, Scrap Iron, Pig Iron, Iron Ore, and Lake Transportation, Tubular Products, Tin Plate, Wire Rope, Wire Products, and Cold Rolled and Cold Drawn Steel.

Sub-Committee on Oil, Rubber, Wool, and Zinc.

Committee on Engineering and Education, with its sub-committees on General Engineering, Production Engineering, Universities and Colleges, Secondary and Normal Schools, and Construction Engineering.

Committee on Labor, with its sub-committees on Mediation and Conciliation, Wages and Hours, Women in Industry, Welfare Work, Sanitation with twelve subdivisions, Vocational Education with nine subdivisions, Information and Statistics, Cost of Living and Domestic Economy.

General Medical Board, with a long and active list of sub-committees.

SERVICE OF EXPERTS

On these boards and committees sat, almost without exception, the American leaders of industry, science, and labor. Scattered through the list one finds such names as:

Rear Admiral David W. Taylor, one of the world's leading naval constructors.

F. S. Peabody, the great coal operator.

James J. Storrow, of Lee, Higginson & Co., of Boston.

A. W. Shaw, publisher of the _System_ magazine, who, as Chairman of the Commercial Economy Board, preached with remarkable success the gospel of conservation in business.

Dr. Anna Howard Shaw, who for her labors as Chairman of the Woman's Committee received the Distinguished Service Medal.

Frank A. Scott, on whom was bestowed the same distinction for his leadership of the General Munitions Board.

W. A. Starrett, constructing architect of New York, to whom in great measure is due the credit for the building of the cantonments in an incredibly short space of time.

Samuel Vauclain, President of the Baldwin Locomotive Works, whose contribution in the matter of Army and Navy artillery was monumental.

Theodore Vail, President of the American Telephone & Telegraph Company, who brought the wire communication men of the country to a common center in the national interest.

Charles Clifton, President of the National Automobile Chamber of Commerce.

Gen. George H. Harries, the famous electric railway operator.

Samuel Insull, President of the Commonwealth Edison Co., of Chicago.

Charles Eisenman, who, as active head of the Council's Committee on Supplies, procured for the Government $800,000,000 of supplies in 200 days at an overhead cost of but $20,000, involving the handling of 45,000 contracts, and who justly received the Distinguished Service Medal.

A. F. Bemis, President of the National Association of Cotton Manufacturers.

John P. Woods, the eminent woolen manufacturer.

J. F. McElwain, of the McElwain Shoe Company.

Lincoln Cromwell, of Wm. Iselin & Co., New York.

Arthur V. Davis, President of the Aluminum Co. of America.

Thomas F. Manville, President of H. W. Johns-Manville Co.

Charles F. Brooker, President of the American Brass Company.

John E. Morron, President of the Atlas Portland Cement Company.

John D. Ryan, President of the Anaconda Copper Company.

R. L. Agassiz, President of the Calumet & Hecla Mining Company.

W. A. Clark, President of the United Verde Copper Company.

Murry M. Guggenheim.

R. H. Downman, President of the National Lumber Manufacturers' Association.

Ambrose Monell, President of the International Nickel Company.

Gary, Farrell, Burden, Dinkey, King, Grace, Schwab, Topping, Dalton, and Clarke, the great steel executives.

Bedford, Davison, Doheney, Lufkin, Markham, Sinclair, Van Dyke, Muir, James, and Guffy, in whose hands lay almost the entire oil output of America.

Stuart Hotchkiss, President of the General Rubber Company.

F. J. Hagenbarth, President of the National Association of Wool Growers.

The Presidents of the leading zinc companies.

Then when we come to Engineering and Education:

Dr. Henry E. Crampton, of Columbia University.

Charles A. Stone, of Stone and Webster.

The heads of the great engineering societies.

The presidents of Harvard, Johns Hopkins, and other famous universities and colleges.

Among labor leaders such persons as:

Warren S. Stone, Grand Chief of the Brotherhood of Locomotive Engineers.

James W. Sullivan, Matthew Woll and Frank Morrison, all high in the American Federation of Labor.

Such well-known men as:

V. Everit Macy, Benjamin Ide Wheeler, John H. Finley, August Belmont, E. T. Stotesbury and Charles G. Dawes, afterwards a brilliant figure as a General in France.

Such nationally and internationally known physicians as:

General Gorgas; Dr. William H. Welch, of Johns Hopkins; the Mayos; Dr., afterwards Brigadier-General, Finney; Dr. George E. Brewer; Dr. George W. Crile; Dr. Simon Flexner; and Dr. Theodore Janeway.

Dr. George E. Hale, Chairman of the National Research Council, which was and is the Council's Department of Science and Research.

Thomas A. Edison, President of the Naval Consulting Board, which was and is the Council's Board of Inventions.

The activities of these men and their hundreds of colleagues, nearly all dollar-a-year workers and men whose time could not be bought, as a rule, in days of peace, reached out and touched almost every town and village in almost every part of the United States. They were moved and stimulated by the philosophy of voluntary coöperation, which was first and in a very daring way thrust into the consciousness of the nation by the Council of National Defense. It was the policy that won the war. One distinct benefit which the Government received from calling the industrial intelligence of the country to its aid was the breadth of view which industrial leaders possess. Their habit of mind to survey the field as a whole, to take a bird's-eye view of the problem to be solved, enabled the Government agencies to obtain a proper comprehension of the task of building the war machine. The country will probably never know the debt that it owes to these men and their like who came to Washington and bent their backs throughout the hot Southern summer during a series of endeavors in which absolutely no paths were charted.

NON-PARTISAN REPRESENTATION

It has been asked why a coalition government was not formed to wage the war. That very thing was in effect done by the Council, though we were all too busy to point it out at the time. A majority of the Advisory Commission was made up of Republicans. Certainly Republicans were in the huge preponderance in the Committee and Boards of the Council and Advisory Commission. Speaking as one who was not affiliated with the politics of the Administration of Woodrow Wilson, the writer never perceived a trace of political flavor in the organization and operation of the Council from first to last. Never did the six Democratic cabinet officers forming the Council itself so much as inquire into the politics of the hundreds of business men and experts nominated to them for appointment. It was an amazing demonstration of non-partisanship in a national crisis. The Council was an organization of specialists from beginning to end, and the work was everywhere carried forward on the most impersonal basis. The writer attributes this state of affairs to the breadth of view, and the very genuine passion for national service, of Secretary of War Baker, Chairman of the Council.

It should be plainly stated that, utilizing in the main dollar-a-year experts, the Council made the preliminary mobilization of industry to July 1, 1917, at the grotesquely small sum of $127,000. To May 1, 1919, its total expenditures, including the operation of the war industries for nearly a year, amounted to but $1,500,000, and this comprehended the expenditure of $225,000 for the erection of a building. I doubt if there is anything in governmental or commercial history to match those figures, squared with results. The savings of the Council and Advisory Commission to the Government and the people mounted literally into the billions, as careful analysis of pre-war and war-time prices on certain commodities will demonstrate. It was made possible by the Council's course in commandeering to its side the business men of the United States.

SOME RESULTS OF COÖPERATION

One of the practical results of voluntary coöperation was the agreement made by Mr. Baruch and Mr. Ryan with the largest copper producers of the country to furnish the Navy 20,000,000 pounds of copper and the Army 25,510,000 pounds at 16-2/3¢ a pound when the market price was 35¢ a pound. This meant saving to the Government close to $10,000,000. The copper men made this offer notwithstanding their increased cost for labor, materials, etc., because, as they said: "We believe it to be our duty to furnish the requirements of the Government in preparing the nation for war with no more profit than we receive from our regular production in normal times."

In the same way the steel makers of the country, represented in the Steel Institute, agreed to furnish steel to the Government at the basic price of 2.9¢ per pound as compared with the then market price of from 5¢ to 7¢ a pound. This represented an approximate saving to the Government of $18,000,000.

THE FIELD DIVISION

The tremendous effort of the Council to mobilize and coalesce into a fluid and powerful whole the industrial, economic and scientific forces, was supplemented and to a great extent made possible by the Council's Section on Coöperation with States, later known as the Field Division. Through this subordinate body was created, guided and coördinated the 185,000 units of the state, county, community and municipal councils of defense, which literally unified the citizenship of America for war. If production was to win the war, it was elementary that the civilian morale must be brought to the highest pitch of coöperation and efficiency--and it was accomplished. In this vital task a noble part was played by the Woman's Committee of the Council, which in the most thorough-going and swift manner brought the services of the women of the country to the Government. The director of this committee, Miss Hannah J. Patterson, received the Distinguished Service Medal.

WAR INDUSTRIES BOARD

On August 1, 1917, the Council, with its fortunate power to create subordinate bodies, brought into being the War Industries Board, of which the first Chairman was Frank A. Scott, and of which some of the other members up to the end of the war were:

Robert S. Brookings.

Brigadier-General Hugh S. Johnson.

Rear Admiral F. F. Fletcher.

Hugh Frayne, of the American Federation of Labor.

George N. Peek, a prominent Middle Western manufacturer.

J. L. Replogle, who became the very efficient Director of Steel Supply.

L. L. Summers, an expert on explosives.

Alexander Legge, General Manager of the International Harvester Company.

And Judge Edwin B. Parker.

Mr. Brookings was later placed in charge of price fixing and Judge Parker in charge of priorities. The War Industries Board undoubtedly accomplished a much better centralization of effort than was possible in the hurried organization of the early days, when the imperative need was to increase the sources of supply and get production going until the executive departments of the Government could get into their full stride. Mr. Scott was succeeded as Chairman of the War Industries by Daniel Willard, who in turn was succeeded by B. M. Baruch, who, in his leadership of this vital and powerful agency, duplicated the success that Mr. Willard had made as Chairman of the pioneer Advisory Commission.

CANTONMENT CONSTRUCTION

In indicating even an outline statement of the American industrial and economic effort in the war, the writer feels helpless to paint the picture within the space of a few thousand words. It simply cannot be done. But to visualize what the measure of the task was, let one thing be cited:

At our entrance into the war there were one colonel and four men to build the cantonments. The job involved the expenditure of $150,000,000 in about three months. The largest year's work on the Panama Canal amounted to but some $50,000,000. The situation was heart-breaking. On hearing of it Frank Scott, then Chairman of the General Munitions Board, called up the Secretary of War and said that something had to be done, with which the Secretary instantly agreed. The result was that the Colonel, afterwards Brigadier-General Littell, had a civilian organization built around him by the Council of National Defense, notably by W. A. Starrett, later himself a colonel in the Army, which functioned until the Army was in shape to carry on the job alone. The building of the cantonments was the greatest job of the ages. Incidentally it should be stated that the average profit to the contractors was less than three per cent.

MEN LITTLE KNOWN

The writer likewise feels great reluctance in mentioning, as he has mentioned, only a few of the men who waged the industrial side of the war. Many business men little known to the country gave up their businesses and came to Washington and did superhuman things--did them in an impersonal, selfless way that was nothing less than stirring. Many of them remain unknown to this day, and their chief reward must lie in the satisfaction that they drew to their own souls by what they did, which is, of course, the greatest satisfaction of all in such situations as war-time Washington exemplified.

It has not even been possible to touch on the work of business men in such great war agencies as the Food and Fuel Administration, the War Trade Board, the Shipping Board, the Aircraft Production Board, the Office of the Alien Property Custodian, the War Finance Corporation, and those divisions of the War Department which called highly qualified civilians to their aid. It would seem better to emphasize the initial effort, when the Council, through force of circumstances, became the great administrative laboratory for the examination, organization, and, at the proper time, allocation of totally new and untried phases of Federal action related to the prosecution of the war. It was in effect a fecund mother, which, it is not the slightest exaggeration to say, gave birth to and propelled the war machine which in the closing days of the conflict overseas was reaching to the peak of its load, and which in fact dealt the death blow to the Imperial German Government. It made, in truth, its fair share of mistakes, but some day its part in sending out the trumpet call to the business and labor and scientific leaders of America to join in the national defense will be fully told. Then there will be perceived in clear and true light the extent to which peace-loving American civilians offered all they had and all they were to the Government of the United States so that decency might again be paramount upon the face of the earth.

VII--THE LIBERTY LOAN ARMY

Mobilizing Americans at Home to Pay for the War--A National Effort Which Yielded $24,065,810,350

By GUY EMERSON

Vice-President of the National Bank of Commerce, formerly Director of Publicity, Government Loan Organization

Our Army was our first line in the war against Germany. Our second line of offense and defense was the Navy, and behind both stood another line without which neither the Army nor the Navy could have "carried on." This third force was the greatest unit ever marshalled in the history of this or any other country--the Liberty Loan Army. Before a man in the United States uniform entered a trench, before the first depth bomb had been dropped on a U-boat, this Army, which finally carried a roster of 22,777,680 names, had entered the war.

Think of it! One person in every five in the immense population was in the war!

True, their contribution to the eventual triumph of our arms was measured in dollars while that of the men at the front or on the seas was in lives or limbs. Yet it is a fact that dollars were as powerful relatively as men in bringing the Boche to bay.

Various causes have been given to account for the startlingly sudden collapse of the Kaiser's army. Some say that the Allies' superior military strategy brought it to its knees. Others contend that success against the U-boats broke it down. Both are partly right, for each helped to undermine the German morale. But however great the contribution of both was, it is safe to say that the front presented by the Liberty Loan Army was a vital factor. The belated German consciousness that the United States as a whole was in the war, as tangibly represented in the strength of the Liberty Loan Army, helped to shatter the Germans' will to victory. As much as the men in khaki or in blue, this gigantic unit bore in upon his mind as an unyielding opponent. He understood the futility of trying to defeat a people that enlisted against him to the number of 22,777,680 at home, 4,000,000 in the field and 300,000 on the water.

THE SPIRIT BEHIND THE DOLLAR

There is another angle to this important element of morale. In inverse ratio to the weakening of the spirit of the Germans against this resistless body there came a daily strengthening of the morale of our own men and those of the Allies through this manifestation at home. Where there are two opposing wills to victory in the field, the one that has the greater backing at home is certain to overwhelm the other.

It was not the dollar that won the war, it was the spirit behind the dollar. Before Prince Max asked for the armistice he had learned that $9,978,835,800 had been subscribed in this country toward his defeat. It is natural to assume that this fact did not impress him so much as the related fact that millions of persons had participated in the subscription.

Up to the end of the Fourth Loan, which coincided with the negotiations for the Armistice, $16,971,909,050 had been paid in and this helped to save life to an extent that we can only imagine. It was the confident expectation when the Americans halted the German onslaught at Château-Thierry that the end of the war would come in the following spring. None dared to hope that it would come before Christmas. When the crash came in November, even the Allied commanders were bewildered by its suddenness. Had the war been prolonged to the spring of 1919, it is certain that we would have paid a large toll in lives. Some have estimated that 100,000 more of our young men would have been sacrificed. That the war did not drag along for six months more may be ascribed in part to the effect that the demonstrated loyalty of the Liberty Loan Army had upon German morale. We know that the Germans fed lies to their own troops and dropped pamphlets with these same falsehoods into our own trenches. They tried to convince their own and our men that the Loans had no support.

MOBILIZING THE LIBERTY LOAN ARMY

When at 11 o'clock on November 11, 1918, peace dawned upon a war-sick world we had 2,000,000 men in Europe, and as many more on this side putting themselves in readiness to go across. On the seas we had close to 300,000 men. This tremendous force was welded into form in the nineteen months we were in the war. Yet within a few months after our entrance into the war there were more than this total in the Liberty Loan Army. The list of subscribers to the First Liberty Loan which closed two months after our entry had 4,500,000 names.

And this number remained for the duration of the war, giving every penny they could spare, mortgaging their property, committing themselves to personal privations. When the Second Loan books were totalled in November the number had increased to 9,500,000, and it leaped to 17,000,000 in the Third. In the Fourth--the last loan of war-time--it had grown to 22,777,680 and in the Fifth which closed six months after the armistice, it finished with 12,000,000 names.

As in the Army, where organization is half the battle, it was through organization of the enthusiasm and the deep fervor of the American people that success came in this big venture. We had to create a state of mind, we had to educate the American public in finance--which in itself appeared an insuperable task--we had to marshal resources on a scale such as never before had been attempted, and we had to map out a sales campaign that would comprehend millions of persons. There were no precedents to go by; the example set in Europe could not have application in the United States because of temperamental and financial differences; the flotation of the loans in the Civil War afforded no practicable working basis. It was pioneering, and this fact was made clear in the first conference held in Washington when Secretary of the Treasury William G. McAdoo called together the financial leaders of the country.

Only three weeks were allowed to prepare for the First Loan Drive. As soon as we had decided to get into the war, this decision carried with it the determination to go in to the limit of our resources. The Secretary of the Treasury informed the bankers that the first issue would be for $2,000,000,000 and this would be merely the forerunner of a succession of loans in larger amounts. The bonds were to be put on the market at three and a half percent. and the campaigns were to be conducted according to the territories of the Federal Reserve districts, twelve in all.

"It is quite likely," said the Secretary of the Treasury, "that we could induce a group of men to take up this loan but that would compromise the country before the world. We must sell to the public in such numbers that there shall exist no doubt among our enemies that our people are back of the Government as a unit in this war."

The men whom he addressed were all recognized as organizers, all had been identified with big business. However, few of them had had the general contact with the public so essential to popularizing the loan. They knew how to sell, but not in small denominations or to millions of purchasers. In an abstract sense they realized the value of advertising and newspaper publicity, but not one of them had the remotest idea of how the ideal of Secretary McAdoo could be realized.

ORGANIZING THE FIRST DRIVE

It was at this point that their resourcefulness came into play. Their first move was the right one; they engaged specialists to undertake the tasks of which they knew little. They addressed themselves to the public through men skilled in establishing such contacts as are given through advertising, publicity, and canvassing. In the brief time allotted to them, they barely had time to surround themselves with this trained talent.

Verily, it was shooting in the dark, a process of hit and miss. Some one said that the campaign in the First Loan was planned as we went along, and that is literally true. The patriotism was there--that was an unquestionable fact; the problem was to make it manifest itself in sacrifice of savings and earnings. The work of the whole three weeks was experimental and the country was the laboratory. Let it be said that the alchemy of patriotism transmuted the hearts and minds of the public into pure gold. Once the people were informed of their duty toward the United States they rallied instantly.

Newspapers turned over their columns, advertisers offered their precious space--and it was precious in those days of paper shortage; stores and banks opened booths for sales, public speakers cancelled every other engagement that they might participate, factories strove to enlist every person in their employment as purchasers, clubs responded in whole memberships, women's committees were formed for the acceleration of interest, churches consecrated themselves to the project, trade unions abandoned all differences with employers and allied themselves unselfishly, writers pleaded for a chance to exercise their influence, foreign language groups demanded opportunity to prove their Americanism, actors, singers, and lecturers begged for a place in the campaign.

Wholeheartedly and with utter disregard of personal sacrifice this vast aggregation committed itself to the task. The initial momentum gave the drive the force of an avalanche that swept everything else aside. There came times during this first drive when the issue seemed in doubt, but this was due more to an excess of enthusiasm than to a lack of support. When the totals were in, it was realized that these misgivings were due to the physical inability of the tabulators to keep abreast of the tide of subscriptions. The subscriptions went to $3,035,226,850.

It had been said that the first campaign in its directive agencies was largely hit and miss. When it was over the strikes were recorded and the misses eliminated for the preliminary work of the Second Loan which was to follow in October. Out of the mass was evolved a system of methods that served as the groundwork of the real organization. The results afforded a working basis that would have carried a dozen loans through, granting that the people remained faithful to their patriotism.

THE APPEAL

Let it be admitted that in the first loan there was no defined appeal. We were in the war and in to win, that was sufficient. It was foreseen that the psychology of the public must have a central theme for the next loan to which it must respond. The Second campaign began on October 1, 1917, after the embarkation of the nucleus of the vast army that eventually was to overwhelm the foe. None of them yet had been called into action. The keynote of this drive was the education of the people on the meaning of a German victory. We had before us the ghastly stories of what the Germans had done in Belgium and in France; we had to throw ourselves into the conflict to keep our own homes safe.

The eyes of all Europe, our Allies and our enemies, were upon us. It was clear that by the results at home we would be judged, as we had not yet had the opportunity to show ourselves in the field. For four weeks and a day the campaign went on, this time for $3,000,000,000. The appeal which touched the heartstrings of all persons served a double purpose. Not only did it carry the message of the Loan, but it knit closer the sentiment of the whole American people to the purposes of the war. Through its constant reiteration it had the effect of a prayer and like a prayer gained added meaning with deeper thought.

Thought was compelled through its manifold repetitions. All the functions of life were linked with it, all the recreations, all the relaxations embodied it in part. It formed the backbone of conversation, it became a part of every daily activity. It assailed the eye at every turn, it smote the ear constantly, it crashed into consciousnesses in every conceivable form. Through a strange paradox it linked a fear and a hope. It embraced the whole gamut of emotions.

GROWING RESPONSE

Again there was a resounding response. In the First Loan the subscriptions were limited to the actual amount of the issue, but in the Second all subscriptions were accepted. The number of those who took bonds was increased more than 100 percent.--it reached 9,500,000, to be exact, and the $3,000,000,000 issue went to $3,808,766,150.

So it was in the Third, which was put before the public on the anniversary of our entrance into the war. At this time our men had gone into the trenches which in itself made the war our own in its most serious meaning. This was intensified throughout the land by the operation of the Selective Service Act. The draft had entered almost every home; many of those who had qualified in the first call were at that time in France. Casualty lists were beginning to appear in the newspapers.

It needed only this fact--the fact in itself was its own appeal--to bring out the finest in our people. All previous sentiment faded into insignificance compared with the solemnity of the actual participation. The resources that we had been led to believe had been plumbed to their depths were now revealed to us as inexhaustible. Giving seemed to be the poorest means of showing how the country was touched; the people gave as if in despair because this was all they might do.

The campaign had been for $3,000,000,000 and it brought in returns of $4,170,069,650 from 17,000,000 men, women and children in the United States; men, who regretted that this was all they might give to their country's need; women, who offered with each dollar a passionate prayer that it might help the men now matching themselves against the foe, and children, who realized with joy that they were becoming part of the world's greatest war.

FOURTH LIBERTY LOAN

Before the Fourth Loan the Rolls of Honor in the daily newspapers were carrying a lengthening list of those who had paid the supreme sacrifice. In the training camps more and more hundreds of thousands of drafted men were preparing themselves to take their places on the line; the sea lanes were crowded with troopships, each bearing the best of our country away. There had been a depressing period when Ludendorff's men seemed to carry everything before them, when the coast ports of France seemed menaced, but before the bugle called the non-combatants at home to attention again our boys had turned the tide at Château-Thierry and now were in full cry after the fugitive enemy.

On September 27, 1918, the call for the Fourth Loan came and it seemed at the time as if it had been postponed too long because the foe was crumbling. President Wilson sounded the tocsin in the Metropolitan Opera House in New York City. This time the appeal was to drive home the finishing blows, to demonstrate to the crumbling empire of the Hohenzollerns that here was a people undivided and unafraid.

The campaign was carried through in a veritable ecstasy of delight. Where before there had been the spirit to give in order to wage the war to any length, here was the spirit to bring the end swiftly and splendidly, to crown the triumphs of our arms abroad with another triumph at home. In truth, the prospect of impending triumph at first almost defeated the need of a campaign. The enthusiasm during the period of the drive transcended everything ever seen in this country before. The result reflected it: In an issue of $6,000,000,000 there was an oversubscription of $933,073,250 and the total number was the 22,777,680 which will stand as the high mark of Americanism for many generations to come.

AROUSING THE HALF-HEARTED

It has been set forth here that all appeals were based on arousing the emotions of the people. This was necessary because, had the offerings gone before the public solely on their practical value as investments, the results would have been considered abroad as another demonstration of our sordidness. Had the people of the United States been sordid, it is certain that they might have obtained better investment values. That they were not touched by selfish instincts is further proved by the fact that all through the drives the bonds of the previous issues had been quoted below par, due to the machinations of a group that never could be lifted above self-interest. The public, in full realization of this apparent depreciation, fought it out and showed their utter contempt for the manipulators by subscribing in greater force and for greater amounts to each subsequent issue.

It has been said before that the feeling of the public toward the war was made clear in the First Loan. It became the problem of the Second and the succeeding drives to organize enthusiasm so that through contagion the more resistant types might be affected. This compelled an organization of psychology. Back of each demonstration there were stage managers. These managers of psychology worked upon the public through the newspapers, through advertising, through "stunts," and generated a force of example which affected the whole community in which they were expressed.

For instance, a parade always has the effect of stirring people; feelings deep-hidden cannot be well concealed when, in war-time, marching men stride past. Unconsciously there comes to the mind of people the question: "What will become of these fine boys when they reach France?" There is the wish to help them, and the means to help them has been before their eyes for days in the Liberty Loan publicity. That is what is meant by stage management.

Through all the Loans it was necessary to manipulate the emotions first, to bring to the consciousness of the people in the news reports the facts and purposes of the loans; secondly, to carry the "urge" to them through the advertising; and thirdly to work upon their feelings through spectacles, meetings, aeroplane flights, sham battles, motion pictures of actual warfare, and like accelerants. It was necessary to infect them in the mass so that as individuals they might infect others with the fever to buy bonds.

All this work had to be carried through and was carried through with brilliant success in the four war-time loans. The Army, the Navy, the stage women's committees, police organizations, Boy Scouts, foreign language groups, all played a part. When the call came for the Fifth Loan, practically everything that had been done before had to be scrapped. It was all part of the war equipment and would help little in getting over another loan when people were striving with every fiber to get away from the thought and the sacrifices of the war.

"FINISH THE JOB"

We had to deal, then, with a people who were beginning to adjust themselves to peace, who were consoling themselves with the thought that they had done their part and should not be called upon again. It looked like a hopeless prospect from the vista presented at the close of the Fourth campaign to expect the same response for a peace campaign. The one optimistic fact that stood out was that the people had proved their patriotism, and such patriotism never dies. The Fifth Loan based its appeal solely upon patriotism's one expression in peace, duty.

"Finish the Job" was the slogan of the Fifth Loan. The country was told that the war was not ended until its debts were paid, that we should feel gratitude in the lives spared by its sudden end. The Liberty Loan workers had to create a new state of mind, to begin a new education--for this time the issue was in Victory notes instead of bonds--and to arouse the people to new emotions through spectacles, parades and other features. It may be mentioned here that the greatest parade of the entire war was held in New York in this Fifth Loan, when the different branches of the army showed in procession the men and weapons they had employed to win victory.

The call was for $4,500,000,000 and the answer was subscribed in notes by 12,000,000 persons, who paid in $5,249,908,300.

WAR SAVINGS CAMPAIGN

In between the drives there was a lesser drive constantly carried on among people who were not able to participate in bond buying. This was the War Savings campaign which was a part of the Government Loan enterprise. Newsboys, bootblacks, shop-girls, clerks and others who had been unable to participate in the Loan drives or who wanted to prove again their devotion to their country answered this appeal. In these savings there was collected for the country up to the date of the armistice $932,339,000 and the number of persons hoarding in small sums was far beyond a million.

LIBERTY LOAN FIGURES Entire Country | | | No. of Quota |Am't Subscribed| Allotted |Subscribers First Loan |$ 2,000,000,000|$ 3,035,226,850|$ 2,000,000,000| 4,500,000 Second Loan| 3,000,000,000| 4,617,532,300| 3,808,766,150| 9,500,000 Third Loan | 3,000,000,000| 4,170,069,650| 4,170,069,650|17,000,000 Fourth Loan| 6,000,000,000| 6,993,073,250| 6,993,073,250|22,777,680 Fifth Loan | 4,500,000,000| 5,249,908,300| 4,500,000,000|12,000,000 +---------------+---------------+---------------+---------- Totals | 18,500,000,000|$24,065,810,350|$21,471,909,050|65,777,680

Federal Reserve District of New York

First Loan |$ 600,000,000|$ 1,191,992,100|$ 617,831,650| 978,959 Second Loan| 900,000,000| 1,550,453,500| 1,164,366,950| 2,259,151 Third Loan | 900,000,000| 1,115,243,650| 1,115,243,650| 3,046,929 Fourth Loan| 1,800,000,000| 2,044,901,750| 2,044,901,750| 3,604,101 Fifth Loan | 1,350,000,000| 1,762,684,900| 1,318,098,450| 2,484,532 +---------------+---------------+---------------+---------- Totals |$ 5,550,000,000|$ 7,665,275,900|$ 6,260,442,450|12,373,672

BENEFITS DERIVED FROM LOAN CAMPAIGNS

The benefits derived from the Loan campaigns were many. Prominent among them was the growth of thrift among the American people. The growth of this habit will be an important factor in the future greatness of this country.

A lasting monument to the war spirit of those who had to stay at home is the fact that more than a million persons, men, women and children, were engaged actively in the promotion of the five loans. In other words, one person in every hundred in the United States was a part of the organization, and each induced twenty other persons in that hundred to buy bonds. This colossal force did not work in haphazard fashion nor scatter its energy but acted under a definite plan of campaign in which each had an assigned part and in which each worked according to a method that would avoid duplication or extra expense.

The five campaigns which united such an aggregation of workers and which produced such remarkable results were carried forward with a minimum of expense. Never before in the history of finance had such widespread exploitation been accomplished at so low a cost. Of the million workers all but a small nucleus were volunteers; the resources of the country were thrown open to the organizers with unexampled prodigality, mediums of flotation in a veritable flood being contributed without cost to the officers in the Liberty Loan Army.

A single purpose animated the whole nation. Party lines, race prejudice, creed distinctions, social barriers, all were wiped out in these loan drives. The whole country formed itself into an All-American team that rushed onward irresistibly. The closest approximation to a common brotherhood had been achieved. War, with its terrible losses, with its impairment of lusty young men, with its heartbreaks and agonies, surely had not been waged in vain when it brought about such a unity.

The United States in waging the war for democracy had won that democracy for herself at home.

VIII--FOOD AND THE WAR

How Scientific Control and Voluntary Food-Saving Kept Belgium from Starving and Enabled the Allies to Avert Famine

By VERNON KELLOGG

Member of the Commission for the Relief of Belgium

America was made familiar with a slogan during 1917 and 1918 which declared that "Food Will Win the War." The European Allies became familiar from the very beginning of the war with the fact that without much more food than they could count on from their own resources they could not hope to win the war. And it became equally obvious to Germany and her associates that if their normal food resources were materially impaired they also could not hope to win the war.

So there arose almost from the beginning of the great military struggle an equally great struggle to get food and to keep food from being got. The Allies, devoting their manpower to fighting and munitions-making, saw their farms doomed to neglect and their food reduction doomed to lessen. And they began their call on America for food in such quantities as America had never dreamed of exporting before. In the last years before the war we had been sending about five million tons of foodstuffs a year to Europe. In 1918 we sent over fourteen million tons. Also the Allies began trying, by their blockade, to prevent the Central Empires from adding to their own inevitably lessened native production by importations from without.

On the other hand, Germany and her associates began to husband carefully their internal food supplies by instituting a rigid, or would-be rigid, control of internal marketing and consumption, and to collect from any outside sources still accessible to them, such as the contiguous neutral lands, whatever food was possible. Also they had strong hopes of preventing, by their submarine warfare, the provisioning of the Allies from America and other overseas sources.

Thus, from the beginning of the war, and all through its long course, food supply and food control were of the most vital importance. If our epigrammatic slogan, "Food Will Win the War," was, like most epigrams, not literally true, it was, nevertheless, literally true that there was always possible to either side the loss of the war through lack of food, and it is literally true that the food victory of the Allies was a great element in the final war victory. Germany's military defeat was partly due to food defeat, and if a military decision had not been reached in the fall of 1918, Germany would have lost the war in the spring of 1919 anyway from lack of food and raw materials.

ECONOMIC SELF-SUFFICIENCY

The great struggle for food supply and food control involved so many and such complex undertakings that it is hopeless to attempt a detailed account of it in any space short of a huge volume. Yet the very limitations of the present discussion may have its advantages in compelling us to concentrate our attention on the most important aspects of the struggle and to try to sum up the most important results of it. Some of these at least should not be forgotten, for they have a bearing on the peace-time food problem as well as the war-time one. Fortunately the war-time food situation has developed in us a national and an individual food consciousness that will certainly not disappear in this generation at least.

The first important lesson that has been learned is that it is of great value to a nation to be able to provide in its own land its own necessary food supply. For although in times of peace and usual harvests international food exchanges enable a country, such as England or Belgium, highly industrialized and of large population in proportion to area, to make up without much difficulty its deficit as between production and consumption, the moment the great emergency arrives there is the utmost danger for its people. The history of the "relief of Belgium" during the war will illustrate this.

$600,000,000 WORTH OF FOOD SUPPLIED

This little country, famous through all past history as a battleground and now famous for all future time for its heroic and pathetic rôle in the World War, found itself at the very beginning of the war faced with a food problem that seemed at first insoluble, and which, if not solved, meant starvation for its people. It is a country highly industrialized, and with an agriculture which, though more highly developed as to method than that of almost any other country, was yet capable of providing but little more than a third of the food necessary to its people. It depended for its very life on a steady inflow of food from outside sources. But with its invasion and occupation by the Germans this inflow was immediately and completely shut off. Belgium was enclosed in a ring of steel. What food it possessed inside this ring disappeared rapidly.

The terrible situation was met in a way of which Americans may be proud. For the Commission for the Relief of Belgium, which was the agency that solved Belgium's great problem, was an American organization with a staff composed chiefly of young Americans, most of them from American colleges and universities, headed by an American, Herbert Hoover, of great organizing and diplomatic genius, and with the large heart of a world philanthropist. In the four and a half years from November 1, 1914, to May 1, 1919, which was the period of activity of the Commission, Belgium depended upon it for the supplying of three-fourths of the food of its people, over seven million in number. This amounted to about one million tons a year. In addition, the Commission supplied the food through practically all this period for the maintenance of the nearly two million unfortunate people in the German-occupied area of France. This amounted to a total of about one million tons. The total value of the food supplied to Belgium and occupied France was about six hundred million dollars, which was provided by the Governments of Belgium, France, England, and America, and the private charity of the world.

THE FOOD PRODUCTION OF GERMANY

For another impressive war-time food problem--which did not have the same solution as Belgium's--let us take that of Germany. In peace times the Germans produce about 80 percent. of the total food annually consumed by them. But their tremendous military effort necessarily entailed some reduction in their capacity for food production, although they also made a tremendous effort to stimulate and direct into most effective channels the native production of food.

Although it is true, as already stated, that Germany normally produces about 80 percent. of her food needs, making it seem possible for the nation to meet the blockade emergency by repressing consumption by 10 per cent. and increasing production by 10 per cent. this does not mean that they normally produce 80 per cent. of each kind of food consumed by them. As a matter of fact, they produce more than their total needs of certain kinds of food, as sugar, for example, and less than 80 per cent. of certain other kinds. And while there is a possibility of substituting, within certain limits, one kind of food for another, so that a shortage of wheat might be made up by an abundance of rye, or a shortage of bread-grains in general be made up, in some degree, by increasing the ration of potatoes, if they are available, this substitution cannot go to the extent of substituting pure carbo-hydrate or starchy foods like potatoes, which simply produce heat or energy for the body, for the protein foods like meat, fish, eggs and dairy products which produce not only energy but new tissues. A child must have protein food in order to grow; an adult must have it in order to replace the tissues worn out by daily work. Also, there are certain peculiar and so far little understood elements, called vitamines, found only in certain kinds of food, notably fats, milk and the green vegetables, which are essential to the proper metabolism of the body.

GERMANY'S FOOD PROBLEM

Now in the light of these needs for proper feeding, and in the light of the special conditions produced by the war, what was Germany's food problem through the war? It was that of attempting to increase production when the men and work animals had been sent to the fighting lines, of repressing consumption when both men in the army and the men in the war factories had to be well fed in order to fight well and work well, of attempting to get in food from outside the country when a blockade was steadily closing the borders ever and ever more tightly, and finally, of trying to get the people to modify their food habits in the way of accepting substitutes and using strange new semi-artificial foods in place of the familiar staples.

In 1916 the potato crop of Germany was a failure--but the turnip crop was enormous. So turnips were substituted largely for potatoes, and for many other kinds of food as well. Even marmalade and coffee substitutes were made from them, and turnip meal was mixed in the already too coarse and too much mixed flour. The Germans will never forget that terrible _kohl-rüben zeit_, or turnip time, of late 1916 and early 1917. And it was just after this time that the effects of Germany's great food difficulties began to show in a really serious way; they began to undermine the strength and health of the people. Those diseases like tuberculosis, which can rest in incipient or suppressed form for years without becoming serious as long as the body is well nourished, began to develop rapidly and dangerously. The birth rate decreased and the death rate increased. The physical and mental and moral tone of the whole nation dropped.

THE SUGAR SHORTAGE

Belgium and Germany illustrate a special food situation created by the war, namely, one in which a country, which relied on outside sources for a greater or lesser part of its food needs, had access to these sources suddenly and almost completely shut off. But grave food problems also confronted the countries which were not blockaded in so specific a way. England and France, with full access to all the great food-producing lands overseas (except to the extent that the submarines reduced this freedom of access), nevertheless had food problems hardly less serious than those of the more strictly blockaded countries. Their difficulties arose primarily from the fact that there was only so much shipping in the world and that the war conditions created suddenly a need for much more shipping than existed. The transference of large numbers of troops with their necessary equipment and munitions from the distant colonies to the European seat of fighting, and of other numbers from the mother countries to extra-European battlegrounds, made great demands on the shipping available to these nations. At the same time, the reduction of their native production increased largely their needs of food importations.

Take, for example, the case of the sugar supply for England and France. England is accustomed to use about 2,000,000 tons of sugar a year but she does not produce, at home, a single ton. She had relied before the war chiefly on importations from Germany and Austria with some little from Belgium and France. But with the outbreak of the war, she could get none from the Central Empires, and none from Belgium, while France, instead of being able to export sugar, suddenly found herself with her principal sugar-producing region invaded by the Germans and able to produce hardly a third of her former output. In fact, France herself was suddenly placed in the position of needing to import nearly two-thirds of the supply needed for her own consumption. So England and France had to turn to Cuba, the nearest great sugar-producing country, and ask for large quantities of her output. But the United States has always depended on Cuba for a large part of its own needs. Consequently there was a sugar problem for our own country as well as for England and France long before we entered the war.

The situation was serious; the demands on Cuba were much larger than she could meet, although she was able under this stimulation of demand to increase materially her sugar crop in the years following the first of the war. One way of meeting this problem, which was promptly resorted to, was to cut down the consumption of sugar in the countries involved. In England and France sugar was strictly rationed; and in America the people were called on to limit their use of sugar by voluntary agreement. England cut her sugar allowance per capita from about seven and a half pounds a month to two, and France from nearly four to one. In America we reduced our per capita consumption by legally restricting the making of soft drinks and candy and by the voluntary restriction of the home use of sugar by about one-half. All this lessened the demand on Cuba, and also the demand on shipping.

NATIONAL TASTES IN FOOD

In this discussion of the war-time sugar problem one may be struck by the fact, as noted, that the people of France were normally accustomed to eat much less sugar than the people of England, indeed only about one-half as much. This introduces a subject of importance in any general discussion of the world food problem. It is that of the varying food habits of different peoples, even peoples living under very similar climatic and general physical conditions. For example, the people of Germany are accustomed to eat twice as many potatoes as the people of England, who in turn use more than three times as many as the people of Italy. On the other hand, England uses twice as much sugar as Germany, although she produces no sugar and Germany produces much sugar. The Italians eat only a third as much meat as the English and the French only half as much. But the English eat only two-thirds as much bread as the French.

These differences in food use, established by long custom, have to be taken into account in all considerations of the world's food supply. They are differences which cannot be easily or quickly changed, even under circumstances which such great emergencies as war may produce. For example, we in America are accustomed to eat corn as food in the form of green corn, corn meal, corn flakes, etc. And in Italy one of the great national dishes is _polenta_ (corn meal cooked in a certain way). But when the Commission for the Relief of Belgium tried to introduce corn as human food in Belgium, because of the large amount that could be obtained from America when wheat and rye were scarce, it met with great opposition and but little success. To the Belgians, corn is food for animals.

SCIENTIFIC CONTROL OF FOOD

An important point brought out by the war-time food problem is that of the "scientific" make-up of the personal ration. Not only are the national food habits of a people often difficult to understand from a point of view of taste, but they are often of such a character as to lead to a most uneconomical use of food. The exigencies of a world food shortage and a shortage of shipping for food transport have made it necessary for food ministries and relief organizations to give careful consideration to the most economical selection of foods for import and distribution, both from the point of view of economy of space and weight and lack of deterioration during shipping and storage, and from that of concentrated nutritional values and proper balancing of the ration.

Food provides energy for bodily work and maintenance. It is the fuel for the human machine. Scientific students of nutrition measure the amount of energy thus provided, or the amount needed by the body, in units termed calories. Physiologists have determined by experiment the different amounts of calories produced by different kinds of foods and the varying amounts needed by men at rest, at light work, at hard work, by women and by children. By analyzing the make-up of a given population as to proportions of men, women and children, and of work done by them, it is possible to express the total food needs of the population in calories and to arrange for the most economical provision of the total calories necessary.

But the simple provision of the total sum of calories may by no means satisfy the real food needs of the population. For example, all the calories might be provided by potatoes alone, or grains alone, or meat or fats alone. But the population would starve under such circumstances. Food provides not merely the energy for the body, but the substances from which the body adds new tissue to itself during growth and reproduces its constantly breaking down tissues during all of life. Now while all kinds of food produce energy in greater or less quantity, only certain kinds are the source of new tissues. Hence there must be in the personal or national ration a sufficient proportion of the tissue-producing foods, the protein carriers, as well as a sufficient amount of the more strictly energy-producing foods, such as the fats and carbohydrates. And there is necessary, too, in any ration capable of maintaining the body in properly healthy condition, the presence in it, in very small quantities, of certain food substances called vitamines which have an important regulatory effect on the functioning of the body. These substances occur only in certain kinds of food.

All these things had to be taken into account in the war-time handling of food. So important was a proper knowledge of scientific food use and application of this knowledge, in connection with the efforts of the various countries to feed themselves most economically and to best effect in the light of their possibilities in the way of food supply, that every country concerned called on its scientific men to advise and help control the obtaining and distribution of its national food supply. For example, America and the Allies (England, France, Belgium and Italy) established an Inter-Allied Scientific Food Commission composed of experts who met at various times at London, Paris, and Rome, and on whose advice the determination, both as to kind and quantity, of the necessary importations of food from overseas to England, France, Belgium and Italy was largely made. Thus the war has done more to popularize the scientific knowledge of food, and to put into practice a scientific control of food-use than all the efforts of colleges and scientific societies and food reform apostles for years and years before. Calories, proteins, carbohydrates, fats and vitamines have been taken out of the dictionary and put into the kitchen.

GOVERNMENT REGULATIONS

America's special relation to the world's war food problem was primarily that of a provider of the Allies, but in order to insure that this provision should be sufficient to keep the Allied soldiers and war workers up to full fighting and working strength and their families in full health, it was necessary for America to stimulate its own production, repress considerably its consumption and cut out all possible waste in food handling. To do this there was needed some form of governmental food control and a nation-wide voluntary effort of the people. Each of the Allied countries had established governmental food control early in the war under the direction of a "food controller" either attached to an already existing government department of agriculture or commerce, or acting as an independent food minister.

On the actual entrance of America into the war in 1917, governmental food control was vested in a "United States Food Administration" with powers given it by Congress to control all exports of food and all food-handling by millers, manufacturers, jobbers, wholesalers, and large retail dealers. But no retail dealer doing a business of less than $100,000 a year, nor any farmer or farmers' coöperative association came under the Food Administration's control. Thus the American food administration differed from that of most European countries in that it had no authority to fix the prices at which the actual producers should sell their products or the small retailers should charge the consumers.

But, indirectly, it was able to do, and did, a good deal in this direction. By its direct control of exports, and of the millers, manufacturers and large dealers, it was able to cut out a great part of the middleman profits, and reduce wholesale prices for most staple foodstuffs, especially that most important one, flour. By publicity of prices and by indirect pressure through the wholesaler it was also able to restrain the further sky-rocketing of retail prices.

NATION-WIDE FOOD SAVING

But if the Food Administration was limited in what it could effect by legal authority, there was no limit to what it could do by calling on the voluntary action of the people of the country, except by the possible refusal of the people to help. So there was set in movement a nation-wide propaganda for food-production and food-saving which resulted in the voluntary acceptance of wheatless and meatless days, voluntarily modified hotel and restaurant and dining-car meals, and the adoption of household pledges, taken by more than 12,000,000 American homes, to follow the Food Administration's suggestions for food-saving. All this, and the many other things which the Food Administration asked the people to do, and which the people did, resulted in accomplishing a very necessary thing. It enabled America not only to meet all those ever-increasing absolutely imperative calls of the Allies for food for their armies and people through 1917 and 1918, but to supply its own army and people sufficiently well to carry on the war effectively. The more food sunk by submarines, or prevented from coming to Europe from distant food sources, as Australia and Argentine and India, the more we provided by saving and increasing our production.

A few figures will illustrate the actual results of the call for food conservation. We entered the crop year of 1917 (July 1, 1917, to July 1, 1918), with a wheat supply which gave us only about 20,000,000 bushels available for export. By December 1, 1917, our surplus had gone overseas and an additional 36,000,000 bushels had been shipped to the Allies. In January we learned of the further imperative need of the Allies of 75,000,000 bushels. We responded by sending 85,000,000 bushels between the first of the year and the advent of the new crop. When the crop year ended we had sent in all about 136,000,000 bushels of wheat to Europe. We were assisted in these operations by the importation of 28,000,000 bushels of wheat from Australia and the Argentine to supplement our domestic supply, but the outstanding fact was the saving in our domestic consumption, most of which was accomplished in the six-months' period from January 1 to July 1, 1918.

AMERICAN RELIEF ADMINISTRATION

But the cessation of the war did not produce food for the war-ravaged countries of Europe. The newly liberated peoples of Central and Eastern Europe found themselves, at the time of the Armistice, facing a period of starvation until their 1918 harvest could come in. Something to save these peoples had to be done quickly and on a large scale. The situation was met by the establishment of a new American governmental organization called the American Relief Administration which, with Mr. Hoover as director-general, worked in connection with the Inter-Allied Supreme Economic Council. Representatives of the A. R. A. were sent at once into all the countries crying for help to find out the exact food situation, and to arrange with the respective governments for the immediate beginning of the importation and distribution of staple foodstuffs. Programs for a food supply sufficient to last until the 1919 harvest were determined on a basis of minimum necessity, and provision for sufficient shipping and rail transportation was arranged by international agreement.

Modern war has thrown the spotlight on food. It has partly realized that famous prophecy of the Polish economist, Jean Bloch, who wrote, twenty years ago: "That is the future of war, not fighting, but famine." In the World War of 1914--18 there was fighting on a scale never before reached, but there was also famine, as never before dreamed of.

IX THE HIGH COST OF LIVING

A Study of the Extraordinary Conditions Subsequent to the Armistice

By THE DIRECTOR OF THE COUNCIL OF NATIONAL DEFENSE

On August 9, 1919, Grosvenor B. Clarkson, Director of the Council of National defense, submitted to the Secretary of War, a report entitled "An Analysis of the High Cost of Living Problem." This report was the result of much careful study and investigation. It is non-academic in form and by omitting details presents a "panoramic view of the problem." It laid chief stress upon conditions since the armistice.

In the report the problem of the high cost of living is viewed as a permanent one. It was, in other words, not peculiar to past war conditions. Careful investigation by the Council has resulted in the following analysis of the problem.

THE ESSENCE OF THE HIGH COST OF LIVING SITUATION

"1. The only complaints of the high cost of living which have justification are those which are based upon inability of the present income to maintain previous or reasonable standards of living at present prices--such well-founded complaints mean that increase of income has not kept pace with increased cost of living, and therefore imply enforced reduction in standards of living.

AMERICA'S PRODUCTIVE CAPACITY

"2. America's industrial and economic achievements during the war, notwithstanding depleted man power and diversion of productive effort to war purposes, demonstrate the ample ability of the Nation to sustain its population according to a standard of living equal to or above standards of living which obtained previous to or during the war.

"3. The fundamental basis for the maintenance of national standards of living is adequate production, economical distribution, and fair apportionment among the various economic groups which constitute our society. With the exception of agricultural activity, production since the armistice has shown evidence of curtailment, and has in general been abnormally low. Normal consumption can not continue unless an adequate rate of production is maintained.

FOOD SITUATION AND READJUSTMENT

"4. Food production and the facilities for food production were improved rather than injured during the war. Moreover, the program with respect to food production since the signing of the armistice has been one of vigorous expansion of the means of providing raw food products. The actual consumption of wheat, as shown by the Grain Corporation's report of May 25, 1919, had for the previous ten months averaged 37,700,000 bushels per month, as against 39,000,000 bushels for the previous twelve months. This does not necessarily imply reduced consumption of cereals.

"The number of cattle slaughtered in the period January to May, 1919, was 3,803,000, as against 4,204,000 for the corresponding period of 1918, though the national reserve of cattle on farms had increased during the war. The swine slaughtered January to May increased from 18,260,000 in 1918 to 20,500,000 in 1919.

CLOTHING SITUATION

"5. The production of civilian cloths and clothing suffered some reduction during the war, and has suffered heavy curtailment for many months since the signing of the armistice.

"Boot and shoe production for civilian use was unfavorably affected by the war and has likewise undergone extreme curtailment since the signing of the armistice.

HOUSING PROBLEM

"6. Housing facilities developed acute shortage through curtailment of building during the war and, due to curtailment, for many months following the armistice, of the production of building material and of building construction, housing is still far below normal. Rents continue to rise.

PROVISION OF NEW CAPITAL

"7. The first half of 1919 shows diminished production of raw materials and subnormal construction of new capital, and thus indicates failure to utilize an adequate proportion of our productive forces in the preliminary processes of provision to meet future requirements. In fact, due to business uncertainty and hesitation and tendencies to disagreement between productive groups, retailers, wholesalers, manufacturers, labor, etc., there ensued after the armistice a disuse of a large proportion of America's productive capacity. Unless this slump in production is atoned for by consistent future activity, and unless production is constantly maintained on an adequate scale, reduced standards of living will become inescapable, regardless of prices, whether they rise or fall.

"8. The very fact that prices of finished commodities, consumption goods, so called, have risen to an extent out of proportion to the rise in prices of raw materials and perhaps out of proportion to the rise in general wages, indicates that production and distribution carried on under these conditions is, in general, yielding profits abnormally high."

In corroboration of the preceding analysis, the report cites statistical data gathered from various sources. The relation of currency and credit to prices is admirably epitomized in the following extract:

CURRENCY AND CREDIT

"The manner in which the volume of circulating credit and currency is related to the war-time rise in prices is about as follows:

"The outbreak of the war brought to America urgent government orders for munitions and supplies. Inasmuch as the belligerent governments could not brook delay they were obliged to pay the increased prices which American producers found it possible to demand, and thus the wave of war prices was started in America. When America entered the war it required, in order to perform its part, almost boundless quantities of equipment and man power. Producers naturally took advantage of the extremely urgent character of these demands in order to increase their prices, and, as a natural sequence, wages began to advance. These increased prices and wages of course necessitated larger expenditures by the government.

"Increased prices also necessitate the employment of larger funds in the conduct of a business. A larger volume of credit is required at higher prices to take care of bills for raw materials, and more money is necessary to meet increased payrolls. As a consequence, therefore, of increased prices, business men required increased credit if they were to avoid curtailment of operations and reduced production. Due to higher prices, therefore, the banks were under the necessity of meeting the business demand for expansion of credit."

INFLATION

The inflation process is described as follows:

"In pre-war times every dollar finding its way to the market was supposedly the counterpart of some commodity or part of a commodity also appearing in the market. Funds expended for the purchase of food, clothing, and for the payment of rentals were assumed to have been earned by some productive contribution to the general supply of commodities. With the outbreak of war there began to appear in the market, funds derived from wages, profits, etc., which had been paid out in connection with nonproductive activities of war, and which therefore implied no corresponding contribution to the market supply of commodities. The producers of, and the dealers in, the decreased quantity of commodities brought to market increased the prices of these commodities to the point where they might absorb all the purchase money that became available. These increased prices and wages have required increased circulating medium. This requirement has been met primarily by increased credit and the increased use of bank checks as an instrument of payment. As to the currency situation, the total money in the United States in 1900 amounted to $2,340,000,000. According to a statement issued by Governor W. P. G. Harding, of the Federal Reserve Board, the amount of money in circulation has varied during the last five years as follows:

July 1, 1914, $3,419,108,368, or $34.53 per capita. April 1, 1917, $4,100,976,000, or $37.88 per capita. December 1, 1918, $5,129,985,000, or $48.13 per capita. August 1, 1919, $4,796,890,000, or $45.16 per capita.

"This shows an increase during our war period of $7.28 per capita. The amount of money in the Treasury and in Federal Reserve Banks is not in circulation, and is, therefore not included in the figures quoted from Governor Harding's statement.

"In regard to the part played by national credit in meeting the situation growing out of the extraordinary requirements of the government and the rise in prices which the urgency of demands made possible, it is to be noted that government bonds had to be sold to pay for a large proportion of the goods which war activities were consuming. In consequence the national debt up to August 1, 1919, had been increased by $24,518,000,000, or approximately $230 per capita. Of course, government bonds are always good security for bank credit."

FOOD SUPPLY--WHEAT, CORN AND SUGAR

Despite the fact that we sent large shipments of food to our Allies, our supply at the close of the war was not seriously diminished. The 1919 crop, while not expected to be large, was amply sufficient to prevent a real shortage. This is supported by the following extract from Mr. Clarkson's report:

"The wheat crop for 1918 amounted to 917,000,000 bushels, as compared to an average for 1910--14 of 728,000,000 bushels; and the probable harvest in 1919 is 1,236,000,000 bushels. Our supply of wheat in elevators, mills, etc., on May 9, 1919, was 96,000,000 bushels, as against 34,000,000 bushels the year before. Our flour mills, whose capacity is estimated at something like double their usual output, were milling week by week during 1919 considerably more flour than the year before. They produced for the week ending May 9, 1919, for example, 2,553,000 barrels as against 1,569,000 barrels for the corresponding week of 1918. Notwithstanding large exports, our wheat supply is obviously adequate. In 1918, a record year, we exported 21,000,000 barrels of flour. In 1915 our wheat exports reached their maximum--206,000,000 bushels.

"The corn crop of 1918 was likewise sufficient. The supply of corn on hand on May 1, 1919, was 23,000,000 bushels, as compared with 16,000,000 bushels May 1, 1918, and 7,000,000 bushels on May 1 of both 1917 and 1913. Though the 1919 corn crop is not expected to be unusually large, there is no prospect of real shortage. And the situation with respect to the other cereals is generally very good.

"The sugar industry of the United States passed through the period of the war with a tendency to increased production, notwithstanding shipping difficulties. Though present stocks are somewhat low in the United States, our exports during 1919 have been unusually large. The future is normally provided for."

THE MEAT SUPPLY

The meat situation is described as follows:

"America emerged from the war producing meat at a rate far above pre-war figures, and yet possessing in reserve a larger number of animals on the farms than we had before the heavy war drafts upon our supplies began. The number of cattle slaughtered in 1918 was 11,000,000, as compared with 6,978,000 in 1913. Swine slaughtered were 41,214,000 in 1918 and 34,163,000 in 1913. The cattle slaughtered in 1919, January--May, were 3,803,000, as against 4,204,000, January--May, 1918. The swine slaughtered January--May, 1919, made an increase over the 1918 record, the figures being 20,500,000 for the present year, as against 18,260,000 for the corresponding interval last year. Although exports of hams and shoulders for 1918 approximately doubled previous records, amounting to 518,000,000 pounds, as against 172,000,000 pounds for 1913, and exports have continued large during 1919, there is no doubt that our productive capacity is vastly more than ample to meet our requirements."

HIGH PRICE OF FOOD

In view of the apparent abundance of food it is interesting to know the reason for the high price of foodstuffs. The Council of National Defense is of the opinion that the probability that the production of garden products in war gardens had fallen far below that of 1918, when, it is estimated, to have reached the value of $525,000,000, would not account for the high prices. Exportation and storage had not depleted our stock sufficiently to affect prices abnormally. In regard to the question of exports the report gives the following illuminating figures:

"Present food prices are not to be accounted for largely on the basis of heavy exports. Exports of beef, canned, fresh, and pickled, for example, have been less for 1919 than in the previous year, the quantity amounting to 23,499,000 pounds in May, 1919, as compared with 82,787,000 pounds in May, 1918. The May figures for exports of hog products show 125,937,000 pounds in 1919, as against 201,279,000 pounds in May, 1918. The monthly exports of beef and pork show a declining tendency during the first five months of 1919, contrary to the tendency in 1918, the total amounting to 1,090,000,000 pounds in 1919, as against 1,122,000,000 pounds for the corresponding period of 1918--less than the amount of all meats in cold storage on July 1, 1919, which was 1,336,000,000 pounds."

Concerning storage the same report states that:

"Even the fact that the report of goods in cold storage shows an increase of over 9 per cent. in the quantity of all meats held on July 1, 1919 (1,336,000,000 pounds), as compared with the figures for July 1, 1918, is, though very important, not a matter of significance for any considerable period of time. Storage poultry July 1, 1919, was 48,895,704 pounds, or 181 per cent. above last year; cheese, about 25 per cent.; butter, about 75 per cent.; and eggs, about 25 per cent. above July 1 last year. There was a decrease of frozen fish of about 13 per cent. from last year. Taken in connection with the evidence of relatively abundant reserves of live animals and large crops for the current year, it would seem that some relief from high prices of food should be possible."

WHY FOOD PRICES WERE HIGH

The explanation of the post-war high prices of food is given as follows:

"It is true that food is, by comparison, plentiful. But it is also true that money or other circulating medium is unprecedently plentiful. The fact that food prices are relatively high and that the prices of chemicals, metals, lumber, etc., are relatively low, though their supply is relatively small, may be due to a concentration of purchasing power upon food, and the general direction of the flow of currency toward the purchase of immediate consumables. Some relatively minor luxuries such as jewelry (and perhaps automobiles should also be included here as the semi-luxury of greater magnitude) find favor with purchasers, but the main trend of purchase seems to bear toward demand for the necessities of life now in a finished state or nearly so, with a relatively weaker tendency toward demand of capital goods. If the supply, and also the production, of raw materials has been relatively small, and if the prices at which they have exchanged have also been relatively low, it seems obvious that the proportionate amount of currency and credit engaged in their purchase must be abnormally small, thus accounting for the ability of the producers and purveyors of food to demand abnormally high prices regardless of the relative plentifulness of their goods."

CONDITIONS FAVORABLE TO PROFITEERING

"The conditions just described are highly favorable to both speculative profiteering and wasteful distribution, through the intervention of supernumerary middlemen and caterers. In fact, the statistics published by the New York Industrial Relations Commission seem to indicate an unusually large increase of persons engaging in certain kinds of salesmanship after the armistice. It should, however, be remembered that even though it may smack of profiteering to produce a very large crop and sell it at abnormally high prices, this is a kind of profiteering which deserves unstinted praise as compared with that other species of profiteering which deliberately reduces output in the expectation that the extortionate prices which the reduced product will command may more than make up to the producer or speculator for the portion of production withheld or the percentage of hoarded goods condemned to spoil and be lost to the nation."

OTHER COMMODITIES

The price of commodities other than foodstuffs was influenced in 1919 by the inadequacy of supply and the curtailment of production. This was especially true of woolens, as stated by the Council:

"The most obvious explanation of the high prices of woolens is the glaring fact of the extreme reduction in output which ensued after the signing of the armistice and the completion of Army orders, which practically ended in January, 1919.

"The war came to an end with the supply of civilian woolens unprecedentedly low. The total quantity of wool available for civilian fabrics between April and November, 1918, was probably somewhere in the neighborhood of 75,000,000 pounds, an amount perhaps a little more than sufficient to meet the demands of normal manufacture for civilian consumption for one and one-half months.

* * * * *

"In consequence of the general situation the total consumption of wool in manufacture during first five months of the year 1919 amounted to but little more than one-half the amount consumed during the corresponding months of the previous year. The proportion of looms, 50-inch reed space and over, idle increased from 21 per cent. in November, 1918, to 52 per cent. idle in February, 1919, and these looms were still 39 per cent. idle in May, 1919. Of worsted spindles, 27 per cent. were reported idle in December, 1918, and 52 per cent. idle in March, 1919, and 26 per cent. were still idle in May. In the meantime an extraordinary number of textile workers were condemned to idleness, their productive capacity perishing day by day and week by week, while the deficiency in the supply of clothing was developing to such a point that it became possible for the wholesale index number of the prices of cloths and clothing to rise to 250 in June."

The production of cotton and cotton goods also was far below normal. To quote again from the report:

"When the war ended the world's cotton supply was understood to be below normal. The supplies of cotton goods were also reported low. The acreage planted to cotton was in 1919 approximately 9 per cent. less than for 1918. The present prospects are that the cotton crop will be small, and published articles are appearing expressing gratification over the prospectively large commercial returns which the cotton producers may be able to command because of the high prices which may be had for the reduced cotton output. The forecast of the cotton crop for 1919 is 10,900,000 bales--about 10 per cent. below that of recent years and but little over two-thirds as large as the record crop of 1914."

"OUTPUT AND MORE OUTPUT" ABANDONED

"In regard to cotton manufacture, it may be recorded that the situation is less unsatisfactory than as regards wool manufacture. In this industry, as in most of our industries, the economic watchword of war-time, which was 'Output, and more output' (the necessary condition of full prosperity in peace, as well as of success during war), was not heard after the armistice. There soon developed, on the contrary, groundless doubts about future demand, and hints of unhealthy fears of 'overproduction.'

"Notwithstanding the release of labor, if it were needed, by demobilization, and notwithstanding adequate supplies of raw cotton to meet the season's requirements and the lack of any important difficulties in the way of reconversion to peace-time products, and with low supplies of finished goods in stock, the cotton industry kept more spindles idle during the first five months of 1919 than were idle during the corresponding period for 1918. The amount of cotton consumed in the United States during the nine months ending with April, 1919, was approximately 12 per cent. less than for the corresponding nine months of 1918. The prices of cloths and clothing, as above mentioned, show in June, 1919, an increase of 150 per cent. over 1913 prices."

The boot and show industry showed a marked decline after the signing of the armistice. This, too, was borne out by the investigations of the Council.

"The production of boots and shoes for the first quarter of 1919 was reported as about 60 per cent. below the production for the last quarter of 1918. Plants were partially closed and in some cases it is reported that machinery was returned to the Shoe Machinery Co. All in all, there were 75,000,000 less pairs of shoes produced in the first quarter of 1919 than in the last quarter of 1918.

"The census report shows a reduction of more than 25 per cent. in the output of civilian men's shoes in the quarter ending with March, 1919, as compared with production in the quarter ending with December, 1918, and nearly 25 per cent. reduction as compared with the quarter ending with September, 1918. The reduction in output of women's shoes amounted to approximately 30 and 25 per cent., respectively, in comprising corresponding periods. The reduction in the output of shoes for youths, boys and misses was even more marked."

COAL AND IRON

What has been said of the production of cotton and woolen goods applied equally to the mining of coal and to the output of iron and steel. During the war we increased our coal production. In 1918 it amounted to "685,000,000 short tons, almost 50 per cent. of the world's estimated output for that year. Production for 1913 was 571,000,000 short tons." The coal situation since the armistice is stated as follows:

"Coal, the source of a vast proportion of our industrial power as well as our chief source of heat and light, is a commodity the production of which is itself an index of our economic life. Coal output since the armistice has been greatly reduced, the weekly production of anthracite for the first half of 1919 being from 1,200,000 to 1,800,000 net tons, as against 1,800,000 net tons to 3,000,000 net tons for the corresponding period of 1918. Bituminous production was 9,147,000 net tons for a typical week in 1919, as against 12,491,000 net tons for the corresponding week in 1918. Coke production for the week ending June 28, 1919, amounted to only 287,000 net tons, as compared with 627,000 net tons for the week ending June 29, 1918. The total amount of coal produced up to July 5, 1919, was 261,000,000 long tons, as compared with 364,000,000 long tons for the corresponding period of 1918."

The production of iron and steel which was greatly stimulated by the war was allowed to decline as soon as the concentrated effort of the nation to win the war was abandoned. The resulting condition is succinctly described by the Council:

"The record of our after-war steel and iron output furnishes us with another warning that we have been neglecting to keep pace with the established American rate of industrial improvement and expansion and foresighted preparation for future requirements and progress.

"The iron and steel business was considerably stimulated by war-time requirements. There was a governmental agency whose business it was to for see the war needs and to place orders so that those productive forces which are wrapped up in the steel industry might be utilized to capacity. The steel industry's activity has, however, since the armistice greatly declined. Pig-iron production for April, 1919, was 82,607 tons per day, as against 109,607 tons in April, 1918. Birmingham properties are reported to have been working in April, 1919, at about 50 per cent. of the 1918 production. For the period January to May, 1919, pig-iron production was only 2,114,000 tons, as against 3,446,000 tons during the same period in 1918. Steel-ingot production fell in the spring of 1919 to lower figures than had been reached in more than two years. In fact, a regular decline in production was in evidence after December, 1918.

"The figures representing the unfilled orders of the United States Steel Corporation at the end of May, 1919, were smaller than they had been since 1915."

RECOMMENDATIONS

The Council summarized its findings and recommends remedial measures as follows:

"The findings of the Reconstruction Research Division Council of National Defense, indicate that the high cost of living is primarily due to curtailment in the production of nearly all commodities except raw food products, to hoarding of storage food products, to profiteering, conscious and unconscious, and to inflation of circulating credit. The findings indicate that the situation may be most advantageously met by:

"1. Stimulated production.

"2. Some readjustment of incomes to the basis of higher price levels.

"3. The repression of hoarding and profiteering.

"4. Improvement and standardization of methods and facilities for distributing and marketing goods.

"5. The perfecting of means of keeping the nation frequently, promptly, and adequately informed regarding probable national requirements and of current production and stocks of the more important commodities.

"The findings emphasize the fact that high standards of living can not be maintained upon a basis of reduced production, regardless of whether price levels be high or low."

_PART II_

I--THE PEACE CONFERENCE AT WORK

A Vivid Account from the Inside of the Machinery Which Produced the Peace Treaty. How the Crises with Japan, Italy and Belgium Were Averted

By THOMAS W. LAMONT

Financial and Economic Adviser at Paris to the American Commission to Negotiate Peace

When we finally gain an historic perspective of the work of the Peace Conference we shall realize that, instead of being unduly delayed, it was accomplished in an astonishingly brief period. The Treaty of Vienna, back in 1815, took eleven months, and the factors to be dealt with were nothing like so numerous nor so complex. The Paris Conference occupied only about six months, and the earlier weeks were largely given over to questions relating to the renewal of the Armistice, rather than to the actual framing of the Peace Treaty. The Treaty text itself--aside from the League of Nations Covenant--was whipped through in a little over three months; for the active work of the Commissions which were to draft the various chapters did not get under way until February 1st; and the Treaty was presented to the German delegates at Versailles on May 7th.

COVENANTS "OPENLY ARRIVED AT"

No adequate history of the Peace Conference can be written until years have elapsed--until it is possible, as it is not now possible, to make public a multitude of intimate details. Hundreds of important documents were woven into the completed text of the Treaty. Such documents must eventually be made available to the chroniclers of history, who must finally have access to the official records, so that in course of time they can acquaint the world with the details of those momentous conferences which were held among the Chiefs of State, where the ultimate decisions settling every important question were made. There have been complaints that the covenants of the Treaty were not as President Wilson had promised, "openly arrived at." In point of fact, as far as lay within the bounds of possibility, the covenants of the Treaty _were_ "openly arrived at," inasmuch as their essence was made public just as soon as an understanding upon them had been reached, and in many cases, long before the final agreement. Nothing was held back which the public had any legitimate interest in knowing. It would, of course, have been quite out of the question for the Chiefs of State to discuss in public all the highly delicate and complex situations which were bound to, and which did, arise at Paris. Every man of strong character and powerful conviction has a view of his own upon any given subject, and naturally maintains that view with vigor and tenacity--even at times, if he be bitterly opposed--with acrimony.

To take a familiar instance, it is an open secret that M. Clemenceau's first solution of the question of the Saar Basin did not at all suit President Wilson. Not unnaturally, M. Clemenceau simply wanted in effect to annex the Saar Basin, on the grounds that the Germans had destroyed the coal mines of Northern France. Mr. Wilson was in entire accord--to this extent, that France should, until her coal mines had been repaired, enjoy the entire output of the Saar coal fields; but to have France permanently annex the Basin was contrary to his profoundest convictions, as expressed in the well-known Fourteen Points.

In the course of the discussion between M. Clemenceau and Mr. Wilson, their ideas at the start being so divergent, vigorous views were undoubtedly expressed; quite possibly tart language was used, at any rate by the French Premier, who was feeling all the distress of German frightfulness and war weariness. But to what possible good end could the detail of such intimate conversations have been made public? I allude to the possible conversations on the Saar Basin not as an historical fact, but as an example of what might have taken place, and very likely did take place; and if such temporary disagreements existed on that question, undoubtedly, among so many Chiefs of State as were gathered together at Paris, they existed on others. But in all cases amicable and cordial agreements were finally reached.

Whenever agreements were even in sight, the press was informed; so that, when the Treaty of Peace and the summary of it finally came out, there were no surprises for the public. Every covenant, every clause, had been already foreshadowed and accurately pictured.

THE "BIG THREE"

Naturally, the question is often asked: Who were the peacemakers at Paris? Were they two or three powerful Chiefs of State? The answer is both "Yes" and "No." The final decision on every important matter lay in the hands of the so-called Big Four, and after Premier Orlando's defection and return to Italy, it narrowed down to the Big Triumvirate, Messrs. Wilson, Lloyd George, and Clemenceau. Yet while they made the final decisions, these were almost invariably based upon reports and opinions expressed to this trio, or to the quartet, by their advisers and experts. The actual text of the Treaty was, of course, written by the technicians, and there is hardly a phrase in the whole of it that can claim as its original author any one of the Chiefs of State. In every true sense, then, the Treaty of Peace has been the product, not of three men, not even of three-score, nor of three hundred, but of thousands; for quite aside from the official delegations at Paris, which comprised several hundred persons, we must remember that the data and the various suggested solutions on most of the questions had been canvassed at home for each delegation by large groups of office and technical experts.

Of course it sounds well to say that the Treaty was written by three men: the picture of those few Chiefs of State sitting in conference day after day is dramatic in the extreme. That is, I must confess, the picture which comes back oftenest to my mind. I see them today, as I saw them for months at Paris, sitting in that large but cosy salon in the house allotted to President Wilson on the Place des États Unis; for, by common consent, it was there that the Supreme Council finally held all its meetings. It is in that theatre, with the three or four Chiefs of State taking the leading rôles, that we saw the other characters in the great drama moving slowly on the stage, playing their parts, and then disappearing into the wings. Today it might be Paderewski, pleading with all his earnestness and sincerity, to have Danzig allotted to the sovereignty of Poland. To-morrow it might be Hymans, the Belgian Secretary for Foreign Affairs, begging that there should be a prompt realization of those pledges to Belgium, which Belgium felt had been made by all the Allies; or it might even be word brought by special aeroplane from the King of the Belgians at Brussels, with fresh and important instructions to his delegation in the matter of Reparation. Or it might be a group of the representatives of those newer nationalities, Czechoslovakia, Rumania, Jugoslavia, arguing some burning question of boundary rights. Or it might be the British shipping experts, maintaining that the captured German ships should be restored to the various Allies upon a basis dividing the ships _pro rata_ to the losses sustained by submarines, and contending against the American claim that the United States should have all the German ships finding lodgment in American harbors. Or it might be Herbert Hoover, that brilliant American, come to describe to the Big Four starvation conditions in Vienna, and to emphasize his belief that, enemy or no enemy, those conditions must be relieved or Bolshevism would march into Austria and directly on west until it reached France--and beyond.

THE PLACE OF MEETING

The stage for this world drama was originally set at the Ministry of War, behind the Chamber of Deputies and across the Seine; and here Premier Clemenceau--who, it will be remembered, was Minister of War as well as President of the Council of French Ministers--was the presiding genius. But eventually, as the result of an interesting trend of circumstances, the all important conferences took place at President Wilson's house.

The original theatre of operations at the War Ministry had been so large, and there was such an enormous chorus brought into play, that progress was interminably slow. There were usually present all five of the plenipotentiaries of each of the five great powers, including Japan, and very frequently Marshal Foch as well. His presence automatically commanded the attendance of the chief military experts of the other delegates. With the innumerable secretaries who had to attend the plenipotentiaries, with the interpreters and whatnot, the Supreme Council came to look like a legislative chamber, in the midst of which sat Clemenceau, presiding with his usual incisiveness. At such meetings progress could be made only upon rather formal matters which had been threshed out beforehand. When it came to a point of great delicacy, where the discussions could be only on a most intimate basis, it became quite impossible to "carry on." Nobody would feel like speaking out in meeting and calling the other fellow names--as was necessary at times in order to clear the atmosphere--if there were half a hundred other people around, to hear those names, and promptly to babble them to an expectant throng outside.

So finally the Supreme Council was boiled down to the four Chiefs of State, including Japan's representative on any questions not strictly confined to Western Europe; and the small Council began to meet alternately at Clemenceau's office in the War Ministry, at Mr. Lloyd George's house, and at Mr. Wilson's, which was just around the corner from the British Premier's. Then in March, shortly after President Wilson's second coming from the United States, he fell ill with the grippe. After a rather severe attack he was able to get on his feet again and to do business, but was warned by his vigilant friend and physician, Admiral Grayson, to keep within doors for a time. Mr. Lloyd George, M. Clemenceau, and Signor Orlando were glad to accommodate themselves to Mr. Wilson's necessities, and formed the habit of meeting regularly at his house. His large salon was much better adapted for these conferences than the room at Mr. Lloyd George's. So there it was they met during all the final weeks of the Conference, leading up to the very end.

A DESCRIPTION OF THE COUNCIL CHAMBER

In the middle of the salon, facing the row of windows looking out upon the Place, was a large yet most inviting fireplace. On the left of this, a little removed from it, President Wilson usually ensconced himself on a small sofa, where he made room for some one member of his delegation, whom, for the particular subject under discussion, he desired to have most available. On the other side of the fireplace sat Mr. Lloyd George in a rather high, old-fashioned chair of carved Italian maple, and at his left sat his experts. Opposite the fireplace, to the right of it, and about half-way across the room, sat M. Clemenceau, with such of his Ministers as he needed, and then between him and President Wilson was Signor Orlando with the Italians. This made a semi-circle around the fireplace, and whenever Viscount Chinda of the Japanese delegation was present, the circle was usually enlarged so as to give him a seat in the middle of it. Behind this first semi-circle was a second one, made up of secretaries and various technical experts, but the conference was always a limited one, and was not allowed to grow so large as to become unwieldy.

Directly in front of the fireplace, almost scorching his coat-tails, sat Professor Mantou, the official interpreter for the Big Four. Mantou is a Frenchman, Professor of French in the University of London, so he had a perfect mastery of both French and English, with a good working knowledge of Italian. Mantou was quite an extraordinary character, and the most vivid interpreter I have ever heard, or rather seen; for at times he entered into the spirit of the discussions more vigorously than the original actors. M. Clemenceau, for instance, might make a quiet, moderate statement, in French, of course; and when it became Mantou's time to interpret it into English, he would enliven and embellish it with his own unique gestures.

The Secretary of the Council was Sir Maurice Hankey, a British Army officer of great skill and tact, who had a marvelous aptitude for keeping everything straight, for taking perfectly adequate, and yet not too voluminous minutes, for seeing that no topic was left in the air without further reference, and in the last analysis, for holding the Chiefs of State with their noses to the grindstone. He knew French and Italian well, and was a distinct asset to the Council. I note that, in the honors and money-grants disbursed by Parliament to Marshal Haig, Admiral Beatty and others, Hankey received £25,000. Everybody who worked with him at Paris will be glad of this just recognition. I have described this Council Chamber in the President's house rather minutely because, as I have said, it formed the stage for all of the momentous decisions which went to make up the final peace settlement. At these conferences there was no formal presiding officer, but to President Wilson was usually accorded the courtesy of acting as moderator.

HOW THE TREATY WAS COMPOUNDED

What, then, is the Treaty? The answer is that it is a human document, a compound of all the qualities possessed by human beings at their best--and at their worst. People might expect a Treaty of Peace to be a formal, legal, mechanical sort of document; and undoubtedly an effort was made by some of the drafting lawyers, who bound all the different clauses together, to throw the Treaty into the mold of formality. But all the same, it is a compound quivering with human passion--virtue, entreaty, fear, sometimes rage, and above all, I believe, justice.

The reason fear enters into the Treaty must be manifest. Take, for instance, the case of France. France had lived under the German menace for half a century. Finally the sword of Damocles had fallen, and almost one-sixth of beautiful France had been laid waste. Her farms, her factories, her villages, had been destroyed; her women ravished and led captive; her children made homeless; her men folk killed. Do we realize that almost 60 per cent. of all the French soldiers under thirty-one years of age were killed in the war? Is it any wonder France could not believe that the German menace was gone forever, and that the world would never again allow German autocracy to overwhelm her? She could not believe it, and for that reason she felt it essential that the terms of the Treaty should be so severe as to leave Germany stripped for generations of any power to wage aggression against beautiful France. If her Allies pointed out that to cripple Germany economically was to make it impossible for Germany to repair the frightful damage she had wrought in France, France would in effect reply that this might be so, but never again could she endure such a menace as had threatened her eastern border for the previous half century. If certain of the Treaty clauses appear to some minds as unduly severe, it must be remembered that the Allies, little more than France, could bear the thought of letting Germany off so easily that within a few years she might again prepare for war.

There was fear, too, on the part of those new nations, which had been largely split off from the effete and outworn Austro-Hungarian Empire, that in some way their ancient oppressors would once more gain sway over them. And, every nation, great and small, was overshadowed with the constant terror of Bolshevism,--that dread specter which seemed to be stalking, with long strides, from eastern Europe west towards the Atlantic. Unless peace were hastened that evil might overtake all the Allies. Such apprehensions as these, far more than imperial ambition or greed, were factors in the Treaty decisions. Judgments that might take many months in the ripening could not with safety be awaited.

THE PROTECTION DEMANDED BY FRANCE

France, I say, was thoroughly shocked at the frightful fate which had come upon so great a portion of her land and population. She seemed to have real fear that out of the ground, or from the sky, or from the waters of the earth, at the waving of the devil's wand, there would spring into being a fresh German army, ready to overwhelm her. It was this fear that led France to ask for a special Treaty by which England and America would pledge themselves to come to her aid in case of Germany's unprovoked attack against her. Those Americans who object to this have no conception of the real terror in France which led her to entreat her two most powerful Allies to make such a special treaty with her. France maintained, and with some reason, that during the formative period of the League of Nations, before it might become an effective instrument, if she did not have the psychological and practical protection of England and America, she must look to her own defense, and the only real defense she could conceive was to make the Rhine her eastern boundary. This suggestion of Marshal Foch, based upon sound military concept, was rejected by President Wilson and Mr. Lloyd George on the theory that it would mean the annexation of German territory, would change Germany's ancient boundary line of the Rhine, and inevitably lead to future trouble.

"Very well," in effect answered M. Clemenceau, "we see your point, but if you will not allow us to fix this natural boundary for defense, then we must beg you to guarantee us by treaty your coöperation against German aggression. That coöperation you will never be called upon to render with military force, because if Germany knows you are pledged to come to our defense, that very fact will act as a complete deterrent to any aggression."

This was the sound reasoning which led President Wilson and Mr. Lloyd George to agree to submit respectively to Congress and Parliament this special French Treaty; this is the reasoning which ought to lead Congress, as it has led Parliament, to ratify the French Treaty promptly. My belief is that after five years, this special Treaty will be abrogated by mutual consent, because by that time the League of Nations will be built up into such an effective instrument for the prevention of future wars, any special treaties will be deemed unnecessary.

THE LEAGUE OF NATIONS COVENANT

If, in the foregoing paragraphs, I have given some idea as to how the Treaty of Peace was compounded, how it was made up of a mixture of virtue, selfishness, fear and justice, then perhaps I can proceed to describe briefly how the document was actually evolved. First, then, we deal with the drafting of the League of Nations Covenant:

The world has come to regard President Wilson as the special promoter and sponsor for the League of Nations. It is perfectly true that Mr. Wilson went to Paris with a fixed determination, above all else, to bring about some definite arrangement which would tend to prevent future wars. It is also true, however, that English statesmen had, for an even longer time than President Wilson, been giving this same subject earnest thought and study. Some of the more enlightened French statesmen, like Leon Bourgeois, had also been sketching out plans for a League of Free Nations. In England Viscount Grey of Falloden, England's really great Minister of Foreign Affairs for almost a decade prior to the war, the man who did everything that human intelligence and wisdom could devise to prevent the war, and now happily named as British Ambassador to the United States, had long worked for a League of Nations. Lord Robert Cecil, a worthy son of a noble father, was another British statesman who had given his mind to the same subject. General Smuts of South Africa, recently made Premier in succession to the late General Botha, was another. So that President Wilson, Colonel House, and the other delegates, upon their arrival in Paris, found themselves in a not uncongenial atmosphere. To be sure, on the part of Clemenceau and of course of the militarists, there was great scepticism. Nevertheless the French joined in, and early in January the Covenant for the League of Nations began to evolve. It was built up step by step, President Wilson taking a most active part in the work.

Finally the Covenant was adopted in a preliminary way and made public late in February. It was subject to amendment, and those who drafted the document welcomed amendments and urged that they be offered. An especial effort was made to secure suggestions from various Republican statesmen. No amendments, so far as I have been able to learn, were offered by any of the Republican Senators, but ex-President Taft suggested certain changes, some of which were adopted. President Lowell of Harvard contributed one or two which were taken over almost verbatim. Ex-Senator Elihu Root also made valuable suggestions, some of which were utilized in the final drafting of the Covenant, made public early in April.

ESSENCE AND SPIRIT OF THE LEAGUE

Roughly, as the situation developed, the purpose of the League of Nations became two-fold. The initial purpose, of course, was to set up the machinery for a body, representative of the nations, keeping in such close contact and guided by such general principles as would tend to make it impossible for one nation to begin war upon another. Elsewhere in this volume ex-Attorney General Wickersham has described in detail the clauses of the Covenant; but even in this brief allusion it is proper to set down the essence and spirit of the League. It is this: No two peoples, if they come to know each other and each other's motives sufficiently well, and if by certain machinery they are maintained in close personal and ideal contact, can conceivably fly at each other's throats. Now no machinery can be devised that will absolutely prevent war, but a carrying out of the spirit and principles set forth in the present Covenant ought to make war well-nigh impossible. The machinery that was thus set up at Paris was deemed at the time to be of course imperfect and subject to constant improvement.

The second purpose of the League was to act as the binder, and in a way, the administrative force of the present existing Treaty. That is to say, we found as time went on there were many situations so complex that human wisdom could not devise an immediate formula for their solution. Hence, it became necessary for the Peace Conference to establish certain machinery which, if necessary, should function over a series of years, and thus work out permanently the problems involved. Therefore, as it fell out, there were established under the Treaty, almost a score of Commissions, most of them to act under the general supervision of a League of Nations. Here, then, is another great function that the League of Nations is immediately called upon to fulfil.

WORK OF THE COMMISSIONS

With the Covenant of the League of Nations more or less complete, the next business of the Conference was the setting up of the Treaty proper. The method for this work was roughly as follows: About the first of February there was appointed a large number of special Commissions, made up of members of the various delegations. These Commissions, which were each to treat of separate topics, having arrived at a solution of the special subject, were then to draft their reports in such language that they could readily be embodied in the final Treaty of Peace itself. Thus, for instance, there was appointed a Commission on Reparations, a Commission on Economic Phases of the Treaty, a Commission on Finance, a Commission on Boundaries, a Commission on Military and Naval Armament, a Commission on German Colonies, a Commission on the Saar Basin Coal Fields, a Commission on Inland Waterways, and so on to the number of perhaps twenty. These Commissions immediately organized, and if the subject were particularly complex and many-sided, resolved themselves into sub-commissions. These sub-commissions in turn organized, each with its chairman and vice-chairman, its secretariat, and its interpreters, together with experts called into attendance.

DELAYS TO THE TREATY

The sittings of all these Commissions began, as I say, about February 1st, and at that time the plan was that the work of the Commissions should be concluded in the form of a report to the Supreme Council six weeks later, or about March 15th. The plan, further, was for the Supreme Council to pass upon these various reports, amend them if need be, and then have them drafted in such form as together would go to make up the Treaty, which, under this scheme, would be presented to the Germans on or about April 1st. The Germans would presumably sign within a fortnight, and we should all be going home about April 15th. As a matter of fact, the Germans signed the Treaty at Versailles at three o'clock on the afternoon of June 28th, two and one-half months later than the time originally planned.

This delay was, however, not at all unreasonable, if one stops to consider the number of questions involved, their magnitude, and the difficulty of dealing with them promptly. In the first place, each Commission was supposed to present the Supreme Council a unanimous report. The Council had ruled that the Commissions should not report by majority vote, for if in any given instance the majority overruled the minority, the minority might have such bitter complaint that there would be left in the situation the seed for future trouble. Therefore the Council determined that in the case of divergence of opinion in the same Commission, the two or more groups in the Commission should make separate reports to the Council, each having its own day in court. The Council would act as judges of the last resort, and no delegation would go away feeling that it had not had ample opportunity to present its case. Inevitable and sharp differences of opinion did arise, so that at least half the reports, I should say, as presented to the Big Four had to be thrashed out there in considerable detail.

The second handicap to rapid progress, of course, lay in the composition of the various Commissions. Each of the large five powers had to be represented on each Commission, and in most instances smaller powers also demanded representation. On some of the important Commissions the larger powers had two or more delegates sitting. Owing to the fact that Paris was full of influenza, each delegate had to have his alternate so as to keep the ball rolling. When they first met these delegates were not well acquainted with each other. They did not know how to get along together. It took weeks for them to shake down, so as to understand each other's methods and points of view; so as to be prepared to make the necessary give and take, certain meetings of views which are always essential where people are gathered from the four corners of the earth with a single aim, but with vastly different ideas for attaining it.

POLITICS AT THE CONFERENCE

Still another difficulty was the question of politics which could not be eliminated. It is easy enough to say, "cut out politics," but in any international gathering it is never possible to do it. I must say right here, however, that--as it seemed to me--the American delegation well-nigh attained that ideal, and be it to President Wilson's credit, I never once saw him throughout the length of the conference, "play" politics. But some of the other delegations naturally felt that at home there was a "list'ning senate" to applaud or to condemn, and many of these delegates, being members of their respective parliaments or ministries, naturally had their ear to the ground for the effect that their course at Paris was producing. Then if, at the sittings of a Commission, one delegate made a particularly eloquent speech, his fellow delegate might feel it incumbent upon him to make another equally long. Some of the delegates deemed it their duty to make an extended speech every day and seemed to feel that they were lacking in patriotism if they failed each morning to cover several pages of the record with their views.

THE DIFFICULTY OF LANGUAGE

Then the final difficulty, uniting with the other troubles to prevent rapid progress, was that of language. The Paris Conference was, of course, a regular Tower of Babel. There were two official languages--French and English. Each delegation used the language with which its delegates were most familiar, and every word uttered by those delegates had to be translated into the vernacular of the others. Not only did this interpretation consume a vast amount of time, but of course it frequently proved most unsatisfactory. Both the English and French languages are so idiomatic that the finer shades of meaning can never be well transmuted from one to the other. Hence, frequent and sometimes serious mistakes arose. For instance, a Serbian delegate who knew not a word of English would misunderstand something said by the British delegate, poorly translated into French. As the Serbian delegate's knowledge of French was also very limited he could not readily understand. So he would fly into a towering rage, and for an hour a heated argument would volley back and forth. Perhaps, at the end of that time, some cool-headed delegate (frequently an American), would point out that neither of the honorable delegates had any conception of what the other had said, and at bottom their views were precisely similar. Each of the competitors would then listen to reason, the situation would clear up, and things move on more happily.

I use here as an example a Serbian delegate, not that the Serbian delegates were more prone to passion than anybody else. We were all fighting like mad to make peace. We realized that though fundamentally we all had the same aim, yet as to methods our views were so divergent, that when we entered into conference at ten o'clock in the morning we should probably have one continuous struggle, with interludes for luncheon and dinner, until perhaps late in the evening. These struggles never ceased altogether, but as we got to know one another better, they of course let up materially, and we got on amicably and effectively.

THE COMMISSION ON REPARATIONS

No sketch of the Peace Conference, even one as cursory and superficial as this, could give any idea of the picture without a more detailed reference to the workings of some particular Commission that played an important part in the building up of the Peace Treaty. Hence I may be permitted to mention the Commission on Reparations. All things considered, this was perhaps the most important Commission at work.

The original Commission on Reparations was divided into three sub-commissions. Commission Number One was to determine upon what principles reparation should be demanded from Germany, that is to say, what items of damage should be included. In addition to physical damage inflicted by Germany upon the Allies, by reason of her aggression on land or sea, and from the air, should the cost of pensions for dead French soldiers be claimed? Was the entire cost of the war as waged by England, for instance, to be included as a charge against Germany? In other words, just what categories should be adopted in order to define Germany's liability?

This Commission Number One sat for weeks, and it was only towards the very end that it succeeded in establishing the categories. At the start there was a sharp divergence of opinion among the various delegations. The American delegation pointed out that under President Wilson's Fourteen Points costs of war would have to be excluded. The British delegation maintained otherwise. The French thought the costs of war ought to be included, but deemed the matter academic, inasmuch as Germany could never pay the total war costs. And so the argument ran.

Sub-commission Number Two on reparations had for its object to determine what Germany's capacity to pay was, and what the proper method of payment should be. Sub-commission Number Three was to devise sanctions or guarantees by which the Allies should be assured of receiving the payments finally determined upon.

For weeks I was active upon Sub-commission Number Two, and in fact was charged with the duty of drawing up the initial report covering the question of Germany's capacity to pay. Early in the deliberations of this Sub-commission it became apparent that its work was of momentous import, for whatever the Sub-commission determined as Germany's capacity to pay, undoubtedly that sum would be fixed as what Germany should be obligated to pay. Theoretically, as the French had pointed out, it did not make a great difference what categories of damage were included, because Germany would probably be unable to pay even the extent of material damage she had wrought. It was equally evident that she would be compelled by the Allies to pay to the utmost extent of her capacity. Therefore Sub-commission Number Two was in effect, naming the amount of the German "indemnity."

AN ESTIMATE OF GERMANY'S CAPACITY TO PAY

This knowledge rendered the work of the delegates on Sub-commission Number Two considerably more difficult. To estimate Germany's capacity to pay over a series of years was by no means a purely scientific matter. No banker, or economist, or financier, whatever his experience, could look far enough into the future to be able to say what Germany could or could not pay, in ten, twenty, or thirty years. The initial estimate made by one of the delegations, as representing Germany's capacity to pay, was one thousand million of francs. Another estimate was twenty-four billion sterling, about one hundred twenty billion of dollars. Now Germany's entire wealth was estimated at not over eighty billion dollars, so it was inconceivable how it could be possible, even over a series of years, for Germany to pick up her entire commonwealth and transfer it to the Allies. Most of Germany's property consists of the soil, railroads, factories, dwellings, and none of those things can be transported, none can be made available for the payment of reparation. Hence the question arose as to how much liquid wealth Germany could export year after year and still maintain her own economic life. This was the estimate upon which the British, French and American delegations wrangled pleasantly for weeks. Whenever we reached too tense a point, tea and toast was served, with jam to sweeten the atmosphere a bit, and then we would start afresh.

As a matter of fact, as we encouraged newspaper reporters to surmise, we had nearly arrived upon a basis of agreement for demanding a fixed sum from Germany. That sum would not have exceeded forty or forty-five billion dollars, with interest added. The American delegation believed it to be far sounder economically to name a fixed sum and thus limit Germany's liability, so that all nations could address themselves to a definite end and arrange their fiscal and taxation policies accordingly. But both Mr. Lloyd George and M. Clemenceau urged that public opinion in both their countries would not acquiesce in any sum that fell far below previous expectations; that, therefore, inasmuch as it was difficult anyway to arrive at once upon the exact amount of damage caused, it would be wiser to leave the amount of reparation open, to be determined by a commission which should examine into the damage sustained, and fix the total amount within two years. America's material interest in the question was so limited that President Wilson finally did not oppose Mr. Lloyd George's and M. Clemenceau's judgment. This, in brief, is the history of the Reparation clauses in the Treaty. As I have already said, if we realize that in almost every one of the other chapters similar complex courses of procedure had to be followed, we shall not be surprised at the time which the Treaty took for drafting.

THE ITALIAN CRISIS

The world is already familiar with the several crises which arose during the course of the Peace Conference. The so-called Fiume crisis, when the Italian delegation walked out and returned to Rome, was regarded as the most serious. I am not sure it was, although it was generally so considered. I believe most of Italy's warmest friends maintain that her action in going home was a mistake. The question of putting Fiume under Italian sovereignty was not covered nor even touched upon in the Treaty of London. In face, the question of Fiume arose long after the Peace Conference was under way. Signor Orlando, the Italian Premier, was accused of fostering Italian feeling on Fiume and of fanning it into flame. I believe there is no truth in this. At any rate, if the Italians had been wise, they would have prevented the matter of Fiume from becoming such a _cause celèbre_. I think that by judicious work they could have prevented it. Then, too, probably the difficulty would have been lessened if President Wilson's statement to the Italian people had previously met Signor Orlando's approval. Mr. Wilson made his statement with the best will in the world, with the intent to allay and not inflame Italian public opinion. It should have been possible to coördinate his idealism with Signor Orlando's position.

Later on the Italian delegation returned to Paris, realizing that the question of Fiume, which was formerly an Austrian port, did not bear one way or another upon the Treaty with Germany. But the Italians had lost a certain tactical position which was important to them, and in my judgment the move cost Italy much more than the whole question of Fiume amounted to.

THE QUESTION OF SHANTUNG

The Shantung crisis was another serious one. It was so realized at the time by the conferees at Paris. The Japanese delegation considered that it had already suffered one or two rebuffs. Their clause to embody race equality in the League of Nations Covenant had not been accepted. They, as the leading Far Eastern Power, were being urged to take an active part in the organization and development of the League of Nations, yet they could see nothing for Japan in the idea except a chance to help the other fellow. It was at this time that the Treaty clause was being drafted covering the disposition of German rights in the Far East, including those on the Shantung Peninsula. It will be remembered that at the outbreak of the war Germany, by reason of treaty rights with China, had possession of Kiauchau, upon the neck of the Shantung Peninsula. Back in 1916, at a time when the war was going badly, after Japan had driven the Germans out of the Far East and had prevented German submarines from getting a base there to prey upon British troop ships from Australia, Japan had demanded from England and France that she become the inheritor of whatever rights Germany had in Shantung. England and France readily granted this request, as America probably would have done if she had been in the war at the time. Later on, according to the record, China confirmed Japan in these rights.

President Wilson's idea, however, was "China for Chinamen"; therefore Shantung should be turned over to China. This was a proper point of view. It was a great pity that it could not be made to prevail. The difficulty, however, was two-fold: first, the agreement which I have just cited between England and France on one hand, and Japan on the other; second, Japan's statement to President Wilson that if he began his League of Nations by forcing England and France to break a solemn agreement with Japan, then Japan would have no use for such a faithless confederation and would promptly withdraw. At the same time, however, Japan reiterated that her inheritance of Shantung was largely a formal matter, and that if the Allies gave her that recognition, she would feel in honor bound to withdraw from Shantung in the near future. This statement, made repeatedly by the Japanese delegates to President Wilson, finally led him to refrain from forcing Great Britain and France to break their agreement, as he might perhaps otherwise have done. The climax, of course, came when Japan gave her ultimatum and said that unless she had her rights she would retire from the Conference.

DEMANDS OF BELGIUM

Then came the third and last crisis--the Belgians threatened to withdraw and go home. They had, as they claimed, been promised by their Allies, as well as by their enemies, including specifically Germany, that their country, trampled over and devastated in order to defend France and England from attack, was to be fully restored and reimbursed for its expenditures. Early in the Conference Colonel House projected a plan to Mr. Balfour of the British delegation and Mr. Klotz of the French delegation, granting Belgium a priority of $500,000,000 on the German reparation, this sum being sufficient to set Belgium well on her way to recovery. There was, however, great delay in getting the final assent to this priority. The American delegation worked hard to bring it about and to push the plan on every occasion, but it still hung fire.

The Belgian delegation, finally becoming alarmed, insisted on formally taking up the question with the Council of Four. The Belgian delegation, under the leadership of Mr. Hymans, Minister of Foreign Affairs, made two chief demands, one for the priority already mentioned, and one for reimbursement for what the war had cost her. To this latter item there was vigorous objection on the ground that it was inadmissible to provide for Belgium's "costs of war" and not for those of England, France, Italy and the other Allies. As a compromise to meet the situation, a formula was finally proposed in a phrase to the effect that Germany was to be obligated especially "to reimburse Belgium for all the sums borrowed by Belgium from the Allies as a necessary consequence of the violation of the Treaty of 1839." Inasmuch as all such sums borrowed by Belgium were used for the prosecution of the war, this phrase was simply a euphemism for granting to Belgium the war costs which she had demanded. But it was finally agreed to on all hands, and the crisis was averted.

THE TREATY PRESENTED TO THE GERMANS AT VERSAILLES

The Treaty in its final form was presented to the Germans at Versailles May 7th. The Germans were hoping they would be permitted to discuss certain phases of the Treaty in person with the Allied delegates, and in fact repeatedly requested the opportunity. Some of us believed such conversations might be advantageous if they were held; not between the chiefs of the Allied states and the heads of the German delegation, but between technical experts on both sides. Mr. Wilson favored this view, as tending to enlighten the Germans on certain phases of the Treaty, which from their written communications it was evident they did not understand. We thought that some weeks of delay might possibly be averted by sitting around the table with the Germans, distasteful as that task might be, and holding a kind of miniature peace conference. This suggestion, however, was strongly opposed by M. Clemenceau, although it was favored by some of his ministers. In fact, some of the latter, as well as many of the British, were for a time convinced that the terms of the Treaty were such that Germany would never sign them. Again and again Clemenceau was urged to give way on this point, but he sturdily opposed the view and declared positively that he knew the German character; that the only way to secure a German signature to the Treaty was to insist upon purely formal and written communications. Clemenceau had his way, and then began the laying of a good many wagers as to whether the Germans would sign. This was after the original German delegation, or at least the chiefs of it, had returned to Berlin and declared that they would not come back again to Versailles. My own opinion was, that after making as great a kick as possible the Germans would undoubtedly sign. The logic of the situation was all for their signing, the reasoning being this: If the Treaty were a just Treaty, then they ought to sign any way; if it were an unjust Treaty, then, even if signed, it would eventually fall of its own weight, and the Germans would run no risk in signing it. I felt that the German psychology of the situation would be acute enough to see these points and to lead to a signature.

GERMANY SIGNS THE TREATY

This proved to be the case, and on Saturday, the 21st of June, after questionings and misgivings, we finally got the word that the Germans were to sign. I shall never forget the moment that the news came. Some of us were in session with the Council of Four at the President's house. Mr. Wilson sat on the right of the fireplace, Mr. Lloyd George on the left, and M. Clemenceau in the middle. Mr. Orlando was in Italy but his foreign minister, Baron Sonnino, was there in his place. The afternoon was a tense one, for the time was growing short and the Germans had, as I say, not yet signified their intention of signing the treaty. In the mind of every one of us there lurked the question as to the terrible steps that would have to be taken in the event the Germans refused to sign. Late in the afternoon an orderly slipped into the room and whispered into M. Clemenceau's ear. He struggled to his feet, marched up to President Wilson and Mr. Lloyd George, and, drawing himself up, said in solemn tones, "I have the honor to announce to you that the Germans will sign the treaty."

And then a moment later the cannon boomed forth to the expectant populace the news that the Germans would sign, and M. Clemenceau, turning to me, breathed: "Ah, that is the sound that I have been waiting to hear for forty-eight years."

II--WILSON'S FOURTEEN POINTS

An Attempt to Raise International Morality to the Level of Private Morality

On January 8, 1918, President Wilson outlined the fourteen points on the basis of which the Allies should make peace. This program was the startling climax of a whole series of peace proposals which had kept coming from both camps of belligerents, from neutrals, Socialists, and the Pope. It is without doubt one of the greatest and most inspiring State documents in the history of the world. It struck a vital and telling blow at the basic causes of modern wars. For that reason it electrified into complete unity the masses of the Allied countries. Liberal, radical and pacifist opponents of the war rallied around it as the last great hope of civilization. Its most important effect was to give a democratic basis to the weary and disillusioned masses of the Central Powers who were longing for peace. It was on the basis of the fourteen points that the enemy surrendered.

THE WILSON PROGRAM

We entered this war because violations of right had occurred which touched us to the quick and made the life of our own people impossible unless they were corrected and the world secured once for all against their recurrence. What we demand in this war, therefore, is nothing peculiar to ourselves. It is that the world be made fit and safe to live in; and particularly that it be made safe for every peace-loving nation which, like our own, wishes to live its own life, determine its own institutions, be assured of justice and fair dealings by the other peoples of the world, as against force and selfish aggression. All the peoples of the world are in effect partners in this interest and for our own part we see very clearly that unless justice be done to others it will not be done to us. The programme of the world's peace, therefore, is our programme, and that programme, the only possible programme, as we see it, is this:

I. Open covenants of peace, openly arrived at, after which there shall be no private international understandings of any kind, but diplomacy shall proceed always frankly and in the public view.

II. Absolute freedom of navigation upon the seas, outside territorial waters, alike in peace and in war, except as the seas may be closed in whole or in part by international action for the enforcement of international covenants.

III. The removal, as far as possible, of all economic barriers and the establishment of an equality of trade conditions among all the nations consenting to the peace and associating themselves for its maintenance.

IV. Adequate guarantees given and taken that national armaments will be reduced to the lowest point consistent with domestic safety.

V. A free, open minded, and absolutely impartial adjustment of all colonial claims, based upon a strict observance of the principle that in determining all such questions of sovereignty the interests of the populations concerned must have equal weight with the equitable claims of the government whose title is to be determined.

VI. The evacuation of Russian territory and such a settlement of all questions affecting Russia as will secure the best and freest coöperation of the other nations of the world in obtaining for her an unhampered and unembarrassed opportunity for the independent determination of her own political development and national policy and assure her of a sincere welcome into the society of free nations under institutions of her own choosing; and, more than a welcome, assistance also of every kind that she may need and may herself desire. The treatment accorded Russia by her sister nations in the months to come will be the acid test of their good will, of their comprehension of her needs as distinguished from their own interests, and of their intelligent and unselfish sympathy.

VII. Belgium, the whole world will agree, must be evacuated and restored, without any attempt to limit the sovereignty which she enjoys in common with all other free nations. No other single act will serve as this will serve to restore confidence among the nations in the laws which they have themselves set and demanded for the government of their relations with one another. Without this healing act the whole structure and validity of international law is forever impaired.

VIII. All French territory should be freed and the invaded portions restored, and the wrong done France by Prussia in 1871 in the matter of Alsace-Lorraine, which has unsettled the peace of the world for nearly fifty years, should be righted, in order that peace may once more be made secure in the interest of all.

IX. A readjustment of the frontiers of Italy should be effected along clearly recognizable lines of nationality.

X. The peoples of Austria-Hungary, whose place among the nations we wish to see safeguarded and assured, should be accorded the freest opportunity of autonomous development.

XI. Rumania, Serbia and Montenegro should be evacuated; occupied territories restored; Serbia accorded free and secure access to the sea, and the relations of the several Balkan States to one another determined by friendly counsel along historically established lines of allegiance and nationality, and international guarantees of the political and economic independence and territorial integrity of the several Balkan States should be entered into.

XII. The Turkish portions of the present Ottoman Empire should be assured a secure sovereignty, but the other nationalities which are now under Turkish rule should be assured an undoubted security of life and an absolutely unmolested opportunity of autonomous development, and the Dardanelles should be permanently opened as a free passage to the ships and commerce of all nations under international guarantees.

XIII. An independent Polish State should be erected which should include the territories inhabited by indisputably Polish population, which should be assured a free and secure access to the sea and whose political and economic independence and territorial integrity should be guaranteed by international covenant.

XIV. A general association of nations must be formed under specific covenants for the purpose of affording mutual guarantees of political independence and territorial integrity to great and small States alike.

III--HOW THE PEACE TREATY WAS SIGNED

A Description of the Historic Ceremony in the Hall of Mirrors at the Palace of Versailles, June 8, 1919

(Reprinted from the New York _Times_.)

No nobler and more eloquent setting could have been found for this greatest of all modern events, the signing of the Peace of Versailles, after five years of terrific struggle on whose outcome the fate of the whole world had hung, than the palace of the greatest of French Kings on the hillcrest of the Paris suburb that gave its name to the treaty. To reach it, says the correspondent of _The New York Times_, the plenipotentiaries and distinguished guests from all parts of the world motored to Versailles that day, and drove down the magnificent tree-lined Avenue du Château, then across the huge square--the famous Place d'Armes of Versailles--and up through the gates and over the cobblestones of the Court of Honor to the entrance, where officers of the Republican Guard, whose creation dates back to the French Revolution, in picturesque uniform, were drawn up to receive them.

All day the crowd had been gathering. It was a cloudy day; not till noon did the sky clear. By noon eleven regiments of French cavalry and infantry had taken position along the approaches to the palace, while within the court on either side solid lines of infantry in horizon blue were drawn up at attention.

Hours before the time set for the ceremony an endless stream of automobiles began moving out of Paris up the cannon-lined hill of the Champs Elysées, past the massive Arc de Triomphe, bulking somberly against the leaden sky, and out through the Bois de Boulogne. This whole thoroughfare was kept clear by pickets, dragoons, and mounted gendarmes. In the meantime thousands of Parisians were packing regular and special trains on all the lines leading to Versailles, and contending with residents of the town for places in the vast park where the famous fountains would rise in white fleur-de-lis to mark the end of the ceremony.

A MEMORABLE SCENE

Past the line of gendarmes thrown across the approaches to the square reserved for ticket holders, the crowd surged in a compact and irresistible wave, while hundreds of the more fortunate ones took up positions in the high windows of every wing of the palace. Up the broad boulevard of the Avenue de Paris the endless chain of motor cars rolled between rows of French soldiers; and a guard of honor at the end of the big court presented arms to the plenipotentiaries and delegates as they drove through to the entrance, which for the Allied delegates only was by the marble stairway to the "Queen's Apartments" and the Hall of Peace, giving access to the Hall of Mirrors. A separate route of entry was prescribed for the Germans, an arrangement which angered and disconcerted them when they discovered it, through the park and up the marble stairway through the ground floor.

The delegates and plenipotentiaries began to arrive shortly after 2 p. m., their automobiles rolling between double lines of infantry with bayonets fixed--it was estimated that there were 20,000 soldiers altogether guarding the route--that held back the cheering throngs. The scene from the Court of Honor was impressive. The Place d'Armes was a lake of white faces, dappled everywhere by the bright colors of flags and fringed with the horizon blue of troops whose bayonets flamed silverly as the sun emerged for a moment from behind heavy clouds. At least a dozen airplanes wheeled and curvetted above.

Up that triumphal passage, leading for a full quarter of a mile from the wings of the palace to the entrance to the Hall of Mirrors, representatives of the victorious nations passed in flag-decked limousines--hundreds, one after another, without intermission, for fifty minutes. Just inside the golden gates, which were flung wide, they passed the big bronze statue of Louis XIV., the "Sun-King," on horseback, flanked by statues of the Princes and Governors, Admirals and Generals who had made Louis the Grand Monarque of France. And on the façade of the twin, temple-like structures on either side of the great statue they could read as they passed an inscription symbolic of the historic ceremony just about to occur: "To All the Glories of France."

NOTABILITIES ARRIVE

One of the earliest to arrive was Marshal Foch, amid a torrent of cheering, which burst out even louder a few moments later when the massive head of Premier Clemenceau was seen through the windows of a French military car. To these and other leaders, including President Wilson, General Pershing, and Premier Lloyd George, the troops drawn up all around the courtyard presented arms. After Clemenceau the unique procession continued, diplomats, soldiers, Princes of India in gorgeous turbans and swarthy faces, dapper Japanese in immaculate Western dress, Admirals, aviators, Arabs; one caught a glimpse of the bright colors of French, British, and Colonial uniforms. British Tommies and American doughboys also dashed up on crowded camions, representing the blood and sweat of the hard-fought victory; they got an enthusiastic reception. It was 2:45 when Mr. Balfour, bowing and smiling, heralded the arrival of the British delegates. Mr. Lloyd George was just behind him, for once wearing the conventional high hat instead of his usual felt. At 2:50 came President Wilson in a black limousine with his flag, a white eagle on a dark blue ground; he received a hearty welcome.

By 3 o'clock the last contingent had arrived, and the broad ribbon road stretched empty between the lines of troops from the gates of the palace courtyard. The Germans had already entered; to avoid any unpleasant incident they had been quietly conveyed from their lodgings at the Hotel des Reservoirs Annex through the park.

THE SCENE INSIDE

The final scene in the great drama was enacted in the magnificent Hall of Mirrors. Versailles contains no more splendid chamber than this royal hall, whose three hundred mirrors gleam from every wall, whose vaulted and frescoed ceiling looms dark and high, in whose vastness the footfalls of the passer re-echo over marble floors and die away reverberatingly. It was no mere matter of convenience or accident that the Germans were brought to sign the Peace Treaty in this hall. For this same hall, which saw the German peace delegates of 1919, representing a beaten and prostrate Germany, affix their signatures to the Allied terms of peace, had witnessed in the year 1871 a very different ceremony. It was in the Hall of Mirrors that the German Empire was born. Forty-nine years ago, on a January morning, while the forts of beleaguered Paris were firing their last defiant shots, in that mirror-gleaming hall was inaugurated the reign of that German Empire the virtual end of which, so far as the concept held by its originators is concerned, was signalized in Versailles in the same spot on Saturday, June 28. And in 1871 President Thiers had signed there the crushing terms of defeat imposed by a victorious and ruthless Germany.

In anticipation of the present ceremony carpets had been laid and the ornamental table, with its eighteenth century gilt and bronze decorations, had been placed in position on the daïs where the plenipotentiaries were seated. Fronting the chair of M. Clemenceau was placed a small table, on which the diplomatic instruments were laid. It was to this table that each representative was called, in alphabetical order by countries, to sign his name to the treaty and affix to it his Governmental seal. The four hundred or more invited guests were given places in the left wing of the Hall of Mirrors, while the right wing was occupied by about the same number of press representatives. Sixty seats were allotted to the French press alone. Besides the military guards outside the palace, the grand stairway up which the delegates came to enter the hall was controlled by the Republican Guards in their most brilliant gala uniform.

THE PEACE TABLE

The peace table--a huge hollow rectangle with its open side facing the windows in the hall--was spread with tawny yellow coverings blending with the rich browns, blues, and yellows of the antique hangings and rugs; these, and the mellow tints of the historical paintings, depicting scenes from France's ancient wars, in the arched roof of the long hall, lent bright dashes of color to an otherwise austere scene. Against the sombre background also stood out the brilliant uniforms of a few French guards, in red plumed silver helmets and red, white, and blue uniforms, and a group of Allied Generals, including General Pershing, who wore the scarlet sash of the Legion of Honor.

But all the diplomats and members of the parties who attended the ceremony of signing wore conventional civilian clothes. All gold lace and pageantry was eschewed, the fanciful garb of the Middle Ages was completely absent as representative of traditions and practices sternly condemned in the great bound treaty-volume of Japanese paper, covered with seals and printed in French and English, which was signed by twenty-seven nations that afternoon.

As a contrast with the Franco-German peace session of 1871, held in the same hall, there were present some grizzled French veterans of the Franco-Prussian war. They took the place of the Prussian guardsmen of the previous ceremony, and gazed with a species of grim satisfaction at the disciples of Bismarck, who sat this time in the seats of the lowly, while the white marble statue of Minerva looked stonily on.

ENTRANCE OF CHIEF ACTORS

The ceremony of signing was marked only by three minor incidents: a protest by the German delegation at the eleventh hour over the provision of separate entrance, the filing of a document of protest by General Jan Smuts of the South African delegation, and the deliberate absence of the Chinese delegates from the ceremony, due to dissatisfaction over the concessions granted to Japan in Shantung.

The treaty was deposited on the table at 2:10 p.m. by William Martin of the French Foreign Office; it was inclosed in a stamped leather case, and bulked large. Because of the size of the volume and the fragile seals it bore, the plan to present it for signing to Premier Clemenceau, President Wilson, and Premier Lloyd George had been given up. A box of old-fashioned goose quills, sharpened by the expert pen pointer of the French Foreign Office, was placed on each of the three tables for the use of plenipotentiaries who desired to observe the conventional formalities.

Secretary Lansing, meanwhile, had been the first of the American delegation to arrive in the palace--at 1:45 p.m. Premier Clemenceau entered at 2:20. Three detachments each consisting of fifteen private soldiers--from the American, British, and French forces--just before 3 o'clock and took their places in the embrasures of the windows overlooking the château park, a few feet from Marshal Foch, who was seated with the French delegation at the peace table. Marshal Foch was present only as a spectator, and did not participate in the signing. These forty-five soldiers of the three main belligerent nations were present as the real "artisans of peace" and stood within the inclosure reserved for plenipotentiaries and high officials of the conference as a visible sign of their rôle in bringing into being a new Europe. These men had been selected from those who bore honorable wounds. Premier Clemenceau stepped up to the poilus of the French detachment and shook the hand of each, expressing his pleasure at seeing them, and his regrets for the suffering they had endured for France.

PRESIDENT WILSON ENTERS

Delegates of the minor powers made their way with difficulty through the crowd to their places at the table. Officers and civilians lined the walls and filled the aisles. President Wilson entered the Hall of Mirrors at 2:50. All the Allied delegates were then seated, except the Chinese representatives, who were conspicuous by their absence. The difficulty of seeing well militated against demonstrations on the arrival of prominent statesmen. The crowd refused to be seated and thronged toward the center of the hall, which is so long that a good view was impossible from any distance, even with the aid of opera glasses. German correspondents were ushered into the hall just before 3 o'clock and took standing room in a window at the rear of the correspondents' section.

At 3 o'clock a hush fell over the hall. There were a few moments of disorder while the officials and the crowd took their places. At 3:07 the German delegates, Dr. Hermann Müller, German Secretary for Foreign Affairs, and Dr. Johannes Bell, Colonial Secretary, were shown into the hall; with heads held high they took their seats. The other delegates remained seated, according to a prearranged plan reminiscent of the discourtesy displayed by von Brockdorff-Rantzau, who at the ceremony of delivery of the peace treaty on May 7th, had refused to rise to read his address to the Allied delegates. The seats of the German delegates touched elbows with the Japanese on the right and the Brazilians on the left. They were thus on the side nearest the entrance, and the program required them to depart by a separate exit before the other delegates at the close of the ceremony. Delegates from Ecuador, Peru, and Liberia faced them across the narrow table.

THE GERMANS SIGN

M. Clemenceau, as President of the Peace Conference, opened the ceremony. Rising, he made the following brief address, amid dead silence:

"The session is open. The allied and associated powers on one side and the German Reich on the other side have come to an agreement on the conditions of peace. The text has been completed, drafted, and the President of the Conference has stated in writing that the text that is about to be signed now is identical with the 200 copies that have been delivered to the German delegation. The signatures will be given now, and they amount to a solemn undertaking faithfully and loyally to execute the conditions embodied by this treaty of peace. I now invite the delegates of the German Reich to sign the treaty.'

There was a tense pause for a moment. Then in response to M. Clemenceau's bidding the German delegates rose without a word, and, escorted by William Martin, master of ceremonies, moved to the signatory table, where they placed upon the treaty the sign-manuals which German Government leaders had declared over and over again, with emphasis and anger, would never be appended to this treaty. They also signed a protocol covering changes in the documents, and the Polish undertaking. All three documents were similarly signed by the Allied delegates who followed.

WILSON SIGNS NEXT

When the German delegates regained their seats after signing, President Wilson immediately rose and, followed by the other American plenipotentiaries, moved around the sides of the horseshoe to the signature tables. It was thus President Wilson, and not M. Clemenceau, who was first of the Allied delegates to sign. This, however, was purely what may be called an alphabetical honor, in accordance with which the nations were named in the prologue to the treaty. Premier Lloyd George, with the British delegation, came next. The British dominions followed. M. Clemenceau with the French delegates, was next in line; then came Baron Saionji and the other Japanese delegates, and they in turn were followed by the representatives of the smaller powers.

During the attaching of the signatures of the great powers and the Germans a battery of moving picture cameras clicked away so audibly that they could be heard above the general noise and disorder of the throng. The close of the ceremony came so quickly and quietly that it was scarcely noticed until it was all over. M. Clemenceau arose almost unremarked, and in a voice half lost amid the confusion and the hum of conversation which had sprung up while the minor powers were signing declared the conference closed, and asked the Allied and associated delegates to remain in their seats for a few moments--this to permit the German plenipotentiaries to leave the building before the general exodus.

THE GERMANS DEPART

None arose as the Germans filed out, accompanied by their suite of secretaries and interpreters, just as all the plenipotentiaries had kept their seats when Dr. Müller and Dr. Bell entered. The Germans went forth evidently suffering strong emotion. Outside an unsympathetic crowd jammed close to the cars which took them away. There was no aggression, but the sentiment of the throng was unmistakable.

Meanwhile the great guns that announced the closing of the ceremony were booming, and their concussion shook the old palace of Versailles to its foundations. Amid confusion the assembly dispersed, and the most momentous ceremony of the epoch was at an end.

The great war which for five long years had shaken Europe and the world was formally ended at last. It was a war which had cost the belligerents over $200,000,000,000; which had caused the deaths of 8,000,000 human beings, and which had left the world a post-war burden of debt amounting to $135,000,000,000. It was a war which had changed the whole face of Europe, which had brought many new nations into existence, which had revolutionized the organization of all national and international life. It was a war which had brought the world the consciousness of its common obligation to unite against all war. The booming of the great guns of Versailles seemed to proclaim a new epoch.

IV--THE PEACE TREATY--ITS MEANING TO AMERICA

America's "Place in the Sun" Due to Her Efforts to Secure a Just Peace

By GEORGE W. WICKERSHAM

Formerly Attorney-General of the United States.

"The cause of our entrance into the great war," declares Dr. David Jayne Hill in a recent essay, "being the violation by the German Imperial Government of our legal rights as a nation, our object in the war was to make our rights respected. The one clear duty of the treaty-making power in concluding peace with Germany, therefore, is to secure this result."[25]

[25] "Americanizing the Treaty."--_North American Review_, August, 1919.

In these words, one of the most distinguished and accomplished of the opponents of the treaty of Paris reveals the profound abyss which separates those who oppose from those who are urging the approval of the Treaty of Versailles. Dr. Hill, perhaps unconsciously, gives expression to a sordid, narrow, selfish view of the issues of the war, which would transmute into the most elemental act of self-defense one of the greatest crusades of high idealism ever conducted by any people in the history of nations. If, in fact, the cause of our participation in the war was merely to repel attacks upon our legal rights as a nation, then indeed, that end being attained, and the aggressor reduced to impotence for the future, we may return within our own borders, withdraw unto ourselves, disclaim all responsibility for the condition of the world elsewhere and plunge into the selfish exploitation of our national resources, "the world forgetting, by the world forgot." It is a strange perversion of the facts of recent history that leads to such a conception of America's responsibility for the future of civilization.

There were undoubtedly, as Mr. Wilson said, "violations of right which touched us to the quick." Was it merely violations of our own national rights that roused this peace-loving nation to array itself for battle; that sent two million of our young men across three thousand miles of ocean to take their places beside the heroes of Verdun and the Marne, the veterans of Cambrai and Arras, Ypres and the Somme; infused the weary defenders of civilization with new courage; converted their defense into an irresistible offensive which shattered the greatest military machine of history, overthrew the Kaiser and his government, and brought the German nation to its knees? No! It was not the German attacks upon our rights as a nation; it was the German challenge of the whole basis of modern Christian civilization. It was her cynical disclaimer of the binding character of treaties; her inhuman method of warfare; her brutal cruelties of non-combatant men, women and children; her ruthless destruction of monuments of art--the possessions of not merely one nation, but of the entire world of men and women in every land who love beauty and revere art. It was the growing conviction that a government which ordered the sinking of the _Lusitania_ and the _Sussex_; that destroyed the priceless literary treasures of Louvain; that separated families in Belgium and France, and deported great companies of men to work in German munition factories; that ruthlessly cut up by the roots the fruit trees and shrubs of the occupied regions of France; that sought to destroy not merely the men, but the souls of nations, so that its own horrid philosophy of Force might reign over them--that such a government must no longer exist; that its pestilential influence was more noxious than tuberculosis or the bubonic plague.

THE BASIS OF PEACE

Therefore, the Youth of America joyously leaped to arms and crowded overseas in the greatest of all crusades, insuring victory and promising the opening of a new and better epoch of human history. It was the recognition of human kinship; the perception of human brotherhood, that inspired them to the great endeavor. Our proud sense of American nationality took on a deeper and holier significance as we joined forces with the older peoples in defense of the great principles of human right which had been formulated by our fathers and upon which was reared the American State. We were no less Americans that we had accepted a common responsibility with Great Britain, France and Italy for the preservation of the ideals of human freedom for which Washington fought and Lincoln died. Nay! better Americans, as we realized that the war was being fought in defense of those principles upon which our own institutions were founded and by which we had become the great, strong, free nation we are.

And as the hideous carnage went on, and we saw a whole generation of the youth of the free nations of Europe butchered because the German people had become so obsessed with their own sense of superiority that they were determined to rule the world and impose upon all other peoples subservience to their Moloch-like gospel of efficiency, another feeling began to struggle for expression in Europe and America alike--a determination that all wars of aggression must cease; that disputes between nations must be settled like those between individuals, by peaceful arbitration or conciliation; that the causes of war must be examined and, so far as possible, removed, and that no such war as this ever again should desolate the earth. This was the meaning of the phrase one came to hear on many lips, that it was "a war against war." How could such a result be attained? Obviously, only by the continued association in peace of those powers whose close coöperation in war was compelling the overthrow of German militarism, and the widening of that association to include all the other nations who should accept its program and give an earnest of adherence to its ideals. There was also the hope that some time--when they should have offered up that ancient sacrifice, "an humble and a contrite heart"--even the German people, enfranchised and regenerated, might be admitted into the society of Free Peoples and with new significance become entitled to be called a civilized nation.

These were the principles that underlay Mr. Wilson's program of peace--the fourteen points of January 8, 1918, and subsequent addresses; the only definite formulation of the basis of peace which was laid before the world, a program concerning which the American Congress expressed no definite criticism and for which it offered no substitute; a program which was accepted by Allies and opponents alike, and which constituted the Chart by which the Conference of Paris was required to endeavor to formulate the terms of the Treaty of Peace.

The work of that Conference now has been submitted to the judgment of mankind. It was accepted by the new government of Germany with a wry face, as the judgment of the victors naturally would be taken by the vanquished. It has been ratified by the Parliament of Great Britain, by Italy, by France and by Japan. It has been for weeks under debate in the Senate of the United States. Daily efforts have been made to create a partisan political issue over it, and to visit upon it party resentment against the past actions of the President.[26]

[26] This article by Mr. Wickersham was prepared prior to the Senate deadlock and the rejection of the Treaty with the Lodge reservations.

Dr. Hill again sums up the case against the treaty--the final basis which the confused gropings after some means of making it unpopular with the people finally have evolved--in these words:

"The League of Nations, as proposed, includes not only obligations not related to the reasons for engaging in the war, but also obligations opposed to the traditions, the time-honored policies, and even the constitutional provisions of the United States. It commits the whole future policy of this country to the decisions of an international body in which it would have only a single voice; it permits that body to intrude its judgments, and thereby its policies into a sphere hitherto regarded as exclusively American, and, in addition, it demands that the territories held by each of the members of the League under this treaty shall receive the permanent protection of the United States as integral parts of the Nations that now claim them."

Is it true? What is the real meaning of the Peace Treaty and its effect upon the people of the United States? The answer to these questions, and indeed to most of the criticism of the Covenant, is conclusively met by a reading of the treaty. But first let us turn for a moment to the fourteen points of Mr. Wilson's address of January 8, 1918. The basis of the territorial readjustment of Europe which he then proposed, was the giving of national expression to racial aspiration. Alien imperial rule such as that of Austria over Hungary and Bohemia, and that of Germany, Austria or Russia over Poland, was to end, and the Poles, the Croats, Serbs, Hungarians, Bohemians, and the Czechoslavs and Jugoslavs each were to be allowed national existence, with the right of self-determination. Whatever may now be thought of the wisdom of this theory, it was accepted by all of the Allies, who thereby were committed to a responsibility for the protection, certainly in the early years of their existence, of the new nations they united to call into being. Recognizing this fact, the fourteenth of the Wilson points provided for the creation of an Association of the Allied Nations to protect the work of their arms. Aside from that practical purpose, the League of Nations was recognized by many in every land as furnishing the only practicable machinery for the removal of causes of war and the prevention of new assaults upon civilization, such as that which Germany had launched in August, 1914.

The first Chapter of the Peace Treaty, therefore, is a Covenant or Compact forming a League of Nations, whose purpose, as expressed in the Preamble, is "to promote international coöperation and to achieve international peace and security." Worthy objects, these: how are they to be attained? The Preamble answers,

"by the acceptance of obligations not to resort to war, by the prescription of open, just and honorable relations between nations, by the firm establishment of the understandings of international law as to actual rule of conduct among governments, and by the maintenance of justice and a scrupulous respect for all treaty obligations in the dealings of organized peoples with one another."

Are not these methods such as America has made her own? Have we not in many treaties accepted obligations not to make war until all peaceful methods of settling disputes shall have been exhausted; have we not striven to make the principles of international law rules for the government of nations; and was not one of the main points in the indictment of Germany on which we prosecuted the war against her that she had flouted the sanctity of treaties and made them mere scraps of paper?

The objects of the League therefore, as set forth in the Covenant, are expressive only of policies and principles to which the United States has given a consistent and unbroken adherence from the days of the Jay Treaty to the present hour. How are these objects proposed to be attained in the text of the Covenant? What is there in its provisions to justify the frantic abuse that has been heaped upon it by its opponents and to sustain the final accusation that it is "un-American?"

MACHINERY OF THE LEAGUE

First, as to the Machinery of the League. There is an Assembly of its members to which each Sovereign State may send delegates. There is an Assembly of its members to which each nation necessarily has one vote. In the United States Senate, Rhode Island and New York have equal representation, despite disparity in wealth and population. The principle of sovereignty requires this recognition of equality. But the powers of the Assembly are restricted to voting upon the admission of new members to the League, the addition of members to the Council, the disposition of international disputes which may be referred to it by the Council under Article XV, and the general consideration at its meetings of "any matter within the sphere of action of the League or affecting the peace of the world." This general authority only can embrace the right of discussion, save in very exceptional cases, as by Article V, "decisions at any meeting of the Assembly or of the Council shall require the agreement of all the members of the League represented at the meeting."

The actual governing body of the League is the Council, which is to consist of representatives of the five greater powers,--the United States, Great Britain, France, Italy and Japan, together with representatives of four other members of the League selected by the Assembly from time to time. These numbers may be increased, but only by the unanimous vote of the Council, approved by a majority of the Assembly.

As noted above, save in the very few expressly expected cases, the Council can reach decisions only by unanimous vote. What are to be its functions? They need not be enumerated in detail here. Briefly, they deal with the reduction of armaments, the control by governments of the private manufacture of munitions and implements of war, the consideration of any war or threat of war--"of any circumstance whatever affecting international relations which threatens to disturb either the peace or the good understanding between nations upon which peace depends." They require the formulation and submission to the members of the League for adoption of plans for the establishment of a permanent Court of International Justice. They empower the Council to endeavor to effect a settlement of any international dispute which shall not be submitted to arbitration by the parties; to investigate, consider and report upon any such dispute, and to publish its conclusions.

The parties to the League solemnly covenant and agree that if any dispute shall arise between them likely to lead to a rupture they will submit it either to arbitration or inquiry by the Council, and that in no case will they resort to war until three months after the award by the arbitrators or the report by the Council. They agree also to carry out in good faith any award that may be rendered, and not to make war against any member of the League that complies therewith. If a report by the Council is unanimously agreed to by its members, other than the representatives of the disputants, the members agree not to go to war with any party to the dispute which complies with the recommendations of the report.

OBJECTIONS TO THE PLAN

It is objected by some that the decision of questions between nations by these provisions is left to a body of delegates composing the Council who are not bound to decide according to rules of international law, but may reach conclusions merely as political expediency. This seems a strained interpretation. The members of the League agree to submit either (1) to arbitration or (2) to investigation by the Council, every dispute which may arise between them likely to lead to a rupture and in no case to resort to war until three months after the award by arbitrators or the report by the Council. They declare (by Article XIII)

"Disputes as to the interpretation of a treaty, as to any question of international law, as to the existence of any fact which, if established, would constitute a breach of any international obligation, or as to the extent and nature of the reparation to be made for any such breach," to be among those which are generally suitable for submission to arbitration. Disputes of the character thus enumerated are what are known as justiciable, _i. e._, subject to be decided by a Court by the application of the recognized principles of international law.

Mr. Root recommended that such disputes should be required to be arbitrated. The Conference at Paris, like those at the two Hague Conferences, would not agree to that. But in view of the declaration just quoted, any power which should bring before the Council a dispute of the character mentioned, but which it was unwilling to submit to arbitration, would have the burden of showing convincing reason for such attitude.

When the first draft of the Covenant was before the country, American critics objected that it would compel the United States to submit to arbitration on inquiry by the Council purely domestic questions such as tariff, immigration and coastwise traffic. To meet this objection, there was inserted in Art. XV the following paragraph:

"If the dispute between the parties is claimed by one of them, and is found by the Council to arise out of a matter which by international law is solely within the domestic jurisdiction of that party, the Council shall so report, and shall make no recommendation as to its settlement."

To this it is objected that the determination of the question whether or not a matter of dispute is by the rules of international law solely with the domestic jurisdiction of a member is left to the Council and not to the member. Surely, it requires no explanation to demonstrate, that if a member State may oust the Council of jurisdiction to inquire into a given dispute which threatens the peace of the world merely by itself asserting that it arises out of a matter within its exclusive domestic jurisdiction, a very imperfect means of averting war will have been provided, and the League Covenant will hardly have more efficacy than the second Hague Convention. Remember too, that the reports of the Council must be unanimous, and the unreasonableness of the objection to the provisions cited will appear.

MEANS TO PREVENT WAR

Articles XI to XVI constitute the heart of the Covenant, the most effective means ever formulated to prevent war. The agreements of the nations not to resort to war until the processes of arbitration or inquiry are exhausted, are buttressed by the provision that should any member violate these agreements it shall _ipso facto_ be deemed to have committed an act of war against all the other members of the League, entailing as a consequence commercial boycott, expulsion and the application of armed force, if the members shall so determine. The employment of force in this case, as in every other contemplated by the Covenant, is not left to the decision of Council or Assembly. They can only recommend. The member States agree _not to go_ to war. There is nowhere in the document any provision compelling them _to go_ to war. Even where one State in violation of its Covenant threatens the peace of the world, the utmost the Council can do is

"To recommend to the several governments concerned what effective military or naval forces the members of the League shall severally contribute to the armaments of forces to be used to protect the covenants of the League."

Much heated objection has been directed against Article X, which reads as follows:

"The members of the League undertake to respect and preserve as against external aggression the territorial integrity and existing political independence of all members of the League. In case of any such aggression or in case of any threat or danger of such aggression, the Council shall advise upon the means by which this obligation shall be fulfilled.'

Again, it is left to the determination of each State what force it shall employ to enforce this provision. As a matter of fact, this article adds little, if anything, to the provisions of Article XI, which declares that "Any war or threat of war ... is hereby declared a matter of concern to the whole League, and the League shall take any action that may be deemed wise and effectual to safeguard the peace of nations." Any external aggression against the territorial integrity or political independence of a member of the League would amount to a war or threat of war, and would invoke action under Article XI, if not under Article X. But the guaranty of Article X is very necessary as affording a moral protection to the new nations brought into being through the peace Conference. The United States of America, whose President formulated the principles of peace to which these Nations owe their existence, can not afford to shirk responsibility for their protection. The Covenant abolishes the evil of secret treaties between the nations composing the League, while preserving the effectiveness of existing treaties of arbitration.

THE MONROE DOCTRINE

To meet the objection that the Covenant would deprive us of the Monroe Doctrine--a national policy adopted by the United States as its own and maintained for its own protection--Article XXI of the amended Covenant provides that--

"Nothing in this Covenant shall be deemed to affect the validity of international engagements such as treaties of arbitration or regional understandings like the Monroe Doctrine for securing the maintenance of peace."

The phrase "regional understanding," as applied to the Monroe Doctrine, is not a happy one. But the article certainly excludes the Monroe Doctrine from modification or effect by the treaty. It secures from every one of the thirty-two original members and the thirteen other states which shall be invited to join the League, a recognition of the existence of the Monroe Doctrine and an agreement that it is not to be affected by anything contained in the Covenant. Certainly _that_ is not an un-American result to accomplish, and when one reads Dr. Hill's statement that the Covenant "does not embody our traditional American ideals," one wonders in what museum of forgotten lore the learned doctor has found those "traditional ideals" preserved. Dr. Hill's so-called ideals conflict with the expression in this great treaty of the peculiarly American ideal of averting war by providing peaceful methods of settling disputes among nations, with the express recognition by all the other nations of the doctrine that "was proclaimed in 1823 to prevent America from becoming a theater for the intrigues of European absolutism," and with the official commentary of the Delegates of Great Britain which says that--

"At first a principle of American foreign _policy_, it (Monroe Doctrine) has become an international _understanding_, and it is not illegitimate for the people of the United States to ask that the Covenant should recognize this fact."

GERMAN COLONIES

One of the most difficult problems presented to the Peace Conference was the disposition of the former colonies of Germany in Asia, Africa and Australasia, and of the communities formerly belonging to the Turkish Empire. It was recognized that the victors in the war shared a common responsibility for the just and wise treatment of these peoples, who were utterly unable to stand alone. The method adopted declared all of them to be wards of the League of Nations and provided that they should be governed by Mandatory Powers willing to undertake the task and appointed by the League under charters framed by the Council. These Powers would be answerable to the League for the right exercise of their powers, and subject to inspection and report. A great deal of impassioned rhetoric has been expended over these provisions, upon the false assumption that thereby the United States was committed to a responsibility for the government of remote regions of the earth. The Covenant commits us to nothing. Our participation in the war has entailed upon us a common responsibility with our Allies for the protection and wise government of these communities. We no more can escape that responsibility with honor than we could after the Spanish War escape responsibility for the Philippine Islands.

But it is for the American Congress to determine the extent of recognition of our duty and the means by which we shall discharge it.

In the case of the Philippine Islands, the United States set for the world a great moral example in the government of colonies, not in its own interest, but for the benefit and exclusively in the interest of the inhabitants of possessions which fell into our hands as a consequence of the war with Spain. The principle thus proclaimed and practiced has been followed in the case of the colonies and territories which the World War has left at the disposition of the Allied and Associated Nations. This principle, in the words of the Covenant, is "that the well-being and development of such peoples form a sacred trust of civilization." The best method yet devised for giving practicable effect to this principle undoubtedly is,

"That the tutelage of such peoples be intrusted to advanced nations who, by reason of their resources, their experience or their geographical position, can best undertake this responsibility, and who are willing to accept it, and that this tutelage should be exercised by them as mandatories on behalf of the League."

This is the American attitude toward undeveloped peoples. To remove these provisions from the Peace Treaty would be to _de_-Americanize the Treaty.

MISCELLANEOUS PROVISIONS

The Covenant brings within the cognizance of the League the regulation of international relations affecting (1) efforts to secure and maintain fair and humane conditions of labor for men, women and children--a subject elaborated and provided for in great detail in Part XIII of the Peace Treaty; (2) the execution of international agreements with regard to traffic in women and children, and in opium and other dangerous drugs; (3) the trade in arms and ammunition with the countries in which the control of this traffic is necessary in the common interest; (4) the prevention and control of disease.

The members of the League further agree (1)

"To make provision to secure and maintain freedom of communication and of transit and _equitable_ treatment for the commerce of all members of the League,"

and (2)

"to encourage and promote the establishment and coöperation of duly authorized voluntary national Red Cross organizations having as purposes improvement of health, the prevention of disease and the mitigation of suffering throughout the world."

All these are subjects customarily dealt with in international agreements. These provisions are designed to bring into coördination with the League and make more effective all provisions concerning such matters.

The framers of this great program recognized that it was, necessarily, an experiment, and that experience doubtless would develop defects and suggest needed changes. Provision is therefor made for amendments which should take effect when ratified by the members of the League whose representatives compose the Council, and by a majority of the members whose representatives compose the Assembly. But, preserving the theory that the League is to be an alliance of Sovereign Powers, it also is provided that no member shall be bound against his will by any such amendment. It may dissent, and thereby cease to be a member of the League.

Finally, any member may, at will, after two years' notice, withdraw from the League,

"provided that all its international obligations and all its obligations under this Covenant shall have been fulfilled at the time of its withdrawal."

No jurisdiction is vested in any organ of the League to determine whether or not in any instance this condition has been complied with. It is conceivable that pending some arbitration or inquiry by the Council, the application of a commercial boycott or other disciplinary process for violation of a provision of the Covenant, the offending power should seek to escape the jurisdiction of the League, by exercising the right of withdrawal. The period of notice probably is too long to allow of this, and yet the slow process of international procedure might require more than two years to reach a conclusion. Does it not seem fair that before a nation should withdraw from this great association it should be required to fulfil its obligations under the treaty?

PROBABILITY OF WAR MINIMIZED

The treaty of peace with Germany deals with many questions of vital import to European nations, but with which America has but little direct concern. Part I, the Covenant, is the section which touches us most nearly. It is the part which embodies the idealism of our people, and through which we are enabled to discharge the responsibilities we assumed by formulating for friend and foe the conditions of peace. Human nature changes but little from century to century, but the highest and purest aspirations of the human heart find expression from age to age with greater force and with wider acceptance. Doubtless, in the future, the passions of man will again flare up in bloody wars, but the creation of an adequate machinery for discussion and cooling reflection, must tend to minimize the probabilities of war. The spirits of millions of slaughtered youth who sleep in the fields of France and Flanders call out to us, for whom they died, to consecrate their sacrifice by a new and greater endeavor to safeguard the future peace of the world.

The conferees of Paris have formulated a measure for this purpose. It is not perfect. Experience may develop even greater imperfections than study has revealed. But it contains much of hope and promise. It is practical; it is subject to amendment. It commits no one irrevocably to its provisions. It is instinct with American idealism. It is in accord with the best American traditions. Washington, Lincoln, McKinley, and Roosevelt--each has contributed to the establishment of some of its main provisions. No partisan, no provincial prejudice should be permitted to influence or control the judgment of our people concerning it.

* * * * *

=When Peace Came to Verdun=

It was 10:45 on the morning of November 11th in Verdun. The Germans had thrown a barrage over the little French city, now immortal; and shells were falling, plowing up the earth that had been turned over and over, ground to powder by four years of artillery fire. Would the Germans stop at 11 o'clock? Reason said "yes." Everyone in Verdun knew that at that hour the armistice would go into effect.

It was 10:50. The guns continued bellowing. A feeling deeper than reason came over those in the city that the Germans would not stop. Verdun had lived through four years of fire, smoke, thunder, blood, and ruin. Sometimes for days there would be a lull, but the guns were never quiet long. The Germans never forgave the "they-shall-not-pass" spirit that had hurled them back just as the prize--this military key to the West front--seemed within their grasp.

It was 10:55. Men were crouching between buildings. They kept coming--doughboys, Morrocans, English soldiers, more doughboys. Even the general and his aids began to look anxious.

"Then," says B. C. Edworthy in _Association Men_, "as suddenly as though God himself had dropped a wet blanket over the crackling flames of hell and at one blow had extinguished them all, the firing ceased. There was an instant's pause, in which it seemed as though the world had come to an end. Then from the forty bells, high in the still untouched towers of that old cathedral at Verdun, which had witnessed the most heroic sacrifice of life and love save that on Calvary alone, pealed forth as did the voices over the Bethlehem hills those silver tones that once again were saying, 'Peace on Earth.' The men were joyously and deliriously leaping about, yelling and shouting and singing and kissing one another. Slowly those heavy cathedral doors opened and in rushed about six hundred of the Allied soldiers."

There were Mohammedans, Catholics, Jews, and Protestants. They pressed forward into the choir space, the roofs above them open to heaven. A simple impromptu service of thanksgiving followed. An English soldier led the Doxology, and all who knew the hymn joined in. Six hundred worshipers knelt, each soldier praying according to his faith. Mohammedans bowed to the stones, Catholics crossed themselves, Jews and Protestants with moving lips bent their heads or lifted their faces to heaven. Dr. Oscar E. Maurer, of New Haven, Conn., led the _Lord's Prayer_. As the strange congregation rose, the Americans began "My Country 'tis of Thee," the English joining in with "God Save the King."

There could be only one closing hymn in that battered shell of Verdun Cathedral. Now, as though it had been arranged, the French pushed forward and began the "Marseillaise." It was the singing of the soul of a nation, a soul redeemed:

_Allons, enfants de la patrie Le jour de gloire est arrivé_

Peace had come to Verdun, deliverance to France, safety to the world. With the last words of the national hymn of France, the service was finished, and the worshipers turned and reverently left the building.

THE TREATY OF VERSAILLES AND THE COVENANT OF THE LEAGUE OF NATIONS

(Signed June 28, 1919, Rejected by the United States, November 19, 1919 and Again Rejected, with the Lodge Reservations, March 19, 1920)

The preamble contains the names of the plenipotentiaries that took part in the negotiations and signed the treaty, with a few exceptions: Dr. Hermann Müller and Dr. Johannes Bell were substituted for Brockdorff-Rantzau and his associates, China's delegates refused to sign on account of the Shantung concessions to Japan, and Italy was represented by a new commission headed by Signor Tittoni, the new Foreign Minister.

The text here reproduced is the revised edition of the treaty distributed in French and English among the delegates at the time of the signing. The copy actually signed is deposited in the archives of the Republic of France in Paris.

PREAMBLE

The United States of America, the British Empire, France, Italy, and Japan, these powers being described in the present treaty as the principal Allied and Associated Powers; Belgium, Bolivia, Brazil, China, Cuba, Ecuador, Greece, Guatemala, Haiti, the Hedjaz, Honduras, Liberia, Nicaragua, Panama, Peru, Poland, Portugal, Rumania, the Serb-Croat-Slovene State; Siam, Czechoslovakia, and Uruguay, these powers constituting with the principal powers mentioned above the Allied and Associated Powers of the one part; and Germany, of the other part: Bearing in mind that on the request of the Imperial German Government an armistice was granted on Nov. 11, 1918, to Germany by the principal Allied and Associated Powers in order that a treaty of peace might be concluded with her, and the Allied and Associated Powers being equally desirous that the war in which they were successively involved directly or indirectly, and which originated in the declaration of war by Austria-Hungary on July 28, 1914, against Serbia; the declaration of war by Germany against Russia on Aug. 1, 1914, and against France on Aug. 3, 1914, and in the invasion of Belgium, should be replaced by a firm, just, and durable peace;

For this purpose the high contracting parties represented as follows:

THE PRESIDENT OF THE UNITED STATES OF AMERICA, by:

The Honorable Woodrow Wilson, President of the United States, acting in his own name and by his own proper authority;

The Honorable Robert Lansing, Secretary of State;

The Honorable Henry White, formerly Ambassador Extraordinary and Plenipotentiary of the United States at Rome and Paris;

The Honorable Edward M. House;

General Tasker H. Bliss, Military Representative of the United States on the Supreme War Council;

HIS MAJESTY THE KING OF THE UNITED KINGDOM OF GREAT BRITAIN AND IRELAND AND OF THE BRITISH DOMINIONS BEYOND THE SEAS, EMPEROR OF INDIA, by:

The Right Honorable David Lloyd George, M. P., First Lord of his Treasury and Prime Minister;

The Right Honorable Andrew Bonar Law, M. P., his Lord Privy Seal;

The Right Honorable Viscount Milner, G. C. B., G. C. M. G., his Secretary of State for the Colonies;

The Right Honorable Arthur James Balfour, O. M., M. P., his Secretary of State for Foreign Affairs;

The Right Honorable George Nicoll Barnes, M. P., Minister without portfolio; and

FOR THE DOMINION OF CANADA, by:

The Right Honorable Sir George Eulas Foster, G. C. M. G., Minister of Trade and Commerce;

The Right Honorable Charles Joseph Doherty, Minister of Justice;

FOR THE COMMONWEALTH OF AUSTRALIA, by:

The Right Honorable William Morris Hughes, Attorney General and Prime Minister;

The Right Honorable Sir Joseph Cook, G. C. M. G., Minister for the Navy;

FOR THE DOMINION OF SOUTH AFRICA, by:

General the Right Honorable Louis Botha, Prime Minister;

Lieut. General the Right Honorable Jan Christiaan Smuts, K. C., Minister of Defense;

FOR THE DOMINION OF NEW ZEALAND, by:

The Right Honorable William Ferguson Massey, Minister of Labor and Prime Minister;

FOR INDIA, by:

The Right Honorable Edwin Samuel Montagu, M. P., his Secretary of State for India;

Major General his Highness Maharaja Sir Ganga Singh Bahadur, Maharaja of Bikanir, G. C. S. I., G. C. I. E., G. C. V. O., K. C. B., A. D. C.;

THE PRESIDENT OF THE FRENCH REPUBLIC, by:

Mr. Georges Clemenceau, President of the Council, Minister of War;

Mr. Pichon, Minister of Foreign Affairs;

Mr. L. L. Klotz, Minister of Finance;

Mr. André Tardieu, Commissary General for Franco-American Military Affairs;

Mr. Jules Cambon, Ambassador of France;

HIS MAJESTY THE KING OF ITALY,[27] by:

Mr. V. E. Orlando, President of the Council of Ministers;

[27] On account of the overthrow of the Orlando Ministry and the formation of the Nitti Ministry, the treaty was signed by a delegation headed by Signor Tittoni, the New Foreign Minister.

Baron S. Sonnino, Minister of Foreign Affairs;

Mr. S. Crespi, Deputy, Minister of Supplies;

Marquis G. Imperiali, Senator of the Kingdom, Ambassador of his Majesty the King of Italy at London;

Mr. S. Barzilai, Deputy, formerly Minister;

HIS MAJESTY THE EMPEROR OF JAPAN, by:

Marquis Saionji, formerly President of the Council of Ministers;

Baron Makino, formerly Minister of Foreign Affairs, member of the Diplomatic Council;

Viscount Chinda, Ambassador Extraordinary and Plenipotentiary of H. M. the Emperor of Japan at London;

Mr. K. Matsui, Ambassador Extraordinary and Plenipotentiary of H. M. the Emperor of Japan at Paris;

Mr. H. Ijuin, Ambassador Extraordinary and Plenipotentiary of H. M. the Emperor of Japan at Rome;

HIS MAJESTY THE KING OF THE BELGIANS, by:

Mr. Hymans, Minister of Foreign Affairs, Minister of State;

Mr. Van Den Heuvel, Envoy Extraordinary and Minister Plenipotentiary of H. M. the King of the Belgians, Minister of State;

Mr. Vandervelde, Minister of Justice, Minister of State;

THE PRESIDENT OF THE REPUBLIC OF BOLIVIA, by:

Mr. Ismael Montes, Envoy Extraordinary and Minister Plenipotentiary of Bolivia at Paris;

THE PRESIDENT OF THE REPUBLIC OF BRAZIL, by:

Mr. Epitacio Pessoa, formerly Minister of State, formerly member of the Supreme Court of Justice, Federal Senator;

Mr. Pandiá Calogeras, Deputy, formerly Minister of Finance;

Mr. Raul Ferdnandes;

THE PRESIDENT OF THE CHINESE REPUBLIC,[28] by;

Mr. Lou Tseng-Tsiang, Minister of Foreign Affairs;

Mr. Chengting Thomas Wang, formerly Minister of Agriculture and Commerce;

[28] Refused to sign on account of Shantung concessions to Japan.

THE PRESIDENT OF THE CUBAN REPUBLIC, by:

Mr. Antonio Sanchez de Bustamante, Dean of The Faculty of Law in the University of Havana, President of the Cuban Society of International Law;

THE PRESIDENT OF THE REPUBLIC OF ECUADOR, by:

Mr. Enrique Dorn y de Alsua, Envoy Extraordinary and Minister Plenipotentiary of Ecuador at Paris;

HIS MAJESTY THE KING OF THE HELLENES, by:

Mr. Eleftherios Venizelos, President of the Council of Ministers;

Mr. Nicolas Politis, Minister of Foreign Affairs;

THE PRESIDENT OF THE REPUBLIC OF GUATEMALA, by:

Mr. Joaquin Mendez, formerly Minister of State for Public Works and Public Instruction, Envoy Extraordinary and Minister Plenipotentiary of Guatemala at Washington, Envoy Extraordinary and Minister Plenipotentiary on Special Mission at Paris;

THE PRESIDENT OF THE REPUBLIC OF HAITI, by:

Mr. Tertullien Guilbaud, Envoy Extraordinary and Minister Plenipotentiary of Haiti at Paris;

HIS MAJESTY THE KING OF THE HEDJAZ, by:

Mr. Rustem Haidar;

Mr. Abdul Hadi Aouni;

THE PRESIDENT OF THE REPUBLIC OF HONDURAS, by:

Dr. Policarpe Bonilla, on special mission to Washington, formerly President of the Republic of Honduras, Envoy Extraordinary and Minister Plenipotentiary;

THE PRESIDENT OF THE REPUBLIC OF LIBERIA, by:

The Honorable C. D. B. King, Secretary of State;

THE PRESIDENT OF THE REPUBLIC OF NICARAGUA, by:

Mr. Salvador Chamorro, President of the Chamber of Deputies;

THE PRESIDENT OF THE REPUBLIC OF PANAMA, by:

Mr. Antonio Burgos, Envoy Extraordinary and Minister Plenipotentiary of Panama at Madrid;

THE PRESIDENT OF THE REPUBLIC OF PERU, by:

Mr. Carlos G. Candamo, Envoy Extraordinary and Minister Plenipotentiary of Peru at Paris;

THE PRESIDENT OF THE POLISH REPUBLIC, by:

Mr. Roman Dmowski, President of the Polish National Committee;

Mr. Ignace Paderewski, President of the Council of Ministers, Minister of Foreign Affairs;

THE PRESIDENT OF THE PORTUGESE REPUBLIC, by:

Dr. Affonso Costa, formerly President of the Council of Ministers;

Mr. Augusto Soares, formerly Minister of Foreign Affairs;

HIS MAJESTY THE KING OF RUMANIA, by:

Mr. Jean J. C. Bratiano, President of the Council of Ministers, Minister of Foreign Affairs;

General Constantin Coanda, Corps Commander, A. D. C. to the King, formerly President of the Council of Ministers;

HIS MAJESTY THE KING OF THE SERBS, THE CROATS, AND THE SLOVENES, by:

Mr. N. P. Pachitch, formerly President of the Council of Ministers;

Mr. Ante Trumbic, Minister of Foreign Affairs; Mr. Milenko R. Vesnitch, Envoy Extraordinary and Minister Plenipotentiary of H. M. the King of the Serbs, the Croats, and the Slovenes at Paris;

HIS MAJESTY THE KING OF SIAM, by:

Prince Charoon, Envoy Extraordinary and Minister Plenipotentiary of H. M. the King of Siam at Paris;

Prince Traidos Prabandhu, Under Secretary of State for Foreign Affairs;

THE PRESIDENT OF THE CZECHO-SLOVAK REPUBLIC, by:

Mr. Charles Kramar, President of the Council of Ministers;

Mr. Edouard Benes, Minister of Foreign Affairs;

THE PRESIDENT OF THE REPUBLIC OF URUGUAY, by:

Mr. Juan Antonio Buero, Minister of Industry, formerly Minister of Foreign Affairs;

GERMANY,[29] by;

Count Brockdorff-Rantzau, Minister for Foreign Affairs of the Empire;

[29] Treaty Signed by Dr. Hermann Müller, Minister for Foreign Affairs of the Empire, and Dr. Johannes Bell, Minister of the Empire.

Dr. Landsberg, Minister of Justice of the Empire;

Mr. Giesberts, Minister of Posts of the Empire;

Oberbürgermeister Leinert, President of the Prussian National Assembly;

Dr. Schücking;

Dr. Karl Melchior; Acting in the name of the German Empire and of each and every component State.

WHO having communicated their full powers found in good and due form HAVE AGREED AS FOLLOWS:

From the coming into force of the present treaty the state of war will terminate. From that moment and subject to the provisions of this treaty official relations with Germany and with any of the German States will be resumed by the Allied and Associated Powers.