The Audacious War
by Clarence W. Barron
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E-text prepared by Al Haines




Boston and New York Houghton Mifflin Company The Riverside Press Cambridge 1915 Copyright, 1914 and 1915, by the Boston News Bureau Company Copyright, 1915, by Clarence W. Barron All Rights Reserved Published February 1915



Suppose 't were done! The lanyard pulled on every shotted gun; Into the wheeling death-clutch sent Each millioned armament, To grapple there On land, on sea and under, and in air! Suppose at last 't were come— Now, while each bourse and shop and mill is dumb And arsenals and dockyards hum,— Now all complete, supreme, That vast, Satanic dream!—

Each field were trampled, soaked, Each stream dyed, choked, Each leaguered city and blockaded port Made famine's sport; The empty wave Made reeling dreadnought's grave; Cathedral, castle, gallery, smoking fell 'Neath bomb and shell; In deathlike trance Lay industry, finance; Two thousand years' Bequest, achievement, saving, disappears In blood and tears, In widowed woe That slum and palace equal know, In civilization's suicide,— What served thereby, what satisfied? For justice, freedom, right, what wrought? Naught!—

Save, after the great cataclysm, perhap On the world's shaken map New lines, more near or far, Binding to king or czar In festering hate Some newly vassaled state; And passion, lust and pride made satiate; And just a trace Of lingering smile on Satan's face! —Boston News Bureau Poet.

This poem has been called the great poem of the war. It was written just preceding the war, and published August 1 by the "Boston News Bureau." Of it, and its author, Bartholomew P. Griffin, the following was written by Rev. Francis G. Peabody: "The English poets, Bridges, Kipling, Austin, and Noyes, have all tried to meet the need and all have lamentably failed. I am proud not only that an American, but that a Harvard man, should have risen to the occasion."


The Scotch have this proverb: "War brings poverty. Poverty brings peace. Peace brings prosperity. Prosperity brings pride. And pride brings war again." Shall the world settle down to the faith that there is no redemption from an everlasting round of pride, war, poverty, peace, prosperity, pride, and war again?

But it was not primarily to settle, or even study this problem that I crossed the ocean and the English Channel in winter. As a journalist publishing the Wall Street Journal, the Boston News Bureau, and the Philadelphia News Bureau, and directing news-gathering for the banking and financial communities, I deemed it my duty to ascertain at close hand the financial factors in this war, and the financial results therefrom.

I found myself on the other side, not only in the domain of the finance encircling this war, but unexpectedly in close touch with diplomatic and government circles. The whole of the war, its commercial causes, its financial and military forces, its tremendous human sacrifices, the conflicting principles of government, and the world-wide issues involved, all lay out in clear facts and figures after I had gathered by day and night from what appeared at first to be a tangled web.

I learned who made this war, and why at this time and for what purposes, present and prospective; and from facts that could not be set down categorically in papers of state. No papers, "white," "gray," or "yellow," could present a picture of the war in its inception and the reasons therefor.

There is no powerful organization over nations to keep the peace of Europe or of the world, as nations are in organization over states, and states over cities, to insure peace and justice, without strife or human sacrifice.

The immediate causes of this war, and I believe they have not before been presented on this side of the ocean, are connected with commercial treaties, protective tariffs, and financial progress.

It may be wondered that in our country, which is the home of the protective tariff system and boasts its great prosperity therefrom, there has been as yet no presentation of the business causes beneath this war. Our great journalists are trained to find interesting, picturesque, and saleable news features from big events. Details of war's atrocities and destructions are to most people of the greatest human interest, and rightly so. As a country we have no international policy, and European politics and policies have never interested us.

Germany is buttressed by tariffs and commercial treaties on every side. Years ago I was told in Europe that the commercial treaties wrested from France in 1871 were of more value to Germany than the billion dollars of indemnity she took as her price to quit Paris. But I did not realize until I was abroad this winter how European countries had warred by tariffs, and that Germany and Russia were preparing for a great clash at arms over the renewal of commercial and tariff treaties which expire within two years, and which had been forced by Germany upon Russia during the Japanese War.

German "Kultur" means German progress, commercially and financially. German progress is by tariffs and commercial treaties. Her armies, her arms, and her armaments, are to support this "Kultur" and this progress.

I believe I have told the story as it has never been told before. But the facts cannot be drawn forth and properly set in review without some presentation of the spirit of the peoples of the European nations.

If all the nations of Europe were of one language, the spirit, the soul of each in its distinctive characteristics might stand out even more prominently than to-day.

Then we could see even more clearly the spirit of brotherhood and nationality that stands out resplendent as the soul of France. We should see the spirit of empire and of trade, interknit with administrative justice, as the soul of Great Britain. We should see Germany an uncouth giant in the center of Europe, viewing all about him with suspicion, and demanding to know why, as the youngest, sturdiest, best organized, and hardest working European nation, he is not entitled to overseas or world empire.

But few persons on this side have comprehended the relation of this great war to the greatest commercial prizes in the world; the shores of the Mediterranean, Asia Minor, with its Bagdad Railroad headed for the Persian Gulf, Mesopotamia with its great oil-fields, undeveloped and a source of power for the recreation of Palestine and all the lands between the Mediterranean, the Indian Ocean, and Asia.

The greatest study for Americans to-day is the spirit of nations as shown in this war, and great lessons for the United States may be found in the finance, business, patriotism, and justice that stand forth in the British Empire as never before. She is rolling up a tremendous war-power within her empire and throughout Europe, encircling the German war-power. But she is likewise looking to her own people and her own workers, filling her own factories and every laboring hand to the full that she may keep her business and profits at home, and with her business and profits and accumulated capital and income prosecute the greatest war of history.

She is not unmindful in any respect of what the war may send her way. In the breaking-away and the breaking-up of Turkey, she sees a clear field for Egypt, the realization of the dream of Cecil Rhodes of the development of the whole of Africa by a Cape to Cairo Railroad, and she sees her own empire and peoples belting the world in power, usefulness, and justice, and with a sweep and scope for enterprise and development beyond all the previous dreams of this generation.

The United States, with hundreds of millions of banking reserves released and giving base for a business expansion double any we have had before, seems suddenly paralyzed in its business activities and, comprehending only that the loaf of bread is a cent higher and a pound of cotton a few cents lower, it is wondering on which side of its bread the butter is to fall.

Meanwhile, it talks politics, asks if prosperity here is to come during or after the war; and having little comprehension of the meaning of the national throbs that on the other side of the globe are pulsating the world into a new era of light, liberty, and expansion by individual labor, it refuses to take up its daily home-task and go forward.

In the hope that these pages may be useful to my fellow countrymen in giving them the facts of this war, its commercial causes, its financial progress, its sacrifice in humanity,—sacrifice that could not be demanded but for a greater future,—these papers are taken, as completed in my financial publications in this month of February, and placed before the reading community in book form, as requested in hundreds of personal letters.

They were never conceived or written with any idea of their permanent preservation. They were prepared for the banking community, which demands news-facts and figures discriminatingly presented. The banker wants the truth; he will make his own argument and reach his own conclusions.

The reader will readily see that these chapters are day-to-day issues aiming to present that news from the standpoint of finance. But under all sound finance must be primarily the truth of humanity. They do not claim to be from beginning to end a harmonious book-presentation of the war, but it is believed that they contain the essential fundamental war-facts; and the aim was to present them in most condensed expression.

They cover the first six months of this most Audacious War. Whether it is to continue for another six months or another sixteen months is not so material as the character of the peace and what is to follow.

No greater problem can be placed before the world than that of how the peace of nations may be maintained. Having cleared my own mind upon this subject, I submit it in the final chapter, which naturally follows after that treating of the lessons for the United States from this war.

Only in an international organization, with power to make decrees of peace and enforce them, and with insurance of powers above those of all dissenters, can we find the peace of nations as we have found the peace of cities. This Audacious War has forced such an alliance as can yield this power. Its transfer to the support of an International tribunal can make and keep the peace of Europe and eventually of the world.

Then may the earth cease to be, in history, that steady round of Prosperity, Pride, and War.

C. W. Barron.

February 15, 1915.






The Censorship—The Warship "Audacious"—Mine or Torpedo?—The Battle Line—War by Gasolene Motors—The Boys from Canada—The Audacity of it.

The war of 1914 is not only the greatest war in history but the greatest in the political and economic sciences. Indeed, it is the greatest war of all the sciences, for it involves all the known sciences of earth, ocean, and the skies.

To get the military, the political, and especially the financial flavor of this war, to study its probable duration and its financial consequences, was the object of a trip to England and France from which the writer has recently returned.

One can hear "war news" from the time he leaves the American coast and begins to pick up the line of the British warships—England's far-flung battle line—until he returns to the dock, but thorough investigation would convince a trained news man that most of this war gossip is erroneous.

This war is so vast and wide, from causes so powerful and deep, and will be so far-reaching in its effects that no ill-considered or partial statements concerning it should be made by any responsible writer.

The difficulty of obtaining the exact facts by any ordinary methods is very great. There is a strict supervision of all news, and to insure that by news sources no "aid or comfort" is given to the enemy, a vast amount of pertinent, legitimate, and harmless news and data is necessarily suppressed. The censors are military men and not news men, and act from the standpoint that a million facts had better be suppressed than that a single report should be helpful to the enemy. Only in Russia are reports of news men from the firing line allowed.

One hears abroad continually of the battle of the Marne, of the battle of the Aisne, of the contest at Ypres, and the fight on the Yser, but no outside man has yet been permitted to describe any of these in detail, or to give the strategy, beginning, end, or boundaries of them, or even the distinct casualties therefrom. Indeed, it is doubtful if the official histories, when they are written, can do this, for these are the emphasized portions of one great and continuous battle that went on for more than one hundred days.

To illustrate the strength of the hand on the English war news, it may be noted that there is no mention permitted in the English press of such a ship as the "Audacious." Yet American papers with photographs of the "Audacious" as she sinks in the ocean are sold in London and on the Continent. Outside of London not ten per cent of the people know anything concerning this boat or her finish.

This word "finish" would be disputed in any newspaper or well-informed financial office in London where it is daily declared that although the "Audacious" met with an accident, her guns have been raised and will go aboard another ship of the same size, purchased, or just being finished, and named the "Audacious." Indeed, I was informed on "good authority" that the "Audacious" was afloat, had been towed into Birkenhead and that the repairs to her bottom were nearly finished. You can hear similar stories wherever the "accident" is discussed. I have heard it so many times that I ought to believe it. Yet if one hundred people separately and individually make assurances concerning something of which they have no personal knowledge, it does not go down with a true news man. I was able to run across a man who saw the affair of the "Audacious." He laughed at the stories of shallow water and raised guns. His position was such, both then and thereafter, that I was sure that he knew and told me the truth.

Later I learned that the "Audacious" was too far off the Irish coast to permit of talk of shallow water, and that neither guns nor 30,000-ton warships are raised from fifty-fathom depths.

Yet I am willing to narrate what has not been permitted publication in England, and I think not elsewhere: that the mines about Lough Swilly, along the Scotch and Irish coasts, and in the Irish Sea, were laid with the assistance of English fishing-boats flying the English flag. These boats had been captured by the Germans and impressed into this work.

There are also stories of Irish boats and Norwegian trawlers in this work, but I secured no confirmation of such reports.

It is still unsettled in British Admiralty circles as to whether the "Audacious" came in contact with a mine or torpedo from a German submarine. Two of her crew report that they saw the wake of a torpedo. Reports that the periscope of a submarine showed above the water I have reason to reject.

English reports were suppressed—the admiralty claimed this right, since there was no loss of life—in the belief that if the ship was torpedoed by a submarine, the Germans would give out the first report, and thereby be of assistance in determining the cause. But to-day the Germans have their doubt as to where the "Audacious" is, and as to whether or not she was ever really sunk.

Expert opinion is divided in authoritative circles in England as to the cause of the disaster; but more than 400 mines have been swept up along the Irish and Scotch coasts by the English mine sweepers.

While upon this subject, I ought to narrate that the study of this topic has convinced me that the Germans have a long task if they hope within a reasonable number of months to reduce by submarine torpedo practice the efficiency of the English navy to a basis that will warrant German warships coming forth to battle.

Every battleship is protected by four destroyers. Submarines, when detected, are the most easily destroyed craft. They have no protection against even a well-directed rifle bullet. Their whole protection is that of invisibility. Their plan of operation is to reach a position during the night, whence in the early morning they can single out an unprotected warship or cruiser not in motion, and launch against her side a well-directed torpedo, before being discovered.

The place for England's battleships is where they are: in the harbors with their protecting nets down until they are called for in battle. In motion or action, submarines have little show against them.

The Japanese at Port Arthur found that protecting nets picked up many torpedoes and submarines. Since that time, torpedoes have been made with cutting heads to pierce steel nets encircling the warships, but their effectiveness has not so far been practically demonstrated.

It is Kitchener's idea to keep the enemy guessing. Therefore he was rather pleased than otherwise when the story of Russians coming through England from Archangel was told all over the world. The War Office winked at the story and certainly had no objection to the Germans getting a good dose of it. I think that story might have been helpful at the time when the Allies were at their weakest, but they do not now need Russians, or stories of Russians, from Archangel.

The story must also go by the board that a submarine north of Ireland meant either a new type of boat that could go so far from Germany, or an unknown base nearer Scotland.

Submarines as now built could go from Germany around the British Isles and then across the Atlantic—in fair weather.

The eastern boundary of France divides itself into four very nearly equal sections. Italy and Switzerland are the lower quarters of this boundary line; and of the upper quarters Belgium is the larger and Germany the smaller. The southern half of the German quarter boundary is a mountain range and on the open sections stand the great fortifications of France and Germany, regarded by both countries as practically impregnable. The defence of France on the Belgian frontier was the treaty which guaranteed the neutrality of the smaller country.

When Germany's conquering hosts came through Belgium, the war soon became a battle of human beings rather than of fortifications. Neither the French nor the Germans had learned from practical experience the modern art of fighting human legions in ground trenches, but both sides quickly betook themselves to this rabbit method of warfare.

To-day from Switzerland to the North Sea is a double wall of 4,000,000 men, all fighting, not only for their own existence but for the existence of their nationality—their national ideals. They are protected by aeroplanes, flying above, that keep watch of any large movements.

They are backed by 4,000,000 men in reserve and training who keep the trenches filled with fighting men, as 10,000 to 20,000 daily retire to mother earth, to the hospitals, or to the camps of the imprisoned. On the North Sea and the English Channel they are supported by fleets of battleships, cruisers, submarines, and torpedo boat destroyers that occasionally "scrap" with each other, the German boats now and then attacking the English coast and harbors and the English boats now and then assisting to mow down the German troops when they approach too near the coast. But the great dread and key to this naval warfare is the modern submarine.

Submarines, aeroplanes, and motor busses are three elements of warfare never before put to the test; and the greatest of these thus far is the gasolene motor-car. By this alone Germany may be defeated. France and England are rich in gasolene motor power, and supplies from America are open to them. A year ago there were less than 90,000 motor-cars in Germany, and Prince Henry started to encourage motoring to remedy this, but the Germans are slow to respond in sport. Indeed they know little of sport as the English understand it, of sportsman ethics or the sense of fair play in either sport or war. They do not comprehend the English applause for the captain of the "Emden" and stand aghast at the idea that he would be received as a hero in England. When a daring aeroplane flier in the performance of his duty has met with mishap and, landed on German soil, he is not welcomed as a hero. He is struck and kicked.

The German is not to be blamed. It is the way he has been educated to "assert himself," as the Germans phrase it. Indeed, when the captain of the "Emden" was taken prisoner and was congratulated by the Australian commander for his gallant defense, he was so taken aback that he had to walk away and think it over. He returned to thank his adversary for his complimentary remarks. With true German scientific instinct he had to find his defeat in a physical cause, remarking, "It was fortunate for you that your first shot took away my speaking tubes."

The English are sports in war,—too sporty in fact. General Joffre warned General French over and over again, "Your officers are too audacious; you will soon have none to command," and his words proved true. The English officers felt that the rules of the game called upon them to lead their men. They became targets for the guns of the foe, until one of the present embarrassments in England is the unprecedented loss of officers.

This has now been changed and Kitchener insists that both officers and men shall regard themselves as property of the Empire, that the exposure of a single life to unnecessary hazard is a breach of discipline. For this reason Victoria Crosses are not numerous, less than two dozen having been conferred thus far; and it has been quietly announced that no Victoria Crosses will be conferred for single acts of bravery or where only one life is involved. It must be team work and results affecting many.

For this reason also it has been decreed that the 33,000 Canadians in training at Salisbury Plain shall not be put in the front until they have learned discipline in place of the American initiative.

These Canadian boys receive their home pay of four shillings, or $1 per day, while the English Tommy gets one quarter of this amount. The Canadians are fine fellows, feeling their independence and anxious to be on the firing line, but the War Office recognizes that soldierly independence cannot be allowed in this war. It is not improbable that the Canadian troops will eventually be dispersed that their strong individual initiative may be thoroughly harnessed under the organization before they are trusted in the trenches. They are not to be permitted to go there to be shot at, but to use their splendid physiques, fighting abilities, and patriotism—more British than the English themselves—in strict organization.

This is not to be an audacious war on the part of the Allies. It is first a defensive war in which the Germans are the heaviest losers. On the part of the Germans it is an audacious war and its very audacity has astounded the whole world. But Germany never meant to war against the world collectively. That was the accident of her bad diplomacy.

The audaciousness of Prussian war conceptions began in the latter part of the last century. They did not grow out of the war with the French in 1870, for Bismarck's legacy to the German nation was a warning against any war with Russia. The German scheme was concocted by the successor of Bismarck himself, none other than Kaiser William II. He planned a steady growth of German power that would first vanquish the Slav of southeastern Europe and give Germany control through Constantinople and Asia Minor to the Persian gulf; then, as opportunity arose, a crushing of France and repression of Russia; and the overthrow of the British empire; and then the end of the Monroe Doctrine, to be followed by American tariffs dictated from Germany.

This seems so audacious a program as to be almost beyond comprehension in America. Yet it will be made clear in the next chapter.



War with Russia was Inevitable—Finance and Tariffs made Germany great—Commercial War—How Germany loses in the United States—The Tariff Danger.

For the causes of this most audacious war of 1914 one must study, not only Germany and her imperial policy, but most particularly her relations with Russia. These relations are very little understood in America, but they become vital to us when open to public view.

Disregarding all the counsels of Bismarck and the previous reigning Hohenzollerns, the present Kaiser has steadily offended Russia. War with her within two years was inevitable, irrespective of any causes in relation to Servia. Russia knew this and was diligently preparing for it. Germany—the war party of Germany—knew it and with supreme audacity determined through Austria first to smash Servia and put the Balkan States and Turkey in alignment with herself for this coming war with Russia.

Sergius Witte is one of the great statesmen of Russia. He formulated the programme for the Siberian railroad and Russian Asiatic development. The party of nobles opposed to him arranged that he should receive the humiliation of an ignoble peace with Japan, under which it was expected that Russia would have to pay a huge indemnity.

But when Witte arrived at the naval station at Portsmouth, New Hampshire, to make the famous treaty with Japan, his first declaration was, "Not one kopeck for indemnity." He won out and returned in triumph to Russia.

But during the progress of the Japanese war Germany thrust her commercial treaties upon St. Petersburg. Goods from Russia into Germany were taxed while German goods went under favorable terms into Russia, with the result that Russia has had a struggle now for ten years to keep her gold basis and her financial exchanges.

It was Witte who was sent to Berlin to protest against these proposed treaties and secure more favorable terms. Witte made his protest and refused to accept the German demands. Then suddenly he received peremptory orders from the Czar to grant all the demands of Germany. The Czar declared Russia was in no condition to have trouble with Germany. These commercial treaties expire within two years. Russia many months back proposed the discussion of new terms. Germany responded that the present treaties were satisfactory to her and he should call for their renewal.

This meant either further humiliation to Russia or war. Russia had already suffered the affront of being forced by Germany at the point of the bayonet to assent to the taking by Austria of Bosnia and Herzegovina in violation of the Treaty of Berlin. The Czar realized many months ago that Russia must now fight for her commercial life. She would not, however, be ready for the war until 1916.

Let Americans consider what this means—a German war over commercial tariffs—and see what, if successful in Europe, it would lead to.

The German nation is a fighting unit under the dominion of Prussia, the greatest war state, not only of the empire, but of the world. Having welded Germany by the Franco-Prussian war into a nation with unified tariffs, transportation, currency, and monetary systems, Prussia has been able to point to the war as the cause of the phenomenal prosperity of Germany.

It is a popular fallacy in Germany that militarism makes the greatness of a nation. Germany's prosperity did not begin with the war of 1870. This was only the beginning of German unity which made possible unified transportation and later unified finances and tariffs. Several years after the war, France, which had paid an indemnity to Germany of a thousand million dollars, or five billion francs, was found, to the astonishment of Bismarck, more prosperous than Germany which had thus received the expenses of her military campaign and a dot of Spandau Tower war-reserve moneys.

In 1875 came the great Reichsbank Act, which consolidated all the banking power of the empire. Then came her scientific tariffs which put up the bars here, and let them down there, according as Germany needed export or import trade in any quarter of the earth. The German people, on a soil poorer than that of France, worked hard and long hours for small wages. But they worked scientifically and under the most intelligent protective tariff the world has ever seen. In a generation they built up a foreign trade surpassing that of the United States and reaching $4,500,000,000 per annum. By her rate of progress she was on the way to distance England, whose ports and business were open to her merchants without even the full English income tax. She built the biggest passenger steamers ever conceived of and reached for the freight carrying trade of the world. She mined in coal and iron and built solidly of brick and stone. She put the world under tribute to her cheap and scientific chemistry. She dug from great depths the only potash mines in the world and from half this potash she fertilized her soil until it laughed with abundant harvests.

The other half she sold outside so that her own potash stood her free and a profit besides. No nation ever recorded the progress that Germany made after the inauguration of her bank act and her scientific tariffs. The government permitted no waste of labor, no disorganization of industry. Capital and labor could each combine, but there must be no prolonged strikes, no waste, no loss; they must work harmoniously together and for the upbuilding of the empire.

Germany did not want war except as means to an end. She wanted the fruits of her industry. She wanted her people, her trade, and her commerce to expand over the surface of the earth, but to be still German and to bring home the fruit of German industry.

Germany has been at war—commercial war—with the whole world now for a generation, and in this warfare she has triumphed. Her enterprise, her industry, and her merchants have spread themselves over the surface of the earth to a degree little realized until her diplomacy again slipped and the present war followed—such a war as was planned for by nobody and not expected even by herself. She was giving long credits and dominating the trade of South America. She had given free trade England a fright by the stamp, "Made in Germany." She was pushing forward through Poland into Russia to the extent that her merchants dominated Warsaw and were spreading out even over the Siberian railroad. Her finance was intertwined with that of London and Paris.

In the United States she was the greatest loser. Here taxes were lowest and freedom greatest. German blood flowed in the veins of 20,000,000 Americans and not one fourth of them could she call her own. The biggest newspaper publisher in America, William Randolph Hearst, figured that New York was one of the big German cities of the world. He turned his giant presses to capture the German sentiment. He spent tens of thousands of dollars upon German cable news, devoting at times a whole page to cable presentations from Europe which he thought would interest Germans. But the investment proved fruitless; he found there was in America no German sentiment such as he had reckoned upon. He could not increase his circulation, for the German-Americans seemed little concerned as to what happened in Berlin or Bavaria.

Prussia learned what Hearst learned, that Germans were soon lost in the United States. She studied this exodus and the wage question and by various arts and organizations arrested the German emigration to America. She saw to it that employment at home was more stable. It was figured that if the German emigration could be centralized under the German eagle it would be to her advantage. The question was where to get land that could be made German. Europe has for some years expected a German dash in Patagonia, and the Europeans outside of Germany have taken very kindly of late years to the Monroe Doctrine. In Africa and the islands of the sea the German colonial policy has not been a success. Dr. Dernburg as colonial secretary has many a time stood up in the Reichstag and warned the Germans that the home military system and rules were not adaptable to colonization in foreign parts; that Germans must adapt themselves to foreign countries and not attempt at first to make their manners the standard in the colonies they undertook to dominate.

While German colonies have not yet passed beyond the experimental stage, German tariffs and German commerce have been great successes.

The population of Russia is 166,000,000 people. This is the latest figure I gathered from those intimate with the government at St. Petersburg. This is just 100,000,000 more than Germany. Germany thinks she must trade to her own advantage with the people now crowding her eastern border.

The example of America in putting up tariff bars against "Made in Germany" has many advocates in England and in the rest of the world.

When France, only a few years ago, was angered that Italy should sign up in "triple alliance" with Austria and Germany, she did not dare to attack Italy with arms, but she did attack Italy by tariff measures, and for a time Italy and France fought—by tariffs.

What might be the position of Germany if the American protective tariff system were expanded over the earth? In the view of some people tariffs, taxation, and armaments go hand in hand. There is a town in Prussia that finished payment only twenty years ago on the indemnity Napoleon exacted from it.

Can a country afford to develop an industrial system dependent upon an outside world and then suddenly find the outside world closed by tariff barriers?

When an American ambassador protested against Bismarck's discriminatory treatment of American pork, the great chancellor asked, "What have you to talk with? You have no army or navy." "No," said the American ambassador, "but we have the ability to build them as big as anybody. Do you wish to tempt us?" "No," said the German chancellor, "and your goods shall not be discriminated against."

Dr. Dernburg has given the key to the German colonial military, tariff, and financial policy. German unity in tariffs and transportation has made German prosperity, and Dr. Dernburg, her former colonial secretary and now in New York, says the mouth of the Rhine and the channel ports must be free to Germany and that Belgium must come into tariff and transportation union with Germany. Belgium is being taxed, tariffed, pounded, and impounded into the German empire.

There is some difference in size between Belgium and Russia, but no difference in principle with respect to their German relations.

"World power or downfall," Bernhardi put it.



A State with no Morals—A Peace Treaty sundered—Where Germany fails—A Thunderbolt.

Sending his little expedition to China the Kaiser said:—

"When you encounter the enemy you will defeat him; no quarter shall be given, no prisoners shall be taken. Let all who fall into your hands be at your mercy. Just as the Huns one thousand years ago, under the leadership of Attila, gained a reputation in virtue of which they still live in historical tradition, so may the name of Germany become known in such a manner in China that no Chinaman will ever again dare to look askance at a German."

Belgium was made an example of. According to the German idea she should have accepted money and not stood in the way of German progress.

German military progress is allied with German commercial progress. It is a mistake in the conception of Germany to imagine that she wars for the purpose of war or for the development and training of her men.

The first principle of German "Kultur" as respects the state is that the sole business of the government is to advance the interests of the state. No laws having been formulated in respect to the business of a state, the government is without moral responsibility, and the laws applicable to individual action do not apply to the state. Individuals may do wrong, but the state cannot do wrong. Individuals may steal and be punished therefor, but the state cannot steal. It is its business to expand and to appropriate. Individuals may murder and be punished for the crime, but it is the business of the state to kill for state development or progress.

The English-speaking conception of morality is that what applies to an individual in a community applies to the aggregate of the individuals, that the state is only the aggregate of the individuals exercising the natural human functions of government for law and order.

This is entirely outside the German conception. In the German conception a government comes down from above and not up from the people. It is not the people who rule or govern, but the government from above rules the people, and the people must implicitly follow and obey; thus is national progress and human progress. The whole of Germany believes in the government of the Kaiser: that law and war flow down through him and that neither can be questioned by the individual. Obedience, union, efficiency, progress, and progress through war, if necessary, are cardinal virtues.

Germany does not desire war with Russia, but German progress requires the continuance of present tariff relations, and if war is a means to that desirable end, war is divine.

The murder of the Crown Prince of Austria was an incident furnishing Germany and Austria opportunity to carry out their long-conceived programme for the extension of their influence through the growing state of Servia.

A treaty had been arranged between Greece and Turkey, and was to have been signed in July, which would have settled many things in respect to Turkey and the Balkan states. Roumania and Servia were in agreement concerning this great measure for peace in southeastern Europe.

When all was ready for the final conference and the signatures, Austria intervened and announced her opposition. Then suddenly followed the bombshell of the ultimatum to Servia, timed at the precise moment to stop the signing of this Turkish treaty.

Austrian officials admitted privately as follows, and I have it directly from parties to the negotiations:—

"We are satisfied that Servia would punish the murderers of Prince Ferdinand if we so requested. We are satisfied she would apologize to Austria if we requested it. But our aims go beyond. We demand that instead of the proposed Turkish treaty the Balkan states shall come into union with Turkey under the influence of Austria. To accomplish this we must accept no apology, but must punish Servia. We are satisfied that Russia is in no financial or military position to interfere."

Germany with its enormous spy system had secured copies of the confidential state papers of the Czar and transmitted them to Vienna. In these were warnings, statistics, and compilations showing all the financial and military weaknesses of Russia: that her great gold reserve had been largely loaned out and was not available cash on hand, as the world had been led to believe; that it would take eighteen months more of preparation to place her military forces in position to defend the country; that her arms and the factories to build them were not ready.

The plans of Austria and Germany were to line up the Balkan states, under German political and trade influences, and then within two years to have it out with Russia and again impose the German tariffs upon her. If France dared to come in, it would certainly be an attack, and Italy would, under the Triple Alliance, assist to defend Austria and Germany. Defeating Russia, Germany could, at that time or later, crush France in the manner in which Bismarck had said she might eventually be crushed by Germany for Germany's progress.

Then, having made more onerous tariff treaties with France than were exacted from her in 1870 and having extended German trade and military influence over Russia, Germany would be in a position with her navy to try out the long desired issue with Great Britain for the control of the seas.

Admiral Von Tirpitz told the emperor that it must be at least two years more before the German navy would be able to try conclusions with England.

The German plan was to take the European countries one at a time. The German information was that every country except Germany was unprepared, and that information was true. She was fully prepared except in her navy.

One of the leaders among those great business Lords of England, who sit with the Commoners in business, but in the House of Lords as respects legislation, said to me when I spoke of the wonderful intelligence of Germany in research and data, scientific and political: "But, don't you think that the Germans had too much information and too little judgment?"

In other words, they had a stomach full of facts but no capacity to digest them. They knew as much about Ulster and perhaps more than London as respects facts and detailed information, but they were in no position to pass judgment upon Ulster or the unity of the British Empire the moment there was an attack from the outside. The Germans have dealt in materialistic facts. But with the spirit that moulds and makes history they are all awry. With the Germans, individuals are units and are counted from the outside, never from the inside. That is why her diplomacy is not only a failure, but offensive: it never differentiates among nations and peoples according to that which is within the mind and the heart of the people.

The German Emperor directed the Austrian ultimatum to Servia, insisting upon stronger demands than were at first proposed. Then, turning his back upon the scene, he was able to protest that he was not responsible. Yet the published correspondence from every capital in Europe now shows that the German Emperor fenced off every attempt to get Austria to modify or postpone or discuss her demands. Germany was ready for everything except the interference of Great Britain.

A private telephone rang at five o'clock one morning in Berlin and an American lady was informed from a social quarter that "Something dreadful has happened." "Something awful—something undreamed of." The American lady quickly asked, "Has the Kaiser been assassinated?" as the tone over the telephone indicated nothing less.

The response was, "England has declared war!"

That was the most unlooked-for step in all the German calculations.

Every spy report, every diplomatic agency, military and civil, had reported that England was out of the running: Ireland in revolution, India in sedition, Canada, Australia, and South Africa just ready to break away from the British yoke.

The conception of the British empire as a federation of free peoples governing themselves, under a constitutional monarchy, is something incomprehensible in the German idea of government. The German idea is of colonies attached to and paying tribute to the crown, something to be ruled over, governed, taxed, and made to serve.

Russia might go to war exposing in the field her weakness already spread out on paper by Russian authorities, with copies in Vienna and Berlin; but that England or Great Britain could or would fight at this time was an impossibility; although later England was to become "The vassal of Germany."

And the wonderment of Germany has become the wonderment of the world. "Roll up," said Kitchener, and 2,000,000 men sprang to arms. More than 800,000 of them are on the Continent; 1,700,000 of them are in training.

"Roll up," said Lloyd George, the Chancellor of the British Exchequer; and $1,700,000,000 of war loan is rolling into the British Treasury, a sum one half the national debt of England and nearly twice the national debt of the United States.

If necessary, the number of men in arms will be doubled to 4,000,000 and the enormous subscription just made to England's war loan will be doubled and quadrupled.

The life of the empire as respects money and men is at stake, and no sacrifice is too great. If treaties are "scraps of paper" and neutral states are to have no rights or protection, there is no safety in the world, no sacredness of contracts; the world is at an end and chaos reigns.



The Bagdad Railroad—The English Oil Concession—The German Alliance with Turkey—Austria the Hand of Germany—The Decay of Turkey—The New Map.

How ridiculous are American peace proposals concerning the Audacious War of 1914 may be judged from this announcement which I am able to make:—

The return of the French government from Bordeaux to Paris was determined upon from two points of view: safety and political necessity. The French people were angered that Paris should have been deserted, but notwithstanding the political reasons, which were more forceful than the public will be permitted to know, the return would not have been undertaken had not the military authorities considered the move a safe one. How safe will be evidenced by this—that at both Bordeaux and Paris this problem was before the authorities: "Events have now progressed so far that it is time for the Allies to consider what will be their terms of peace. These terms must be divided into many classes, ranging from those in which only one of the Allies has an interest to those in which all have an interest. Of course, the latter will be the most complex, and it is time now to begin with the complexities of the most far-reaching situation. This is Mesopotamia and the Bagdad railroad."

Now who in Washington knows anything about Mesopotamia or the Bagdad railroad? Yet here is the key of the most far-reaching problem in any peace proposals. It is because this matter can now be settled that the plunging of Turkey into the war by Enver Bey has made all Europe rejoice. The Germans think Turkey is another 16 1/2-inch howitzer or "Jack Johnson" putting black smoke over the British empire. The rest of Europe now knows the whole of Turkey is on the table, and the carving, it is believed, will be had with no plates extended from either Austria or Germany. For the first time the Turkish problem can be really settled instead of patched.

Some years ago I was astonished to learn in Europe that American banking interests, and American contracting and engineering firms in alliance therewith, had their eyes upon Asia Minor and the possibility of its development by American railroad enterprise. I was astonished to learn that some people at Constantinople had authority for the use of the name of J. P. Morgan & Co. Indeed, a railroad concession in Asia Minor, the details of which it is not now necessary to go into, had been arranged, I was told, and lacked only signatures. The American people felt that the Germans were the little devils under the table who stayed the hand of the Sultan, and kept his pen off the parchment. Never would the signature come down on that paper, although declared to have been many times promised.

The English were, of course, vitally interested in any railroad concessions in Asia Minor as opening the route to the Persian Gulf and India. Money talks with Turkey as nowhere else. The Germans had made a great impression upon the Bosphorus. Nobody at that point in the geography of the world could fail to see the wonderful commercial progress of the Germans and the military power that stood behind ready to back it up.

A concession for a railroad from the Bosphorus to Bagdad and through Mesopotamia to the Persian Gulf finally went to Germany, and the signature of the Sultan was at the bottom of the paper. There was, of course, the usual Oriental compromise, and the concession for the oil fields of Mesopotamia went to the English; but the signature of the Sultan is still lacking to that piece of paper.

English statesmen announced that the Bagdad railroad was a purely private enterprise, financed in Germany by people associated with the Deutsche Bank. They had later to confess that error. Germany laughed and later openly announced that the Bagdad railroad was a Prussian enterprise of state. In fact, this concession, which is likely to be famous in history when the Allies win, was handed over to the German Emperor personally by the Sultan.

Already a thousand miles of this road have been constructed through Asia Minor to Mosul. The concession carries the mineral rights for ten miles on either side of the railroad, except through the oil fields of Mesopotamia, said to be among the greatest of the oil fields of the world. They are really part of the famous Russian oil territory between Batum and Baku, or the Black and Caspian seas, which extends not only south into Mesopotamia but is now being developed far to the north in the Ural Mountains of Great Russia.

Steadily the influence of Germany progressed with Turkey, now through one channel, now through another. When the Bulgarian war broke out, it was German guns and German officers and German money that upheld the Turks. The French put their money on Bulgaria by bank loans to her treasury. The Russians backed Servia. The French laughed and so did all Europe when the Turkish troops manned by German officers were beaten back to Constantinople and the Bosphorus.

Austria extended the hand of friendship to Bulgaria and induced her to attack her allies, Servia and Greece, thus making the second Balkan war. The result was the loss by Bulgaria of part of the territory she had acquired and a further augmentation in the importance of Servia. Bulgaria has never forgiven either Servia or Austria for this defeat.

The Servians are the pure-blooded Slavs, while the Bulgarians have a Turkish admixture, whence their great fighting qualities. The Roumanians just north of Bulgaria are Italians, and the defeat of Turkey in Africa by Italy did not lessen the importance of this enterprising nation on the Danube, fronting Austria-Hungary and Russia. Both Austria and Germany were losers in all three wars; while the treaty ending the second Balkan war magnified Servia of the Slav race of Russia. This is the important and crucial point in race and geography.

Austria, as the hand of Germany, still demanded a union of all these Balkan states with Turkey and under the aegis of Austria,—which meant, of course, Germany.

The aim of Germany in alliance with Turkey was, through Austria in quasi-sovereignty over the Balkan states, to carry German influence by the Bagdad railroad right through Asia Minor to the Persian Gulf. Germany would thus be, when the work was finished, a mighty military empire with rail communications cleaving the center of Europe and extending through Asia Minor to Eastern waters. With her growing steamship lines she would touch her colonies in the Pacific and her mighty naval base at Kiao-Chau in the Far East.

Now, while Germany is besieged on all sides and Italy and Roumania are preparing to go into the war with the Allies that they may have their part and parcel in the settlements, it is recognized that it is none too early for the Allies to consider the map of the entire eastern hemisphere and tackle that most difficult problem, the Bagdad railroad, from which Turkey, Asia Minor, Mesopotamia, and Palestine, the great historic countries of the world, must be parcelled out or dominated and developed.

The followers of Mohammed are no longer a unit. They number 175,000,000 people in the aggregate, but India and Egypt have gradually receded in sentiment from decadent Turkey, now numbering only about 20,000,000 people, and defended by an army of about 1,000,000. But this is no longer an army of united, fighting Mohammedan Turks; only a mixed army lacking in unity, discipline, efficiency and financial base.

Indeed, such are the financial straits of Turkey that a ten per cent tax has been levied upon the property of the people. If you hold property in Turkey and cannot pay ten per cent of the value the authorities have assessed against it, it may be sold or confiscated for the tax.

Where the money goes, nobody knows. German influence with Turkey has a financial base; 6,000,000 pounds sterling or 100,000,000 marks went from Germany to Constantinople just before the war, according to reports I have from people in the international exchange markets. From diplomatic sources I learn that this was just one half of the payment made by Germany to Turkey. The other 100,000,000 marks was probably paid in war supplies, including the two famous German warships that the English allowed to escape from the Mediterranean into Turkish waters.

The little English boy was right who returned from school the other day and said, "Hurray! I don't have to study any more geography; the old maps are to be torn up and the new map has not yet been made."

It is because of the making of this new map that European diplomacy is rolling on underneath the surface faster than ever before. Bulgaria has demanded as the price of her neutrality that she shall have what she lost in the second Balkan war. The Allies have responded: "What you get must depend upon what Servia gets from Austria and in the carving up of Albania." Austria-Hungary may lose Bosnia, Herzegovina, Dalmatia, and some more. So far as Servia acquires territory here Bulgaria may push farther south, recovering Adrianople and more sea coast on the Aegean.

Roumania wants Transylvania just north in Hungary, occupied by 2,500,000 people, the majority Roumanians—this will make her 10,000,000 people—and Italy wants territory from Austria and naval ports on the Adriatic sea.

Neither Italy nor Roumania has its full war supplies and equipments. Servia, however, has been terribly pounded by Austria and but for her good fortune in pushing Austria back out of Servia in December, the Roumanians with their 450,000 well-organized troops might have had to come to her assistance earlier than was prepared for. Indeed, it is now expected that Italy and Roumania will move against Austria within a few weeks. Russia and the Allies are making their agreements for this intervention.

And what does America know about these movements on the European chessboard, and upon what basis should she aspire to be arbiter or peace adviser?



Signs of War not Conspicuous—Paris reopened—A Rejuvenation—English and American Help—French Casualties—French Heroes.

One enters France nowadays by the Folkestone and Dieppe route, which is a four-hour Channel trip or longer, or by Folkestone and Boulogne, a Channel trip of ninety minutes more or less. All the routes to Calais are used by the government for its troops, supplies, and munitions. England's hospital base is at Boulogne. Here is the center of her Red Cross work, with a dozen big hospital ships commandeered from the P. & O. line and bearing distinctive stripes around their hulls. One hospital ship is set apart for the wounded Indians, and the apartments within are fitted up according to the various religious castes prevalent among the troops of India now fighting in France and Flanders. Here at times puts in Lord Zetland's yacht, fitted out by Queen Alexandra for wounded English officers.

When you travel by rail, if you did not know that war was in the country you would never suspect it, unless you wondered why a red-hatted, blue-coated guard, with a rifle carelessly swung over his shoulder, is noticeable now and then by a cross-road or near the buttress of an important railroad bridge. You pass trains of troops, but the uniforms are quiet, the men jovial and unwarlike. The wounded are not conspicuously moved by day.

Although you are not many miles away from the firing line, where an average of more than ten thousand are daily falling, the country is as peaceful and quiet as can be imagined. The big black and white horses are winter ploughing. The red and black cattle and the sheep and hogs are grazing in fields and pastures. The reddening willows speak of an early spring, and the full blue streams tell the brown grasses, and the tall poplars that their colors will soon be gayer.

As the shadows fall, no guard comes as in England to pull your curtain down according to military orders; and, as you approach Paris, you see families dining by uncurtained windows in blazing light. You are astonished after your London experience of semi-darkness to find the boulevards ablaze and no apparent fear of aerial enemies or sky-invasion, although aeroplanes and Zeppelins and bombs may be flying and fighting only eighty miles away. Now and then a searchlight illumines the heavens, but even searchlights are far less conspicuous than in London. In January the lights were ordered to be lowered; but Paris will not stand for long London fog, gloom, or darkness. The French atmosphere and life demand light.

Paris is gradually getting accustomed to the situation. More than 30 first-class hotels are partially opened and advertising. Many of the business streets have a semi-Sunday appearance. Boulevards running from the Place de l'Opera are well filled with people, and nearly all of the stores are now open. In the first weeks of December you could see the reopening day by day, and when on the 10th the government returned to Paris, the art stores and the jewelry stores joined with the confectioners, trunk dealers, and book-men, and threw open shutters that had been closed four months.

Paris is now normal but not crowded. Theaters are reopening, but the restaurants must be closed at ten P.M. The inhabitants young and old picnic in the Bois de Boulogne and evince most interest in the defences about the Paris gates,—the moats, the new trenches that have been dug, and the tree-trunks that have been thrown down with their branches and tops pointing outward as though to interrupt the progress of an enemy. Buildings have been taken down, and the forts of Paris stand forth as never before; but when you learn how unmanned and how useless they are in modern warfare, you can but smile and join with the people in their curiosity excursions. A single modern shell can put a modern stone-and-steel fort, garrison and guns, entirely out of commission.

A year ago Paris looked dirty and decadent. Her building fronts were grimy, her streets were dirty, and there was a general carelessness where before had been art, precision, and cleanliness. To-day Paris streets are clean. There is even more evidence of rebuilding and of modern conveniences. Motor street-sweepers whirl through the squares, not singly but in pairs and more extended series, and they move with automobile rapidity, quickly cleansing the pavement.

I was reminded thereby of a personal experience at the breaking out of the Spanish-American War. At breakfast on a Sunday morning with one of America's most successful millionaires, I said, "How is it possible that the stock market can be rising as the country is going to war—a war that may cause some of our new warships to turn turtle and may bring bombardment upon our sea-coast cities? Yet before the guns are booming the stock market is booming. Indeed, the stock market began to boom from the time we declared a state of war."

And this successful multi-millionaire replied quietly, "Stocks are going up because I am buying them and every other intelligent capitalist is buying them. Look out of the window there. That sweeper at the crossing has straightened up and is sweeping that crossing better and with more energy because the flags are flying, and the bells are ringing, and the guns will soon be booming. War is the greatest energizer of a people. There is now profit in industry and enterprise, and financial equities have increased value." And for nearly ten years the stock market booms followed in the wake of that war boom, while construction and upbuilding went steadily forward despite agitation and restricting laws.

It would astonish Mr. Wilson and Mr. Bryan to know how many patriotic Americans are helping France and what they are doing in Red Cross and other work. I was surprised to meet a former member of the New York Stock Exchange in a khaki uniform. I said, "Are you still an American citizen?" He responded promptly, "Certainly I am, but would not the boys on the floor of the Exchange be astonished to see me in this uniform?"

I said, "Were there not men enough here to do this work?"

He responded, "Possibly, but quick organization was wanted, and I volunteered and have held the job." And he was off in his high-powered automobile for a run down behind the firing line to one of the Channel ports.

As the casualties of the French have been ten times those of the English, American and English sympathizers have turned to France to see if they might "do something." An English lady with small feet and delicate hands responded to the spirit of the hour, left her English home and her servants, and went to the hospital front in France. She wrote home: "I am helping not only to dress the wounds, but to wash dishes. My soft hands are parboiled but hardening; my feet are sore; and my legs are swollen. I lie down thoroughly exhausted every night, but I am doing something and am happy."

Mrs. W. L. Wyllie, wife of the famous marine etcher on the south English coast, looked out upon the Channel war-scenes, and took ship for France. She found the center and south of the country one vast hospital. At Limoges alone she found more than 12,000 wounded, and 32,000 wounded had passed through that city. She found the hospital in need of special bandages and cross-bandages for multiple wounds, and back she flew to England for bales of bandages. For weeks she was crossing and recrossing the English Channel. Soldiers have recovered from as many as twenty and thirty bullet-wounds in the flesh.

An American lady assisting in the English Red Cross work told me that she saw 2000 wounded every day for eleven days arriving at Boulogne. About the middle of December I learned that orders had been given to clear the Boulogne hospital base and prepare for a large number of wounded. Relief days for the troops at the front were shortened, and it was intimated to me in good quarters that the Germans would enjoy no Christmas in their trenches. The Allies advanced, counted their dead and wounded, and ceased in the attack.

I do not believe that any great forward movement can be made on either side from or against these trenches in the winter time. In good strategy and diplomacy, the break-up of Germany should come from other quarters.

There is considerable typhoid arising from the trench-work, but I heard it stated in medical circles that the Servian troops, with their milder climate, had found a new way of healing wounds. Not having the hospital base and equipment of other countries, they heal their wounds in the open air with the result that there is no tetanus or lock-jaw. In Switzerland human tuberculosis is now being cured by exposing the chest, directly over the affection, to the full rays of the sun.

The casualties of this war have been tremendous for France. No lists of her dead or wounded are published; it was at first a life-and-death struggle. While the total casualties—killed, wounded, missing, and prisoners—were estimated in the press reports and by the people as 600,000, I happen to know that they were more than 1,000,000. Of these, of course, one third or more will return to the battle-line, and the French have the satisfaction of knowing that the German losses are far larger. But, viewed from a financial standpoint, if this war is not too prolonged or too costly in life and treasure, France will emerge from it rejuvenated and reenergized.

Her people are serious and determined as never before. They now welcome strong work and strong hands, and if the Republic does not respond to the responsibilities of the hour, they will not as in 1870 burn and destroy, but will set up another government in quick order and wipe out the weakness and inefficiency found to exist when the strain came in August, 1914.

The French nation has never before been put to such a trial. In every other war there has been no threat of the destruction of France. Indeed, up to 1870 France was the great nation of Europe, greatest in war as well as greatest in peace. When she attacked Germany in 1870, she started for Berlin with full confidence in her greatness. And when she paid to the Germans a billion dollars in 1871, it was with scorn and contempt: "Take your money and get out!"

When Bismarck in 1875 discovered the prosperity of France, he cunningly set about encompassing her downfall. He knew the world would not approve of Germany attacking a foreign foe; there was no excuse that could be found.

Therefore, as he himself has confessed, he started France into empire-colonial upbuilding in Africa and Asia, with the full intention of leading her into a clash with England. When this point was reached many years afterwards, Delcasse clearly saw the situation, and, instead of war, made friends with England. All the world knows the result. Germany demanded his resignation from the French Cabinet under threat of war. France was humiliated, Delcasse dropped. Later he led the movement to strengthen the navy of France as well as the army. It may be declared that Delcasse created the Triple Entente and thereby saved France and Europe. To-day France fights a wholly defensive battle, supported on the one side by the Russian bear and on the other by the British lion. And strongest in the new cabinet of France stands Delcasse.

France was chastened by the war of 1870. She will be crushed or redeemed by the war of 1915. The spirit of her people to-day is the spirit of sacrifice. The French character never before shone forth so nobly.

"What a terrible disfigurement!" exclaimed a thoughtless lady as she visited the wounded in a great French hospital.

"Not a disfigurement at all, madame," exclaimed the French soldier. "A decoration!"

Out of this war may come great political and military heroes. There is one general in France to-day whose name is not widely known but of whom his associates say, "He is not only the equal but the superior of Napoleon." But the great hero throughout Europe to-day is the King of the Belgians, of that little country that grew daily bigger in the eyes of the world as it grew daily smaller in possessed territory. There are those who believe that France and Belgium will be hereafter closer together than before, and that—stranger things have happened—the King of the little Belgians might be no greater miracle for France than the little Corsican more than one hundred years ago.



The Iron Hand of War—Paris offered in Sacrifice—Faulty Mobilization—The French Army—The Joffre Strategy—The German Retreat.

The position of France to-day cannot be compared with that of any other country in the war. The French people have a distinctive genius all their own. They are still the greatest people in art in the world. Nothing in sculpture or painting in the outside world yet rivals the skill of France. Politically the French are trusting children, vibrating between empires and republics, and following only the rule of success. In finance they were accounted great a generation ago. In savings they have been regarded as world-leaders.

When the stern reality of military necessity suddenly confronted France five months ago, there was the same old story of graft, fraud, and a deceived people.

But the war authorities gripped France with an iron hand. The military traitors and grafters are in jail. The weaklings in the official line have been cashiered. The politically undesirable have been given foreign missions.

There was political as well as military wisdom in the return of the government from Bordeaux to Paris. The French people were shocked when they learned that the boasted military defences of Paris, "the most extensive fortifications in the world," embracing 400 square miles, were unprovisioned and indefensible, that the government had fled, and that there was no army to save the city.

Indeed, the authorities had determined to sacrifice Paris to save France. General Joffre had no men to spare to be bottled up in the city. He determined that his armies should be kept free on the field.

You may ask anywhere in France, Belgium, or England why the French did not come to the relief of Belgium, why Paris was undefended, and what saved it after Von Kluck had led seven armies of 1,000,000 men down to its very gates, and you will get no satisfactory answer.

But when you have studied the situation and the record, you will see that no simple answer can be readily given. A brief one would be: French mobilization plans were imperfect, and, therefore, Belgium could not be defended by the French. But motor-busses did what the railroads were unprepared to do, and finally saved Paris and France.

The French had been warned many months publicly and privately that their mobilization plans would be found faulty in case of sudden hostilities. The railways moved perishable goods at the rate of thirty miles a day while German and Austrian railways bore military trains at the rate of thirty miles an hour.

So ill prepared were the French in their mobilization plans that they actually summoned to arms the men who were to man the railways, and the railways themselves were deficient in rolling-stock to move the troops. The citizens responded promptly enough, but France had no bureaucracy or military plans to match those of Germany, and, as throughout French history, the leaders of the people failed at the crucial moment. The plodding English had to help out the French railway plans, and then had to turn around and find their own railroad defects. When England first sounded the call to arms, men deserted the railroad service to go into training to such an extent that the authorities had to stop it and maintain transportation as, of course, an important arm of the war-service.

The history of the unpreparedness of both England and France has yet to be written. It would not be useful to print much that is already known. There are two political sentiments in both countries, and political issues will rise again in both after the war.

A little contemplation here will show the extravagance of many estimates of the number of men to be put in the field in time of war. Many estimates have taken little account of the number of men required to handle a modern transportation service, and the supply organization to back up an effective army at the front. Transportation and war-supplies are on such an expanded basis as was not dreamed of a few years ago. The war plans of one generation cannot be the war plans of another either on land or sea. That France had 4,500,000 men capable of bearing arms did not mean that she could hold 4,000,000 men in fighting array at any one time.

After five months of war France had only 1,500,000 men at the front, and from the camps and military organizations she expects to have ready a fresh army of another million in the spring. But she mobilized nearly 4,000,000 men. Paris industry, trade, and commerce could shut down in a day, but there was no organization that could make in a day or a week the men of France into an army at the front. Her 600,000 regular troops were, of course, always in position to be thrown on the defensive at the German frontier. None of the nearly 4,000,000 additional men could be got with arms and munitions of war into Belgium, to meet effectively the trained troops of Germany.

The German troops were "moving" as early as July 25, while all the governments of Europe, including Austria, were negotiating for and hopeful of peace. When war was declared against France, she promptly offered Belgium five French army corps for defence. King Albert declined, saying there had been no invasion of Belgium by Germany, and that Belgian neutrality was guaranteed by treaty. Within two days the German guns were firing on Belgium; but when King Albert then called upon France for protection, the response was that the French troops which had been offered had been placed elsewhere. The regular troops probably had. The new troops were not mobilized, and the French transportation system, to say the least, had not been as responsive as expected.

France paid dearly for her unpreparedness. Her richest provinces were invaded by the Germans and are still held by the Germans in considerable part.

Caught unprepared, there was only one safe thing for General Joffre to do—let the Germans expand far from their base while the French concentrated between the German border and Paris, to strike back at the opportune moment against an extended and weakened line.

The march of the armies of Von Kluck—"General One O'clock," they called him, and said his fiercest attacks were at one o'clock—is considered a masterpiece of military precision. The strategy of General Joffre which foiled him is praised throughout France.

The plan of the Germans was to hold the north of France with the army of Von Kluck while the Crown Prince moved from Luxemburg straight to Paris. This was theatrical, dramatic, and Kaiserlike; but the French would not consent. They persisted in holding Verdun and defeating the armies of the Crown Prince.

The English are the greatest fighters in the world in retreat, while the French can fight best in a forward movement. The little expeditionary army of England, originally 100,000 men but at this time 180,000 men, held the right flank of Von Kluck in the retreat from river to river, from hill to hill, although pounded by 350,000 trained German troops massed on this flank. This retreat put the stamp of English bravery and dogged determination, as before, on the map of Europe. Paris was open and exposed to any entry which the Germans wished to make. The government had retired, the gold reserves of the banks had been moved, the people in large numbers had fled.

Indeed, I may say what has never before been printed, that President Poincare summoned the "architect" of the city to the American embassy and, with tears streaming down his face, told him whence he must take his orders in the future.

Then in a flash went the orders of Joffre along his whole concentrated line of troops: "The retreat has ended, not another foot; you die here or the enemy goes back!" He had chosen the psychological moment. The French and English had burned and broken the bridges as they retreated, and with the recoil the German communications were in danger.

A fresh force of 50,000 held in reserve near Paris flew by motors and motor-busses against the right wing of Von Kluck, which the English in retiring had been punishing so heavily. Von Kluck had been drawn too far into France with no support on his left from the army of the Crown Prince, which the French had held at bay but with a tremendous sacrifice of men. The German ammunition and supply-trains were broken and the armies of Von Kluck were hurled back from Paris about as rapidly as they had come forward.

Then the Kaiser took a hand and cried, "Now for the English; take the Channel ports; forward against Calais!" and again, as at Liege, the blood of the Germans soaked the soil of Belgium. The Allies dug themselves into the ground behind the rivers and canals, and drowned the Germans out in front; and when an advance by the seacoast was attempted, the English naval guns spilled havoc into the German battalions. Four nationalities grappled in a death-struggle, but the wall of the Allies held from Switzerland to the sea. The Allies worked most harmoniously. Belgian knowledge of topography proved superior to the German general-staff maps. The English buttressed the French financially and in transportation and food-supplies. Indeed, Kitchener at one time fed two French army corps, or 80,000 troops, for eleven days without a hitch.

Although England had not the trained men, she had the fundamental military organization, transportation, food, and finance.



Delayed Budgets—The Caillaux Position—Outgeneralled in Finance—Gold Reserves Undiminished—Allied Finance—No Financial Legislation—The National Defense Loans.

The spectacle of England loaning money to rich France—20,000,000 pounds sterling, or $100,000,000—was something most surprising.

The French have been considered among the best financiers and economists of Europe. The whole world has been envious of the saving ability of France, and has invited the overflow of her accumulations into their local enterprises. For many years France has had the lowest interest rates and a considerable surplus to invest in outside countries. It is upon France that Russia has mainly relied for funds for her expanding industrial development. In the Baring crisis she sent her gold to London to fortify the situation, and in the American crisis of 1907 she extended her hand across the sea. Then she turned about and steadily built up her gold reserve in the Bank of France, from $500,000,000 to above $800,000,000, although her people were not expanding in population, industry, or enterprise. France had grown so confident that she seemed at one time to have lost her financial cunning.

In Germany in 1913 I was told that German finance had passed through the "fire test," that two years of building recession and of expanding commerce had placed her on a solid financial base; and it was true.

I was told to step over to Paris and see a disordered budget, an increasing national deficit, bad investments in Mexico and South America, and disorganized finance. I did and found it all true. I also found that France was fully able to take care of herself without any outside help, and, but for the specter of outside interference, to delay her financing if she so elected.

It has been something of a mystery as to how there could be two Balkan wars and so little of public finance behind them. Of course, Russia and France helped the Balkan States and Germany helped Turkey. The money of France came from the French banks and was loaned to the treasuries of the Balkan States and to Greece—to Bulgaria 350,000,000 francs; to Greece 250,000,000.

The French government said that this could not be financed by public issue after the war until the national budget itself had been arranged, although French bankers were permitted to float a $50,000,000 Servian loan. With the increasing cost of labor and supplies the French railways had been steadily running behind, and France had to face a deficit in her budget of something like 1,000,000,000 francs, or $200,000,000, per annum.

It was proposed last January that the government should consolidate its indebtedness and put its financial house in order, by an issue of long-term securities; but Caillaux opposed the programme and defeated it for many months. This postponed the issue of the Balkan States' loans.

To-day Caillaux is about the most hated man in France. Although he is financially well-to-do, the people believe that his connections and sympathy with Germany were too close. The German press took his side in the famous Calmette shooting affair and the trial of Madame Caillaux, and all this record now stands forth most threateningly in the French blood.

I may perhaps be permitted to say that M. Caillaux has been under arrest, and that the police of Paris have declared they would not be responsible for his safety. It has, therefore, been diplomatically arranged by the government that he should be now in Brazil upon a semi-diplomatic and trade mission.

The French loan just before the war was not a popular success. The reason is now obvious. It was sold short from other European capitals where it was better known that war was in the air.

When a famous "bear" operator reappeared upon the Paris Bourse after his return from Vienna, whence he had conducted his attack on the French loan, he was greeted with a storm of hisses. The French Bourse is a government institution and must support the credit of France and her allies. In Vienna they knew war was planned for the end of September, even before the assassination of the Austrian Crown Prince at Serajevo June 28. This event hastened but did not make the war.

Nevertheless, instead of permitting the French banks to bring out the Balkan loans thereafter, the French authorities allowed Turkey to come into the French market with a loan for 25,000,000 pounds, or 625,000,000 francs.

Some people pleaded with them that this money would be used against France, and that every franc would go to repay the German loans; and they were right.

In this financial situation France was suddenly plunged into war, and while Germany and England have been raising money by the billion, the marvelous thing is that France has made no public issue beyond one-year notes, but continues to pay her bills in gold and has the exchanges all in her favor. Money is flowing in, and not out.

It was most marvelous to find in France, in the fifth month of the war, prompt payment, no distrust of the government paper issues, gold and paper circulating side by side, and no strain for gold as in Germany.

Nevertheless, the war has been fought thus far for the most part on the paper issues of the Bank of France and with the gold reserve of that bank undiminished.

This is most remarkable.

The first reason I can assign for it is that the French soldier gets twenty-five centimes, or five cents a day, or one fifth the pay of an English soldier. Kitchener's army is to-day costing far more than the entire French army. French food is locally abundant and cheap, notwithstanding the octroi, or French local tax of one eighth. The main need of the French from the outside is boots and horses. The English in France are not taxing French resources at all. All their food-supplies, including the hay for their horses, come from England.

The English troops are also well supplied with money from home. Outside the regular Tommy Atkins, the volunteers and territorials coming into France have abundant money. They are the men from the cities and from the wealthiest families in the country life of England. There are more than 300,000 of them on French soil, and as they come and go in France, they are spending not less than four shillings a day each, or nearly four times their wages. This makes a daily expenditure of 60,000 pounds sterling in France, and calling for exchange. Hence the English pound has been at the lowest price in France on record, 24.95 and sometimes 24.90.

There is also the additional reason of higher insurance rates for the transportation of money across the Channel,—a channel infested with mines and submarines. It is no uncommon thing for boats crossing the Channel to sight floating mines, and the wonder is that disasters therefrom have been so few.

The third reason is that France has very large investments and credit resources outside, and can still summon money from abroad.

You see more English than French soldiers in the life of Paris. Their khaki uniforms are as conspicuous there as in London.

The character of the early enlistments for the front in London is illustrated by the following story. An officer entered a restaurant where a group of English soldiers in khaki uniforms were enjoying their cigarettes and pipes. The officer threw some shillings on the table and called, "Waiter, give these men some beer."

And a khaki uniform snapped forth a sovereign on the same table, and cried, "Waiter, give this officer some champagne."

Bank statements are queer contraptions nowadays. While the United States, with less gold in the country and less reserve in the banks than formerly, is showing the most enormous surplus—and a legitimate and better-protected surplus by reason of the new bank act—and the Bank of England is counting $100,000,000 of gold in Canada as a London bank reserve, and Russia has counted, as gold in her reserve, money on deposit which has been loaned out on time; while Belgium is doing a banking business from an English base, and Germany is inviting gold from the jewelry of her inhabitants and boasting her gold strength, the Bank of France refuses to publish any statement, makes no boast, but holds more gold than ever before in her history.

Only a few weeks before the war was her metal base put above $800,000,000. Then she suspended official statements until one was made to the government December 10, and this showed $880,000,000 metal base, or 4,500,000,000 francs. Upon this her note issue, which was formerly 5,800,000,000 has been expanded to nearly 10,000,000,000. She is authorized to issue up to 12,000,000,000 francs in paper.

From this metallic base she increased her bills receivable by 3,000,000,000 francs, or about the same amount that the Bank of England discounted in pre-moratorium bills under the backing of the government. Each country took on $600,000,000 of mercantile credits, and both countries are now finding this item receding. In France the mercantile credits have been considerably reduced—the increase reduced nearly a half—because the men are at the front and business is not calling for the credits formerly in use.

The Bank of France also promptly advanced 8,000,000,000 francs or $400,000,000 to the government.

In the last few weeks of 1914 the finances of Russia, France, and Belgium became interlaced with those of England, and gold credits for the Allies' supplies were established around the world, shipments from North America going both east and west into the European war. Government credit with the Bank of France was then extended, but should not early in January have been more than $800,000,000.

This is the main financial assistance on which France for five months conducted a successful defensive warfare, with 1,500,000 men at the front and nearly 3,000,000 men behind them.

The next most remarkable financial feature in respect to France is that there has been no special financial legislation, in fact no financial legislation whatsoever, except the December budget vote to cover government expenses, including the war. A moratorium was set up by decree, but authorization for this already existed under the general laws. Under this moratorium payments were permitted at first of 5 per cent, then 25 per cent. Later depositors were permitted to draw from the banks 40 per cent, and 40 per cent payments became the rule. Then 50 per cent for December, and in January, 1915, full payment to bank-depositors, although legally the moratorium stands to March 1, 1915.

Among other temporary devices in French finance was the issue by French chambers of commerce in the south of France of small pieces of paper,—as low as 50 centimes or 10 cents,—used only for circulation and change locally.

Many banks closed their branches because they had not the clerks to man them. Many bankers lost three fourths of their staff when the mobilization orders were issued, and all over Paris the banks are closed from twelve to two because of the limitations of the staff. When the Credit Lyonnais reopened its branch in the Champs Elysees a few weeks ago it was manned by women clerks.

The government loan issued in the summer of 1914 met less than half of the floating indebtedness and 1914 ordinary deficit. The balance as maturing has been merged into the national-defense loan, which is only short-term financing. On the 10th of December there were 1,000,000,000 francs of the new national-defense loan outstanding, but it was being subscribed for all over France daily. This national-defense loan consists of three, six, nine, and twelve months' government bills bearing 5 per cent interest. I figured that the amount issued December 10 was for the most part used to provide for the maturing floating indebtedness, and for the deficit on the government budget aside from the expense of the present war.

As the government is advancing money to Servia and to Belgium, the loan of 20,000,000 pounds, or $100,000,000, from England can be readily accounted for.

There were loans from the big banks of France for the government at the opening of the war, but these loans I was assured were all merged in the 5 per cent national-defense loans, which have not exceeding one year to run.

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