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+Project Gutenberg's The War After the War, by Isaac Frederick Marcosson
+
+This eBook is for the use of anyone anywhere at no cost and with
+almost no restrictions whatsoever.  You may copy it, give it away or
+re-use it under the terms of the Project Gutenberg License included
+with this eBook or online at www.gutenberg.org
+
+
+Title: The War After the War
+
+Author: Isaac Frederick Marcosson
+
+Release Date: May 12, 2006 [EBook #18380]
+
+Language: English
+
+Character set encoding: ISO-8859-1
+
+*** START OF THIS PROJECT GUTENBERG EBOOK THE WAR AFTER THE WAR ***
+
+
+
+
+Produced by Irma Špehar, Martin Pettit and the Online
+Distributed Proofreading Team at http://www.pgdp.net (This
+file was produced from images generously made available
+by The Internet Archive/Canadian Libraries)
+
+
+
+
+
+
+THE WAR AFTER THE WAR
+
+[Illustration: Photograph - (signed) Let freedom win - D Lloyd George]
+
+
+                    THE WAR
+                 AFTER THE WAR
+
+                      BY
+
+               ISAAC F. MARCOSSON
+
+ CO-AUTHOR OF "CHARLES FROHMAN, MANAGER AND MAN"
+ AUTHOR OF "THE AUTOBIOGRAPHY OF A CLOWN," ETC.
+
+          NEW YORK: JOHN LANE COMPANY
+       LONDON: JOHN LANE, THE BODLEY HEAD
+       TORONTO: S. B. GUNDY : : : MCMXVII
+
+
+
+COPYRIGHT, 1916, BY THE CURTIS PUBLISHING COMPANY
+     COPYRIGHT, 1916, BY THE RIDGWAY COMPANY
+
+                Copyright, 1917,
+              BY JOHN LANE COMPANY
+
+
+                   Press of
+          J. J. Little & Ives Company
+                New York, U.S.A.
+
+
+
+                      TO
+               LORD NORTHCLIFFE
+           IN GRATEFUL APPRECIATION
+
+
+
+
+
+_FOREWORD_
+
+
+For nearly three years Europe has been drenched with blood and rent with
+bitter strife. Millions of men have been killed or maimed: billions of
+dollars in property have gone up in smoke and ruin--all part of the
+mighty sacrifice laid on the Altar of the Great War.
+
+This tragic tumult must inevitably subside. The smoke of battle will
+clear: the scarred fields will mantle again with springtime verdure: the
+fighting hosts will once more find their way to peaceful pursuit. Time
+the Healer will wipe out the wounds of war.
+
+The world already wearies of the Crimson Canvas splashed with martial
+scene. Heroism has become the most commonplace of qualities: it takes a
+monster thrill to move a civilisation sick of destruction. With eager
+eye it looks forward to the era of regeneration. War ends some time.
+
+Business never ceases. Under the shock of mighty upheaval it has been
+dislocated by the most drastic strain ever put upon the economic
+fabric. But it will march on long after Peace will have mercifully
+sheathed the Sword. Therefore the permanent world problem is the
+Business problem.
+
+This is why I made two trips to Europe: why I submit this little book in
+the hope that it may point the way to some realisation of the immense
+responsibilities which will inevitably crowd upon the world and more
+especially upon the United States.
+
+Peace will be as great a shock as War. Hence the need of Preparedness to
+meet the inevitable conflict for Universal Trade. We--as a nation--are
+as unready for this emergency as we are to meet the clash of actual
+physical combat. Commercial Preparedness is as vital to the national
+well being as the Training for Arms.
+
+Nor will Commerce be the only thing that we will have to reckon with.
+When you have heard the guns roar and watched horizons flame with fury
+and seen men go to their death smiling and unafraid; when the pitiless
+panorama of carnage has passed before you in terms of terror and
+tragedy, you realise that there is something human as well as economic
+in the relentless Thing called War.
+
+It means that just as there was no compromise with dishonour in the
+approach to the Super-Struggle for which nations are pouring out their
+youth and fortune, so will there be no flinching in that coming contest
+for commercial mastery--the bloodless aftermath of History's deadliest
+and costliest war.
+
+We have reached a place in the World Trade Sun. Unless we are ready to
+hold it we will slip into the Shadow.
+
+We must prepare.
+
+                                                     I. F. M.
+
+
+
+
+_CONTENTS_
+
+
+
+CHAPTER                            PAGE
+
+   I.  THE COMING WAR                15
+
+  II.  ENGLAND AWAKE                 40
+
+ III.  AMERICAN BUSINESS IN FRANCE   71
+
+  IV.  THE NEW FRANCE                98
+
+   V.  SAVING FOR VICTORY           120
+
+  VI.  THE PRICE OF GLORY           164
+
+ VII.  THE MAN LLOYD GEORGE         210
+
+VIII.  FROM PEDLAR TO PREMIER       258
+
+
+THE WAR AFTER THE WAR
+
+
+
+
+I--_The Coming War_
+
+
+While the guns roar from the North Sea to the Mediterranean, and the
+greatest armed host that history has ever known is still locked in a
+life-and-death struggle on a dozen fronts, another war, more potent and
+permanent perhaps than the one which now engulfs Europe, lurks beyond
+the distant horizon of peace.
+
+Its fighting line will be the boundaries of all human needs; its dynamic
+purpose a heroic rehabilitation after stupendous loss. It will be the
+far-flung struggle for the rich prize of International Trade, waiting at
+the end of the Crimson Lane that sooner or later will have a turning.
+
+Embattled commercial groups will supplant embroiled nations; boycotts,
+discriminations and exclusions will succeed the strategies of line and
+trench; the animosities fought out to-day with shell and steel will have
+their heritage in ruthless rivalries.
+
+How shall we fare in this tumult of tariff and treaty? Where shall we
+stand when the curtain of fire fades before a task of regeneration that
+will spell economic rebirth or disaster for millions? Will fiscal
+punishment be meted out to neutral and foe alike? Will reason rule or
+revenge dictate a costly reprisal in this war after the war?
+
+These are the questions that rise out of the dust and din of the
+colossal upheaval which is rending half of the world. Directly or
+indirectly they touch the whole American people, regardless of rank or
+wealth. The tide of war has rolled us far upon the shores of world
+affairs. We have prospered in the kinship of the nations. Will the ebb
+of peace leave us high and dry amid a mighty isolation?
+
+I went to England and France to study this problem at first hand. I
+interviewed Cabinet Ministers; I talked with lawmakers, soldiers,
+captains of capital, masters of industry, and plain, everyday business
+men. Often the talk was disturbed by shriek of shell or bomb of midnight
+Zeppelin marauder.
+
+Through all the travail of debt and death that rends the allied peoples
+runs the clear current of determination to retrieve the immense loss.
+War is waste; some one must pay--we among the rest. Already the guns are
+being trained for the inevitable commercial battle, which, willingly or
+unwillingly, will bring us under fire. Let us examine the plan of
+campaign.
+
+But before going into the concrete details that mean so much to our
+future and our fortune, it is important to understand some very
+essential conditions.
+
+First and foremost is the uncertainty of the war itself. All
+prophecy--at best a dangerous thing--is purest speculation. No one can
+tell how long the duel will last; how badly the loser will be beaten;
+what the terms of peace will be. Yet out of these contingencies will
+emerge the strong hands that will redraw the trade map of the world.
+Whatever the outcome, the countries now fighting, especially the Allies,
+have definitely stated the principles that must govern--for a long time,
+at least--the whole realignment of commercial relations. Their way shall
+be the universal way.
+
+In the second place, be you Ally or Teuton and regardless of how you may
+feel about the ethics of the Great Struggle, it must be remembered that
+behind the glamour as to whether it is waged to conserve human liberty,
+maintain the integrity of "scraps of paper" or to safeguard democracy,
+the larger fact remains that it is a war rooted in commercial jealousies
+and fanned by commercial aggressions.
+
+Now we come to the really vital point, and it is this: When the guns are
+hushed you will find that national and industrial defence among the
+warring countries will be one and the same thing. The Allies learned to
+their cost that the economic advance of Germany was merely part of her
+one-time resistless military machine. Her trade and her preparedness
+went conqueringly hand in hand. Henceforth that game will be played by
+all. England, for instance, will manufacture dyestuffs not only for her
+textile trades, but because coal-tar products are essential to the
+making of high explosives.
+
+Thus, Competition, which was once merely part of the natural progress of
+a country, will hereafter be a large part of the struggle for national
+existence.
+
+There is still another factor: No matter who wins, peace must mean
+prosperity for everybody. For the victor it will take the form of an
+attempted stewardship of trade and navigation; for the vanquished it
+will be the dedication of a terrible energy to the twin restoration of
+pride and product.
+
+Now you begin to see why it is up to the United States to make ready for
+whatever business fate awaits her beyond the uncertain frontiers of
+to-morrow. Nor have we been without warning of what may be in store for
+us. Prohibitive tariffs, blacklists and boycotts, embargoes on mail and
+cargo, the exclusion from England and France of hundreds of our
+manufactured articles--all show which way the international trade winds
+may blow when the belligerents begin to take toll of their losses.
+Meantime, what are the facts?
+
+Take the case of England. Thirty years ago she was the workshop of the
+world. From the Tyne to the Thames her factories hummed with ceaseless
+industry. Her goods went wherever her ships steamed, and that meant the
+globe. Supreme in her insularity--at once her defence and her
+undoing--she became infected with the virus of content. Her steel was
+the best steel; her wares led all the rest. "Take it or leave it!" was
+her selling maxim. When devices came along that saved labour and
+increased production she refused to scrap the old to make way for the
+new. Born, too, was the evil of restricted output. Moss began to grow on
+her vaunted industrial structure. England lagged in the trade
+procession.
+
+But as she lagged the assimilative German streamed in through her
+hospitable door. He served his apprenticeship in British mills; took
+home the secrets and methods of British art and craft. He geared them to
+cheap labour, harnessed product to masterful distribution, and became a
+World Power. Before long he had annexed the dye trade; was competing
+with British steel; was making once-cherished British goods.
+
+What the German did in England he duplicated elsewhere. The world of
+ideas was his field and, with insatiate hunger, he garnered them in. He
+cunningly acquired the sources of raw supply, especially the essentials
+to national defence; for he overlooked nothing. All was grist to his
+mills. He pitched his tents upon debatable trade lands. His rivals
+called it economic penetration, because he invariably took root. For him
+it was merely good business.
+
+Then England suddenly realised that Germany had left her behind in the
+race for international commerce. Indifference lay at the root of this
+backsliding. It was easier and cheaper to buy the German-made product
+and reship it than to produce the same article at home. Sloth hung like
+a chain on English energy. What did it matter? No forest of bayonets
+hemmed her in; she was still Mistress of the Seas.
+
+Meantime Germany dripped with efficiency and ached with expansion. Her
+amazing teamwork between state and business, stimulated by an interested
+finance, drove her on to a place in the sun. The shadows seemed far away
+when the great war crashed into civilisation. Then England woke to the
+folly of her blindness. The mystery of coal-tar products was shut up in
+a German laboratory; the secrets of tungsten, necessary to the toughest
+steel, were imprisoned in a Teutonic mill; and so on down a long list of
+products vital to industry and defence.
+
+Even those early and tragic reverses of the war did not stir the stolid
+British bulk. Men fought for a chance to fight; restriction still
+oppressed factory output. Red tape vied with tradition to block the path
+of military and industrial preparation.
+
+Then the Lion stirred; the sloth fell away; men and munitions were
+enlisted; the strong hand was put on labour tyranny; conscription
+succeeded the haphazard voluntary system. Britain got busy and she has
+buzzed ever since.
+
+When the kingdom had become a huge arsenal; when the old sex differences
+vanished under the touchstone of a common peril; when the first khaki
+host swept to its place in the battle line, and the grey fleets were
+once more queens of the seas, England turned to the task of commercial
+rebuilding, once neglected, but thenceforth to be part and parcel of
+British purpose.
+
+Animating this purpose, stirring it like a vast emotion, was the New
+Battle Cry of Empire--the kindling Creed of United Dominions,
+consecrated to the economic mastery of the world.
+
+But this revival was not an overnight performance. If you know England
+you also know that it takes a colossal jolt to stir the British mind.
+The war had been in full swing for over a year and the countryside was
+an armed camp before the realisation of what might happen commercially
+after the war soaked into the average islander's consciousness.
+
+Under the impassioned eloquence of Lloyd George the munition workers had
+been marshalled into an inspired working host; with the magic of
+Kitchener's name, the greatest of all voluntary armies came into being.
+But it remained for Hughes, of Australia, to point out the fresh path
+for the feet of the race.
+
+Who is Hughes, of Australia? You need not ask in England, for the story
+of his advent, the record of his astounding triumph, the thrilling
+message that he left implanted in the British breast, constitute one of
+the miracles of a war that is one long succession of dramatic episodes.
+This Colonial Prime Minister arrived unknown: he left a popular hero.
+
+Thanks to him, Australia was prepared for war; and when the Mother
+Lioness sent out the world call to her cubs beyond the seas there was
+swift response from the men of bush and range. The world knows what the
+Anzacs did in the Dardanelles; how they registered a monster heroism on
+the rocky heights of Gallipoli; gave a new glory to British arms.
+
+England rang with their achievements. What could she do to pay tribute
+to their courage? Hughes was their national leader and spokesman; so the
+Political Powers That Be said:
+
+"Let us invite the Premier to sit in the councils of the empire and
+advise us about our future trade policy."
+
+Already Hughes had declared trade war on Germany in Australia. Under his
+leadership every German had been banished from commonwealth business; by
+a special act of Parliament the complete and well-nigh war-proof
+Teutonic control of the famous Broken Hill metal fields had been
+annulled. He stood, therefore, as a living defiance to the renewal of
+all commercial relations with the Central Powers. But he went further
+than this: He decreed trade extermination of the enemy--merciless war
+beyond the war.
+
+With his first speech in England Hughes created a sensation. Before he
+came commercial feeling against Germany ran high. Hughes crystallised it
+into a definite cry. He said what eight out of every ten men in the
+street were thinking. His voice became the Voice of Empire. Up and down
+England and before cheering crowds he preached the doctrine of trade war
+to the death on Germany. He denounced the laxness that had permitted the
+"German taint to run like a cancer through the fair body of English
+trade"; he urged complete economic independence of the Dominions. His
+persistent plea was, "We must have the fruits of victory"; and those
+fruits, he declared, comprised all the trade that Germany had hitherto
+enjoyed, and as much more as could be lawfully gained.
+
+He urged that the blood brotherhood of empire, quickened by that
+dramatic S.O.S. call for men across the sea and cemented by the common
+trench hazard, be followed by a union of empire after the war that
+should be self-sufficient. Behind all this eloquent talk of protection
+and prohibition lay the first real menace to America's new place as a
+world trade power. It was the opening call to arms for the war after the
+war.
+
+Hughes did more than set England to thinking in imperial terms. He upset
+most of the calculations of the Powers That Be who invited him. They
+expected an amiable, able and plastic counsellor; they got an oratorical
+live wire, who would not be ruled, and who shocked deep-rooted
+free-trade convictions to the core. He helped to launch a whole new era
+of thought and action; and the next chapter of its progress was now to
+be recorded under circumstances pregnant with meaning for the whole
+universe of trade.
+
+The second winter of war had passed, and with it much of the dark night
+that enshrouded the Allies' arms. On land and sea rained the first blows
+of the great assaults that were to make a summer of content for the
+Entente cause. Its arsenals teemed with shells; its men were fit;
+victory, however distant, seemed at last assured. The time had come to
+prepare a new kind of drive--the combined attack upon enemy trade and
+any other that happened to be in the way.
+
+Thus it came about that on a brilliant sun-lit day last June twoscore
+men sat round a long table in a stately room of a palace that overlooked
+the Seine, in Paris. Eminent lawmakers--Hughes, of Australia, among
+them--were there aplenty; but few practical business men.
+
+On the walls hung the trade maps of the world; spread before them were
+the red-dotted diagrams that showed the water highways where traffic
+flowed in happier and serener days. For coming generations of business
+everywhere it was a fateful meeting because the now famous Economic
+Conference of the Allies was about to reshape those maps and change the
+channels of commerce.
+
+All the while, and less than a hundred miles away, Verdun seethed with
+death; still nearer brewed the storm of the Somme.
+
+These men were assembled to fix the price of all this blood and
+sacrifice, and they did. In what has come to be known as the Paris Pact
+they bound themselves together by economic ties and pledged themselves
+to present a united economic front. They unfurled the banner of
+aggressive reprisal with the sole object of crushing the one-time
+business supremacy of their foes.
+
+The chief recommendations were: To meet, by tariff discrimination,
+boycott or otherwise, any individual or organised trade advance of the
+Central Powers--already Germany, Austria, Turkey and Bulgaria have
+reached a commercial understanding; to forego any "favoured-nation"
+relation with the enemy for an indefinite period; to conserve for
+themselves, "before all others," their natural resources during the
+period of reconstruction; to make themselves independent of enemy
+countries in the raw materials and manufactured products essential to
+their economic well-being; and to facilitate this exchange by
+preferential trade among themselves, and by special and state subsidies
+to shipping, railroads and telegraphs. Another important decree
+prohibits the enemy from engaging in certain industries and professions,
+such as dyestuffs, in allied countries when these industries relate to
+national defence or economic independence.
+
+In short, self-sufficiency became the aim of the whole allied group, to
+be achieved without the aid or consent of any other nation or group of
+nations, be they friends or foes.
+
+Here, then, is the strategy that will rule after the war. A huge allied
+monopoly is projected--a sort of monster militant trust, with cabinets
+of ministers for directorates, armies and navies as trade scouts, and
+whole roused citizenships for salesmen.
+
+Throughout this new Bill of World Trade Rights there is scant mention of
+neutrals--no reference at all to the greatest of non-belligerent
+nations. Yet the document is packed with interest, fraught even with
+highest concern, for us. Upon the ability to be translated into
+offensive and defensive reality will depend a large part of our future
+international commercial relations.
+
+Is the Paris Pact practical? Will it withstand the logical pressure of
+business demand and supply when the war is ended? How will it affect
+American trade?
+
+To try to get the answer I talked with many men in England and France
+who were intimately concerned. Some had sat in the conference; others
+had helped to shape its approach; still others were dedicated to its
+far-spreading purpose. I found an astonishing conflict of opinion. Even
+those who had attended this most momentous of all economic conferences
+were sceptical about complete results. Yet no one questioned the intent
+to smash enemy trade. Will our interests be pinched at the same time?
+
+Regardless of what any European statesman may say to the contrary, one
+deduction of supreme significance to us arises out of the whole
+proposition. Summed up, it is this:
+
+Mutual preference by or for the members of either of the great European
+alliances automatically creates a discrimination against those outside!
+Whether we face the Teuton or the Allies' group--or both--in the grand
+economic line-up, we shall have to fight for commercial privileges that
+once knew no ban.
+
+There are two well-defined beliefs about the practical working out of
+the pact as a pact. Let us take the objections first. They find
+expression in a strong body of opinion that the whole procedure is both
+unhuman and uneconomic--a campaign document, as it were, conceived in
+the heat and passion of a great war, projected for political effect in
+cementing the allied lines. In short, it is what business men would call
+a glorified and stimulated "selling talk," framed to sell good will
+between the nations that now propose to carry war to shop and mill and
+mine.
+
+"But," as a celebrated British economist said to me in London, "while
+all this talk of Economic Alliance sounds well and is serving its
+purpose, the fact must not be overlooked that, though war ends, business
+keeps right on. Self-interest will dictate the policy that pays the
+best." This is a typical comment.
+
+Now we get to the meat of the matter: By the terms of the pact half a
+dozen important nations--to say nothing of the smaller fry--are bound to
+a hard-and-fast trade agreement. Business, in brief, is projected in
+terms of nations.
+
+Go behind this new battle front and you will find that it conflicts with
+an uncompromising commercial rule. Why? Simply because, so far as
+business is concerned, nations may propose, but human beings dispose.
+Individuals, not countries, do business! Being human, these individuals
+are apt to follow the line of least resistance. Hence, the best-laid
+plans for imposing international industrial teamwork are likely to
+founder on those weaknesses of human nature that begin and end in the
+pocketbook.
+
+After the Franco-Prussian War of 1870-71, and while the Peace of
+Versailles was being negotiated, commercial travellers of each nation,
+laden with samples, filled the border villages, ready to dash across the
+frontier and open accounts. Of course no one dreams that such history
+will repeat itself after the present war; but there are many persons in
+England and France to-day who contend that the business needs of peace
+will be stronger than the costly hang-over of wartime passions.
+
+Trade, after all, is a Colossus that rests with one foot upon Necessity
+and the other foot upon Convenience.
+
+Will the Allies be such valued commercial helpmates to each other?
+Perhaps not. When this war is over the fighting countries will be
+impoverished by years of drain and waste. As a result, they will be
+poorer customers for each other, but very sharp competitors.
+International trade is merely an exchange of goods for goods. You cannot
+sell without buying, and vice versa. No groups of nations can live by
+taking in each other's washing. They are bound to get outside linen.
+When peace comes we shall have the lending and purchasing power of the
+world. Can anybody afford to shut us out?
+
+Again: Can the Allies present a united front or carry on a uniform line
+of conduct? Will not their interests overlap and cause an inevitable
+conflict, even when intentions are of the very best?
+
+France, for example, competes with England in chemicals, surgical
+instruments, high-speed tools, scores of things; Russia's competitors in
+wheat are not Germany, but Canada, India and Australia; Italy and France
+are rivals for the same wine markets. Russia for years has kept down the
+high cost of her living by buying cheap German goods at her front door
+and having her projects financed by German capital. Will she face
+bankruptcy by going hundreds--even thousands--of miles out of her way
+and paying more for products? England for years has made huge profits
+out of the re-export of Teutonic articles, thanks to the grace of free
+trade and huge carrying power. Is she likely to forego all this?
+
+In the last analysis Propinquity and the Purse are the Mothers of Trade
+Alliance.
+
+Finally, will not any organised exclusion of German products, coupled
+with a definite and organised campaign to throttle German trade the
+world over, throw the business of the Kaiser's country smack into the
+lap of the United States? Sober reflection over these possibilities may
+stay economic reprisal.
+
+On the other hand, there are many ways by which even a near translation
+of the economic pact into actuality may work hardship--even disaster--to
+American commercial interests. No matter which way we turn when peace
+comes we shall face the proverbial millstones in the shape of two great
+alliances. One is the Allied Group, jealous of our new wealth and world
+power, bitter with the belief that we have coined gold out of agony; the
+other is the Teutonic Union, smarting because of our aid to its
+enemies, stinging under reverses, mad with a desire to recuperate.
+
+Examine our trade relations with warring Europe and you see how
+hazardous a shift in old-time relations would be. To the fighting
+peoples and their colonies in normal times we send nearly seventy-eight
+per cent of our exports, and from them we derive seventy per cent of our
+exports. The Allies alone, principally England and her colonies, get
+sixty-three per cent of these exports and send us fifty-four per cent of
+all we get from foreign lands.
+
+As the National Foreign-Trade Council of the United States points out:
+"Any sweeping change of tariff, navigation or financial policy on the
+part of either group of the Allies, and particularly on the part of the
+Entente Allies, may seriously affect the domestic prosperity of the
+United States, in which foreign trade is a vital element."
+
+Why is this foreign trade so vital? Because, during these last two years
+of world upheaval we have rolled up the immense favourable trade balance
+of over three billion dollars. In peace time this would be paid for in
+merchandise. But fighting Europe's industries, with the exception of a
+part of England's, are mobilised for munitions. Therefore, these goods
+have been paid for largely in gold.
+
+This gold is now part of our basis of credit. When the war ends Europe
+will make every effort that ingenuity, backed up by trade resource, can
+devise to get that gold back. One way is through loans from us; the
+other is by exports to us. Now you see why we must maintain our foreign
+commerce.
+
+Our huge gold reserve hides another menace: The war demands for our
+commodities, paid for with the yellow metal, have increased the cost of
+production; and it will stay up. This will lead to an unequal
+competition with the cheap labour markets of Europe when the war is
+over. Both groups of Allies will be able to undersell us.
+
+Turn to the raw materials and you encounter a further danger in the
+economic pact. If the Allies develop their own sources, it will cut down
+our export of cotton, copper and oil. If they cannot develop sufficient
+sources for self-supply they may, through co-operative buying outside
+their dominions, satisfy their needs. In the third place, they may
+stimulate, through tariff or shipping concessions, or by
+subsidies--which are much talked of in Europe to-day--a preference for
+their own manufactures over American products in both allied and neutral
+markets.
+
+Take navigation: England controls an immense shipping. As a matter of
+fact, outside the three-mile limit, she practically owns the waters of
+the world. If she makes lower rates for her allies, or others to whom
+she gives preference, where shall we be in our chronic and unpardonable
+dependence upon foreign bottoms? Here is where we shall pay the price
+for neglecting our merchant marine.
+
+Still another menace to our trade lies in preferential alliances between
+Mother Countries and their colonies, which is part of the projected
+programme. Our next-door neighbour, Canada, has just given an
+illuminating instance of what may be in store for us. A Co-operative
+Export Association has been formed in the Dominion to get business
+throughout the British Empire and the other allied nations. In the
+circular announcing its organisation it declares that "the products of
+Canada will be preferred against the products of her great neutral
+competitor, the United States, who has stayed outside of the war and has
+borne no sacrifice of life and money made by the allied countries."
+
+Return to the economic pact again and you find that it continues to
+bristle with dangerous possibilities for us. You will recall that one of
+the clauses forbids the resumption of a favoured-nation arrangement with
+enemy countries for a period "to be fixed by mutual agreement." This may
+be for an indefinite time.
+
+Now the danger here lies in the European interpretation of the
+favoured-nation idea. To quote an authority: "Most of these countries
+have treaties under which each must grant most-favoured-nation treatment
+to the other; and this means that a reduction in duties granted to one
+country is automatically extended to all other countries with whom such
+treaties exist. The result is that the lowest rate in any treaty
+becomes, with exception, the rate extended to all countries."
+
+We have the favoured-nation relation with many European countries, and
+herein lies the possible danger: The war automatically annulled all
+treaties between belligerents. When the day of treaty making comes again
+shall we suffer for the sins of friend and foe in the rearrangement of
+international trade and lose some precious commercial privileges? It is
+worth thinking about.
+
+
+
+
+II--_England Awake_
+
+
+Meantime, regardless of how the economic pact works out, England's
+policy is "Deeds, not Words," as she prepares for the time when normal
+life and business succeed the strain and frenzy of fighting days.
+
+No man can range up and down the British Isles to-day without catching
+the thrill of a galvanic awakening, or feeling an imperial heartbeat
+that proclaims a people roused and alive to what the future holds and
+means. The kingdom is a mighty crucible out of which will emerge a new
+England determined to come back to her old industrial authority. It is
+with England that our commerce must reckon; it is English competition
+that will grapple with Yankee enterprise wherever the trade winds blow.
+
+There are many reasons why. "For England," as one man has put it,
+"victory must mean prosperity. However triumphant she may be in arms,
+her future lies in a preeminence in world industries. Through it she
+will rise as an empire or sink to a second-rate nation."
+
+In the second place, as all hope of indemnity fades, England realises
+that she will not only have to pay all her own bills but likewise some
+of the bills of her allies. Already her millions have been poured into
+the allied defence; many more must follow.
+
+Hence, the relentless energy of her throbbing mills; the searching
+appraisal of her resources; the marshalling of all her genius of trade
+conquest. Dominating all this is the kindling idea of a self-contained
+empire, linked with the slogan: "Home Patronage of Home Product." The
+war found her unprepared to fight; she is determined that peace shall
+see her fit for economic battle.
+
+This is what she is doing and every act has a meaning all its own for
+us. Take Industry: Forty-eight hundred government-controlled factories,
+working day and night, are sending out a ceaseless flood of war
+supplies. The old bars of restricted output are down; the old sex
+discrimination has faded away. Women are doing men's work, getting men's
+pay, making themselves useful and necessary cogs in the productive
+machine. They will neither quit nor lose their cunning when peace
+comes.
+
+I have watched the inspiring spectacle of some of these factories, have
+walked through their forest of American-made automatics, heard the hum
+of American tools as they pounded and drilled and ground the instruments
+of death. What does it signify? This: that quantity output of shot and
+shell for war means quantity output of motors and many other products
+for peace. You may say that quantity output is a matter of temperament
+and that the British nature cannot be adapted to it; but speeded-up
+munitions making has proved the contrary. The British workman has
+learned to his profit that it pays to step lively. High war wages have
+accustomed him to luxuries he never enjoyed before, and he will not give
+them up. Unrestricted output has come to stay.
+
+Five years ago the efficiency expert was regarded in England as an
+intruder and a quack; to use a stop watch on production was high crime
+and treason. To-day there are thousands of students of business science
+and factory management. In the spinning district girls in clogs sit
+alongside their foremen listening to lectures on how to save time and
+energy in work. Scores of old establishments are being reborn
+productively. There is the case of a famous chocolate works that before
+the war rebuffed an instructor in factory reorganisation. Last year it
+saw the light, hired an American expert, and to-day the output has been
+increased by twenty-five per cent.
+
+The infant industries, growing out of the needs of war and the desire of
+self-sufficiency, are resting on the foundations of the new creed.
+"Speed up!" is the industrial cry, and with it goes a whole new scheme
+of national industrial education. The British youth will be taught a
+trade almost with his A-B-C's.
+
+Formerly in England the standardisation of plan and product was almost
+unknown. For example, no matter how closely ships resembled each other
+in tonnage, structure or design, a separate drawing was made for each.
+Now on the Clyde the same specifications serve for twenty vessels.
+England has gone into the wholesale production; and what is true of
+ships in the stress of hungry war demand will be true of scores of
+articles for trade afterward. The old rule-of-thumb traditions that
+hampered expansion have gone into the discard, along with voluntary
+military service and the fetish of free trade.
+
+Typical of the new methods is the standardisation of exports, which have
+increased steadily during the past year. In a room of the Building of
+the Board of Trade, down in Whitehall, and where the whole trade
+strategy of the war is worked out, I saw a significant diagram, streaked
+with purple and red lines, which shows the way it is done. The purple
+indicated the rosters of the great industries; the red, the number of
+men recruited from them for military service. No matter how the battle
+lines yearn for men, the workers in the factories that send goods across
+the sea are kept at their task. This diagram is the barometer. For
+exports keep up the rate of exchange and husband gold.
+
+England is creating a whole new line of industrial defence. The
+manufacture of dyestuffs will illustrate: This process, which originated
+in England, was permitted to pass to the Germans, who practically got a
+world monopoly in it. Now England is determined that this and similar
+dependence must cease.
+
+For dyemaking she has established a systematic co-operation among state,
+education and trade. In the University of Leeds a department in colour
+chemistry and dyeing has been established, to make researches and to
+give special facilities to firms entering the industry, all in the
+national interest. A huge, subsidised mother concern, known as British
+Dyes, Limited, has been formed, and it will take the place of the great
+dye trust of Germany, in which the government was a partner.
+
+This procedure is being repeated in the launching of an optical-glass
+industry; this trade has also been in Teutonic hands. I could cite many
+other instances, but these will show the new spirit of British
+commercial enterprise and protection.
+
+Everywhere nationalisation is the keynote of trade activity. Coal
+furnishes an instance: The collieries of the kingdom not only stoke the
+fires of myriad furnaces but drive the ships of a mighty marine. Through
+her control of coal England has one whip hand over her allies, for many
+of the French mines are in the occupied districts, and Italy's supply
+from Germany has stopped. Coal means life in war or peace. Now England
+proposes a state control of coal similar to that of railroads.
+
+It spells fresh power over the neutral shipping that coals at British
+ports. If the government controls the coal it will be in a position to
+stipulate the use that the consumer shall make of it, and require him to
+call for his return cargo at specified ports. Such supervision in war
+may mean similar domination in peace--another bulwark for British
+control of the sea.
+
+Throughout England all trade facilities are being broadened and
+bettered. The local Chambers of Commerce, whose chief function for years
+was solemnly to pass resolutions, have stirred out of their slumbers.
+The Birmingham body has formed a House of Commerce to stimulate and
+develop the commerce of the capital of the Midlands.
+
+This stimulation at home is accompanied by a programme of trade
+extension abroad. The Board of Trade has granted a licence to the
+Latin-American Chamber of Commerce in Great Britain, formed to promote
+British trade in Central and South America and Mexico. Sections of the
+chamber are being organised for each of the important trades and
+industries in the kingdom, and committees named to enter into
+negotiations with every one of the Latin-American republics, where
+offices will be established in all important towns.
+
+The Board of Trade has also learned the lesson of co-operation for
+foreign trade. As one result, British syndicates, composed of small
+manufacturers, who share the overhead cost, are forming to open up new
+markets the world over. These syndicates correspond with the familiar
+German Cartel, which did so much to plant German products wherever the
+sun shone.
+
+England, too, has wiped out one other block to her trade expansion: For
+years many of her consuls were naturalised Germans. Many of them were
+trustworthy public servants. Others, true to the promptings of birth,
+diverted trade to their Fatherland. To-day the Consular Service is
+purged of Teutonic blood. It is one more evidence of the gospel of
+"England for the English!"
+
+All this new trade expansion cannot be achieved without the real sinew
+of war, which is capital. Here, too, England is awake to the emergency.
+Typical of her plan of campaign is the projected British Trade Bank,
+which will provide facilities for oversea commercial development, and
+which will not conflict with the work ordinarily done by the
+joint-stock, colonial and British foreign banks. It will do for British
+foreign trade what the huge German combinations of capital did so long
+and so effectively for Teuton commerce. Furthermore, it will make a
+close corporation of finance and trade, with the government sitting in
+the board of directors and lending all the aid that imperial support can
+bestow.
+
+The bank will be capitalised at fifty million dollars. It will not
+accept deposits subject to call at short notice, which means constant
+mobilisation of resources; it will open accounts only with those who
+propose to make use of its oversea machinery; it will specialise in
+credits for clients abroad, and it will become the centre of syndicate
+operations. One of its chief purposes, I might add, will be to enable
+the British manufacturer and exporter to assume profitably the long
+credits so much desired in foreign trade.
+
+From the confidential report of its organisation let me quote one
+illuminating paragraph which is full of suggestion for American banking,
+for it shows the new idea of British preparedness for world business.
+Here it is:
+
+"Nearly as important as the Board would be the General Staff. It is fair
+to assume that women will in the future take a considerable share in
+purely clerical work, and this fact will enable the institution to take
+fuller advantage of the qualifications of its male staff to push its
+affairs in every quarter of the globe. Youths should not be engaged
+without a language qualification, and after a few years' training they
+should be sent abroad. It could probably be arranged that associated
+banks abroad would agree to employ at each of their principal branches
+one of the Institution's clerks, not necessarily to remain there for an
+indefinite period, but to get a knowledge of the trade and
+characteristics of the country. Such clerks might in many cases sever
+their connection with the banks to which they were appointed and start
+in business on their own account. They would, however, probably look
+upon the institution as their 'Alma Mater,' Every endeavour should be
+made to promote _esprit de corps_; and where exceptional ability is
+developed it should be ungrudgingly rewarded. If industry is to be
+extended it is essential that British products should be _pushed_; and
+manufacturers, merchants and bankers must combine to push them. It is
+believed that this pushing could be assisted by the creation of a body
+of young business men in the way above described."
+
+The scope and purpose of this British Trade Bank suggest another East
+India Company with all the possibilities of gold and glory which
+attended that romantic eighteenth-century enterprise. Perhaps another
+Clive or a second Hastings is somewhere in the making.
+
+That the British Government proposes to follow the German lead and
+definitely go into business--thus reversing its tradition of aloofness
+from financial enterprise--is shown in the new British and Italian
+Corporation, formed to establish close economic relations between
+Britain and Italy. It starts a whole era in British banking, for it
+means the subsidising of a private undertaking out of national funds.
+
+It embodies a meaning that goes deeper and travels much farther than
+this. Up to the outbreak of the great war Germany was the banker of
+Italy. Cities like Milan and Rome were almost completely in the grip of
+the Teutonic lender, and his country cashed in strong on this surest and
+hardest of all dominations. This was the one big reason why the Italian
+declaration of war against Germany was so long delayed. With this new
+banking corporation England not only supplants the German influence but
+forges the economic irons that will bind Italy to her.
+
+The capital of the British and Italian Corporation is nominally only
+five million dollars. The government, however, agrees to contribute
+during each of the first ten years of its existence the sum of two
+hundred and fifty thousand dollars. Though imperial stimulation of trade
+is one of its main objects, this institution is not without its larger
+political value. As this and many other similar enterprises show,
+politics and world trade, so far as Great Britain is concerned, will
+hereafter be closely interwoven.
+
+Throughout all this British organisation runs the increasing purpose of
+an Empire Self-Contained. Whether that phase of the Paris Pact which
+calls for development and mobilisation of natural resources sees the
+light of reality or not, Britain is determined to take no chances for
+her own. She is scouring and searching the world for new fields and new
+supplies. She is planning to increase her tea and coffee growing in
+Ceylon and make cotton plantations of huge tracts in India and Africa.
+The control of the metal fields of Australia has reverted to her hands;
+she will get tungsten and oil from Burma. It took the war to make her
+realise that, with the exception of the United States, Cuba and Hawaii,
+all the sugar-cane areas of the world are within the imperial confines.
+They will now become part of the Empire of Self-Supply. Even a partial
+carrying out of this far-flung plan is bound seriously to affect our
+whole export business.
+
+You have seen how this self-contained idea may work abroad. Go back to
+England and you find it forecasting an agricultural revolution that may
+be one of the after-war miracles.
+
+For many years England has raised about twenty per cent of her wheat
+supplies. One reason was her dependence on grass instead of arable land;
+another was the inherent objection of the British farmer to adopt
+scientific methods of soil cultivation or engage in co-operative
+marketing. The old way was the best way; he wanted to go "on his own."
+
+The war has opened his eyes, and likewise the eyes and purse of the
+ultimate consumer. Denmark did some of this awakening. England depended
+upon her for enormous supplies of bacon, cheese, butter and eggs. When
+the war broke out and the ring of steel hemmed Germany in, the
+speculative prices offered by the Fatherland were too much for the
+little domain. Holland also "let down" her old customer, poured her food
+into Germany, and fattened on immense profits. Norway and Sweden, which
+were also important sources of more or less perishable British food
+supplies, have done the same thing. When peace comes you may be sure
+that England will have a reckoning.
+
+This scarcity of food, coupled with the incessant sinking of supply
+ships by enemy submarines, the rigid censorship of imports, and all
+those other factors that bring about the high cost of war, has made the
+Englishman sit up and take notice of his agricultural plight.
+
+"We must grow more of our food," is the new determination. To achieve it
+plans for collective marketing, for intensive farming, for co-operative
+land-credit banks, are being made. The gentleman farmer will become a
+working farmer.
+
+England's gospel of self-sufficiency has a significance for us that
+extends far beyond her growing independence in foodstuffs and raw
+materials. It is fashioning a weapon aimed straight at the heart of our
+overseas industrial development.
+
+Most people who read the newspapers know that many articles of American
+make, ranging from bathtubs to motor cars, have been excluded from
+England. The reasons for this--which are all logical--are the necessity
+for cutting down imports to protect the trade balance and keep the gold
+at home; the need of ship tonnage for food and war supplies; and the
+campaign to curtail luxury.
+
+Admirable as are these reasons, there is a growing feeling among
+Americans doing business in England that this wartime prohibition, which
+is part of the programme of military necessity, is the prelude to a more
+permanent, if less drastic, exclusion when peace comes.
+
+Habit is strong with Englishmen, and the shrewd insular manufacturer has
+been quick to see the opportunities for advancement that lie in this
+closed-door campaign.
+
+"Get the consumer out of the habit of using a certain American product
+during the war," he argues, "and when the war is over--even before--he
+will be a good 'prospect' for the English substitute."
+
+Here is a concrete story that will illustrate how the exclusion works
+and what lies behind:
+
+Last summer a certain well-known American machine, whose gross annual
+business in Great Britain alone amounts to more than half a million
+dollars a year, was suddenly denied entrance into the kingdom. When the
+managing director protested that it was a necessity in hundreds of
+British ships he was told that it made no difference.
+
+"But what are the reasons for exclusion?" he asked.
+
+"We don't want English money to go out of England," was the reply.
+
+"Then we shall not only bank all our receipts here but will bring over
+one hundred thousand pounds more," came from the director.
+
+It had no effect.
+
+"Is it tonnage?" was the next query.
+
+"Yes," said the official.
+
+"Then we shall ship machines in our president's yacht," was the ready
+response.
+
+This staggered the official. After a long discussion the director
+received permission to bring in what machines were on the way; and,
+also, he got a date for a second hearing.
+
+Meantime he adapted a type of machine to the needs of a certain
+department in the Board of Trade, sold two, and got them installed and
+working before he next appeared before the Trade Censors, who, by the
+way, knew absolutely nothing at all about the article they were
+prohibiting. The first question popped to him was:
+
+"Are machines like yours made in England?"
+
+"Yes," replied the director; "but they have never been practical or
+commercial."
+
+Then he produced the record of the machines he had sold to the
+government. Each one saved the labour of eight persons and considerable
+office space. This made a distinct impression and the company got
+permission to import two hundred tons of their product. But not even an
+application for more can be filed until the first of next year. Only the
+dire necessity for this article, coupled with the fact that it is
+without British competition, got it over.
+
+I cite this incident to show what many Americans in England believe to
+be one of the real reasons behind the prohibition, which, summed up, is
+simply this: England is trying to keep out everything that competes with
+anything that is made in England or that can be made in England!
+
+For some time after the war began our motor cars went in free. Then
+followed an ad-valorem duty of thirty-three and a third per cent.
+Despite this handicap, agents were able to sell American machines, which
+were both popular and serviceable. The tariff was imposed ostensibly to
+cut down imports, but mainly to please the British motor manufacturers,
+who claimed that the surrender of their factories to the government for
+making munitions left the automobile market at the mercy of the American
+product, which meant loss of goodwill.
+
+Subsequently a complete embargo was placed on the entry of American
+pleasure cars and the business practically came to a standstill. What is
+the result? Let the agent of a well-known popular-priced American car
+tell his story.
+
+"Before the war and up to the time of the embargo," he said, "I was
+selling a good many American automobiles. With the embargo on cars also
+came a prohibition of spare parts. It was absolutely impossible to get
+any into the country. Many of my customers wanted replacements, and,
+when I could not furnish them, they abandoned the cars I sold them and
+bought English-made machines whose parts could be replaced."
+
+All through the motor business in England I found a strong disposition
+on the part of the British manufacturer and dealer to create a market
+for his own car as soon as the war is over. Some even talked of a large
+output of low-priced machines to meet the competition of the familiar
+car that put the automobile joke on the map. The only American comeback
+to this growing prejudice is to build factories or assembling plants
+within the British Isles. This will save excessive freight rates, keep
+down the costly-tariff "overhead," and get the benefit of all the
+goodwill accruing from the employment of British labour.
+
+A by-product of British exclusion is the inauguration of a
+Made-in-England campaign. Buy a hat in Regent Street or Oxford Street
+and you see stamped on the inside band the words, "British Manufacture."
+This English crusade is more likely to succeed than our Made-in-U.S.A.
+attempt, for the simple reason that the government is squarely behind
+it.
+
+This same spirit dominates newspaper publicity. You find a British
+fountain pen glowingly proclaimed in a big display advertisement,
+illustrated with the picture of men trundling boxes of gold down to a
+waiting steamer. Alongside are these words:
+
+"The man who buys a foreign-made fountain pen is paying away gold, even
+if the money he hands across the counter is a Treasury note. The British
+shop may get the paper; the foreign manufacturer gets gold for all the
+pens he sends over here. What is the sense of carrying an empty
+sovereign-purse in one pocket if you put a foreign-made fountain pen in
+another?"
+
+Behind all this British exclusion is an old prejudice against our wares.
+There has never been any secret about it. I found a large body of
+opinion headed by brilliant men who have bidden farewell to the
+Hands-Across-the-Sea sentiment; who have little faith in the theory that
+blood is thicker than water when it comes to a keen commercial clash.
+
+What of the human element behind the whole British awakening? Will
+organised labour, an ancient sore on the British body, rise up and
+complicate these well-laid schemes for economic expansion? As with the
+question of practicability of the Paris Pact, there is a wide difference
+of opinion.
+
+On one hand, you find the air full of the menace of post-war
+unemployment and the problem of replacing the woman worker by the man
+who went away to fight. To offset this, however, there will be the
+undoubted scarcity of male help due to battle or disease, and the
+inevitable emigration of the soldier, desirous of a free and open life,
+to the Colonies.
+
+On the other hand, there is the conviction that unrestricted output,
+having registered its golden returns, will be the rule, not the
+exception, among the English artisans. England's frenzied desire for
+economic authority proclaims a job for everybody.
+
+I asked a member of the British Cabinet, a man perhaps better qualified
+than any other in England to speak on this subject, to sum up the whole
+after-war labour situation, as he saw it, and his epigrammatic reply
+was:
+
+"After the war capital will be ungrudging in its remuneration to labour;
+and labour, in turn, must be ungrudging in its output."
+
+No one doubts that after the war the British worker will have his full
+share of profits. As one large manufacturer told me: "We have so gotten
+into the habit of turning our profits over to the government that it
+will be easy to divide with our employees." Here may be the panacea for
+the whole English labour ill.
+
+But, whatever may be the readjustment of this labour problem, one thing
+is certain: Peace will find a disciplined England. The five million men,
+trained to military service, will dominate the new English life; and
+this means that it will be orderly and productive.
+
+With this discipline will come a democracy--social and industrial--such
+as England has never known. The comradeship between peer and valet,
+master and man, born of common danger under fire, will find renewal, in
+part at least, when they go back to their respective tasks. This wiping
+out of caste in shop, mill and counting room will likewise remove one of
+the old barriers to the larger prosperity.
+
+England wants the closest trade relations with her Dominions. But will
+the Colonies accept the idea of a fiscal union of empire, which
+practically means intercolonial free trade? Or will they want to
+protect their own industries, even against the Mother Country? Like the
+French, they are willing to risk life and limb for a cause, but they
+likewise want to guard jealously their purse and products. They have not
+forgotten the click when Churchill locked the home door against them.
+
+This leads to the question that is agitating all England: Will peace
+bring tariff reform? Both English and American economic destiny will be
+affected by the decision, whatever it may be.
+
+Canvass England and you encounter a widespread movement that means, as
+the advocates see it, a broadening of the home market; security for the
+infant "key" industries; a safeguard for British labour--in short, the
+end of the old inequality of a Free England against a Protected Germany.
+
+Protection in England, hitched to a world-wide freeze-out business
+campaign against Germany, would doubtless divert a whole new
+international discount business to New York. German exporters under
+these circumstances might refuse payments from their other customers on
+London, demanding bills on New York instead. To hold this business,
+however, we should need direct banking and cable connections with all
+the grand divisions of trade, adequate sea-carrying power, dollar
+credits, and a government friendly to business.
+
+Then, there is the middle English ground which demands a "tariff for
+revenue only," and subsidy--not protection--for the new industries.
+
+Combating all this is the dyed-in-the-bone free trader, who points to
+the fact that free trade made England the richest of the Allies and gave
+her control of the sea. "How can a nation that is one huge seaport, and
+which lives by foreign trade, ever be a protectionist?" he asks.
+
+If he has his way we shall have to struggle harder for our share of
+universal business. More than this, it will block what is likely to be
+one of Germany's schemes for rehabilitation. Here is the possible
+procedure:
+
+Germany's financial position after the war will be badly strained. She
+can be saved only by an effective export policy. To do this she must
+seek all possible neutral markets; and to get them quickly she will
+offer broad--even extravagant--reciprocity programmes. They may conflict
+with the proposed Franco-British programmes of protection and embargo
+against neutral trade interests.
+
+But if the Franco-British programme leaves the allied markets for goods
+and money open, as before the war, the German reciprocity scheme will
+fail of its effect by the sheer force of natural competition. Hence
+England can throttle the re-establishment of German credit by a free and
+liberal trade policy, open to all the world. Though poor, after the war
+she can actually be stronger, in view of her great army and navy, her
+new individual efficiency, and renewed commercial vitality.
+
+Will all this keep Germany out? There are many people, even in England,
+who think not. Already Germans by the thousands are becoming naturalised
+citizens of Holland, Spain, Switzerland and Denmark; building factories
+there and shipping the product into the enemy strongholds, stamped with
+neutral names. Much of the "Swiss" chocolate you buy in Paris was made
+by Teutonic hands.
+
+A French manufacturer who bought a grinding machine in Zurich the other
+day thought it looked familiar; and when he compared it with a picture
+in a German catalogue he found it was the identical article, made in
+Germany, which had been offered to him by a Frankfort firm six months
+before the war began. Only certificates of origin will bar out the
+German product.
+
+Amid the hatred that the war has engendered, England wonders at the
+price she will pay for German exclusion. Men like Sir John Simon
+solemnly assert in Parliament: "In proportion as we divert German trade
+after the war we throw the trade of the Central European Powers more and
+more into the hands of America, with the result that, unhappily, if we
+became involved in another European war we should not be able to count
+on the friendly neutrality which America has shown in this war." Others
+inquire: "What of the future trade of India, the great part of whose
+cotton crop before the war went to Central Europe?"
+
+Sober-minded and farseeing men, in England and elsewhere, believe that,
+despite the ravage of her men and trade, Germany will come back
+commercially.
+
+"You must not forget," said one of them, "that, no matter how badly she
+is beaten, Germany will still be a going business concern. She will have
+an immense plant; her genius of efficiency and organisation cannot be
+killed. Through her magnificent industrial education system she has
+trained millions of boys to take the vacant stools and stands in shop
+and mill. England and France have no such reserves. Besides, if we
+pauperise Germany, no one--not even Belgium--will get a pound of
+indemnity."
+
+You have now seen the moving picture of half a world in process of
+significant change, wrought by clash of arms, and facing a complete
+economic readjustment with peace. Whether the Paris Pact is practical or
+visionary, no matter if England is free trade or protectionist,
+regardless of Germany's ability to find herself industrially at once,
+one thing we do know--the end of the war will find the Empire of World
+Trade molten and in the remaking.
+
+Fresh paths must be shaped; the race will be to the best-prepared.
+Whatever our position, be it neutral or belligerent--and no man can
+tell which now--we shall face a supreme test of our resource and our
+readiness. What can we do to meet this crisis, which will mean continued
+prosperity or costly reaction?
+
+Many things; but they must be done now, when immunity from actual
+conflict gives us a merciful leeway. More than ever before, we shall
+face united business fronts. Therefore, co-operation among competitors
+is necessary to a successful foreign trade.
+
+Since the coming trade war will rage round tariffs, it will be well to
+heed the resolution recently adopted by the National Foreign-Trade
+Council: "That the American tariff system, whatever be its underlying
+principle, shall possess adequate resources for the encouragement of the
+foreign trade of the United States by commercial treaties or agreements,
+or executive concessions within defined limits, and for its protection
+from undue discrimination in the markets of the world." In short, we
+must have a flexible and bargaining tariff.
+
+We must train our men for foreign-trade fields; they must know alien
+languages as well as needs; we must perfect processes of packing that
+will deliver goods intact. With these goods, we must sell goodwill
+through service and contact. Secondhand-business getting will have no
+place in the new rivalry.
+
+Our money, too, must go adventuring, and courage must combine with
+capital. Our dawning international banking system, which first saw the
+light in South America, needs world-wide expansion. Dollar credit will
+be a world necessity if we capitalise the opportunity that peace may
+bring us. No financial aid should be so welcome as ours, because it is
+nonpolitical.
+
+This trade machinery will be inadequate if we have no merchant marine.
+Chronic failure to heed the warning for a national shipping will make
+our dependence upon foreign holds both acute and costly.
+
+Our trade needs more than a government professedly friendly to business.
+It requires a definite co-operation with business. An advisory board of
+practical men of commercial affairs would be of more constructive
+benefit to the country than all the lawmakers combined.
+
+Here, then, is the protection against organised European economic
+aggression, the armour for the inevitable trade conflict. Unless we gird
+it on, we shall be onlookers instead of participants.
+
+
+
+
+III--_American Business in France_
+
+
+Two Americans met by chance one day last summer at a little table in
+front of the Café de la Paix in Paris. One had arrived only a month
+before; the other was an old resident in France. After the fashion of
+their kind they became acquainted and began to talk. Before them passed
+a picturesque parade, brilliant with the uniforms of half a dozen
+nations, and streaked with the symbols of mourning that attested to the
+ravage of war.
+
+"There is something wrong with these Frenchmen," said the first
+American.
+
+"How is that?" asked his companion.
+
+"It's like this," was the reply. "I have sold goods from the Atlantic to
+the Pacific, and yet I can get nowhere over here. I give these fellows
+the swiftest line of selling talk in the world and it makes no
+impression."
+
+"How well do you speak French?" queried his new-found acquaintance.
+
+"Not at all."
+
+"Have you studied the ways and needs of the Frenchman?"
+
+"Of course not. I've got something they want and they ought to take it."
+
+The man who had long lived in France was silent for a moment. Then he
+said:
+
+"The fault is not with the Frenchman, my friend. Think it over." He did,
+and with reflection he changed his method. He put a curb on strenuosity;
+started to study the French temperament; he began to see why he had not
+succeeded.
+
+This incident illumines one of the strangest and most inconsistent
+situations in our foreign trade. By a curious irony we have failed to
+realise our commercial destiny in the one Allied Nation where real
+respect and affection for us remain. France--a sister Republic--is bound
+to us by sentimental ties and the kinship of a common struggle for
+liberty. Her people are warm-hearted and generous and _want_ to do
+business with us.
+
+Yet, as long and costly experience shows, we have almost gone out of our
+way to clash with their customs and misunderstand their motives. In
+short, we have neglected a great opportunity to develop a permanent and
+worth-while export business with them. It was bad enough before the war.
+Events since the outbreak of the monster conflict have emphasised it
+more keenly.
+
+       *       *       *       *       *
+
+Why have Americans failed so signally in France? There are many reasons.
+First of all, their whole system of selling has been wrong.
+
+For years many of our manufacturers were represented in Paris and
+elsewhere in France by German agents, who also represented producers in
+their own country. The energetic Teuton did not hesitate to install an
+American machine or a line of American goods. But what happened? When
+the machine part wore out or the stock of goods was exhausted, there was
+seldom any American product on hand to meet the swift and sometime
+impatient demand for replacement or renewal. By a strange "coincidence"
+there was always an abundant supply of German material available. The
+German salesman always saw to that. Necessity knows no nationality. The
+result invariably was that German output supplanted the American. The
+Frenchman did not want to be caught the second time.
+
+This prompt renewal created an immense goodwill for German goods. Right
+here is one of the first big lessons for the American exporter to learn,
+no matter what country he expects to sell in. It lies in keeping goods
+"on the shelf," and being able to meet emergency demand.
+
+The Frenchman in trade is a sort of Missourian. He must be "shown." He
+shies at samples; distrusts drawings. He likes to go into a warehouse
+and look over stocks; it gives him satisfaction to pick and choose. He
+is the most fastidious buyer in the world and he likes to do things his
+own way. Any attempt to ram foreign methods--either in buying or
+selling--down his sensitive throat is bound to react.
+
+Here is a case in point: The General Representative in France of a large
+American manufacturing concern decided to engage some French salesmen.
+He was a shark on business system; he fairly oozed with "scientific
+salesmanship"; he decided to gird his Gallic emissaries with the most
+improved American selling methods. So he prepared an elaborate "What I
+did" schedule for them. Into it was to be written every evening the
+complete record of the business day.
+
+When he handed one of these blanks to his leading French salesman, that
+gentleman shrugged his shoulders and said:
+
+"It eez imposseeble."
+
+When the American became insistent all the French salesmen resigned in a
+body. This objection was purely temperamental. If there is one thing
+above all others that puts a Frenchman into panic it is publicity of his
+personal affairs. He believes that the greatest crime in the world is to
+be found out, whether in business or in love. There was nothing perhaps
+to hide in a biography of his daily work, but it was the wrong tack to
+take.
+
+In the same way militant and masterful salesmanship also fails. A man
+may be a crack seller in Kansas City, Denver, and all points West, but
+he finds to his sorrow that his dynamic process goes straight over the
+head of a Frenchman. He refuses to be driven; he wants time for mature
+reflection and an opportunity to talk the thing over with his wife.
+
+This irritating attempt to force uncongenial methods on French buyers is
+duplicated in a corresponding lack of plain everyday intelligence in
+meeting the simplest French requirements.
+
+Indeed, the omissions of Americans are wellnigh incredible. Take the
+matter of postage to France. The head of a great French concern made
+this statement to me in sober earnestness: "Won't you be good enough to
+beg American manufacturers to put their office boys through a course of
+instruction in postal rates between Europe and the United States?"
+
+When I asked him the reason he said: "We sometimes get twenty letters
+from America in one mail and each comes under a two cent stamp. This has
+been going on for years despite our repeated protest about it. Some
+months my firm was required to pay from ten to fifteen dollars in excess
+postage."
+
+Now the amount of money involved in this transaction is the slightest
+feature: it is the chronic laxity and carelessness of the American
+business man that gets on the Frenchman's nerve.
+
+Here is another case in point: A well known French firm has been writing
+weekly letters for the past eighteen months to a New England factory
+trying to persuade the Manager to mark his export cases with a stencil
+plate and in ink rather than with a heavy lead pencil, as the latter
+marking is almost obliterated by the time the shipment arrives at Havre.
+In fact, this French firm went to the extent of sending a stencil and
+brush to New England to be used in marking the firm's cases. But the old
+pencil habit is too strong and a weekly hunt has to be instituted on the
+French docks for odd cases containing valuable consignments of machine
+tools. Vexatious delays result. It is just one more nail that the
+heedless American manufacturer drives into the coffin of his French
+business.
+
+These incidents and many more that I could cite, are merely the
+approach, however, to a succession of mistakes that make you wonder if
+so-called Yankee enterprise gets stage fright or "cold feet" as soon as
+it comes in contact with French commercial possibilities. Let me now
+tell the prize story of neglected trade opportunity.
+
+Last spring the American Commercial Attache in Paris made a speech at a
+dinner in Philadelphia. He painted such a glowing picture of trade
+prospects in France that the head of one of the greatest hardware
+concerns in America, who happened to be present, came to him afterwards
+with enthusiasm and said: "We want to get some of that foreign business
+you talked about and we will do everything in our power to land it. Help
+us if you can."
+
+The Attache promised that he would and returned to his post in Paris. He
+studied the hardware situation and found a tremendous need for our
+goods. He was about to make a report to the hardware manufacturer when
+an alert upstanding young American breezed into his office and said:
+
+"I have been looking into the hardware situation here and I find that
+there is a big chance for us. In fact, I have already booked some fat
+orders. Will you put me in touch with the right people in America to
+handle the business?"
+
+"Certainly," replied the Attache. "I know just the firm you are looking
+for." He recalled the enthusiastic remarks of the man who came to him
+after the Philadelphia speech, so he said: "Write to the Blank Hardware
+Company in ----, and I am sure you will get quick action."
+
+"No," said the enterprising young American, "I will cable." He
+immediately got off a long wire telling what orders he had and giving
+gilt edge banking references.
+
+Quite naturally he expected a cable reply, but he was too optimistic.
+Day after day passed amid a great silence from America. At the end of
+two weeks he received a _letter_ from the Export Manager of the firm who
+said, among other things: "We are not prepared to quote any prices for
+the French trade now. We have decided to wait with any extension of our
+foreign business until after the war. Meanwhile you might call on our
+agent in Paris who may be able to do something for you."
+
+The young American dashed up to the agent's warehouse. The agent was an
+old man becalmed in a sea of empty space. All his young men were off at
+the front; a few grey beards aided by some women comprised his working
+staff.
+
+"I have no American hardware in stock," he said, "but I may be able to
+get you some English or Swiss goods." This did not appeal to the young
+American. He is now making a study of Russian finance.
+
+Full brother to this episode is the experience of another American in
+Paris who found out that there was great need among French women for
+curling irons. Despite war, sacrifice and sudden death, the French woman
+is determined to look her best. Besides, she is earning more money than
+ever before and buying more luxuries. Knowing these facts, the Yankee
+sent the following cable to a well known concern in the Middle West:
+
+"Rush fifty thousand dollars' worth of curling irons. Cable acceptance."
+He also cabled his financial references which would have started a bank.
+
+He, too, was doomed to disappointment. After a fortnight came the usual
+letter from America containing the now familiar phrase: "See Blank
+Blank, our Paris representative. He may be able to take care of you."
+
+Manfully he went to see Monsieur Blank Blank, who not only had no
+curling irons but refused to display the slightest interest in them.
+
+Still another American took an order for some kid skins, intended for
+the manufacture of fine shoe uppers. By the terms of the agreement they
+were to be three feet in width. The money for them amounting to $30,000
+was deposited in a New York bank before shipment.
+
+When the skins reached Paris they were found to be heavy, coarse leather
+and measuring five feet in width. They were absolutely useless for the
+desired purpose. The average French buyer, however, is not a welcher. He
+accepted the undesirable stuff, but with a comment in French that,
+translated into the frankest American, means, "Never again!"
+
+All this oversight is aided and abetted by a twin evil, a lack of
+knowledge of the French language. Here you touch one of the chief
+obstacles in the way of our foreign business expansion everywhere. It
+has put the American salesman at the mercy of the interpreter, and since
+most interpreters are crooks, you can readily see the handicap under
+which the helpless commercial scout labours. A concrete episode will
+show what it costs:
+
+A certain American firm, desirous of establishing a more or less
+permanent connection in France, sent over one of its principal officers.
+This man could not speak a word of French, so he secured the services of
+a so-called "interpreter guide." It was proposed to select a
+representative for the company from among a number of firms in a certain
+large French seaport. The firm chosen was to receive and pay for
+consignments through a local bank and act generally for the American
+company.
+
+Friend "interpreter guide" said he knew all the big business houses in
+the city, so he selected a firm which the American accepted without
+making the slightest investigation. A bank agreed to take care of the
+shipments and the whole transaction was quickly concluded. The American
+grabbed the papers in the case (and I might add without the formality of
+having them examined by a third party) and left France immensely
+impressed with the ease and swiftness with which business could be
+transacted with that country.
+
+But there was an unexpected and unfortunate sequel to this performance.
+A few months later another officer of this American company came
+post-haste to France to straighten out an ugly tangle. It developed that
+the French firm chosen by the "interpreter guide" was not of the highest
+standing: that the interpreter, for reasons and profits best known to
+himself, had entirely misrepresented the conversation, that instead of
+paying four per cent for services, the American firm was really paying
+about ten. The whole transaction had to be called off and a new one
+instituted at considerable expense of time and money.
+
+Another American came to Paris without knowing the language, used an
+interpreter every day for nine weeks, and was unable to place a single
+order. Yet in this time he spent enough money on his language
+intermediary to pay the rent of a suitable office in Paris for a whole
+year.
+
+The dependence of Americans with important interests or commissions upon
+interpreters is well nigh incredible. On the steamer that took me to
+France last summer was the new Continental Manager of a large American
+manufacturing company. I assumed, of course, that he could speak French.
+A few days after I arrived in Paris I met him in the Boulevard des
+Italiens in the grip of a five franc a day interpreter. He told me with
+great enthusiasm that an interpreter was "the greatest institution in
+the world." In six months he will probably reverse his opinion.
+
+The lesson of this lack of knowledge of French as applied to
+salesmanship is this: That while the average Frenchman is greatly
+flattered when you tell him that his English is good, he prefers to talk
+business in his own vernacular. He thinks and calculates better in
+French. Frequently when you engage him in conversation in English and
+the question of business comes up, you find that he instinctively lapses
+into his mother tongue.
+
+I was talking one day with Monsieur Ribot, the French Minister of
+Finance, whose English is almost above reproach, and who maintained the
+integrity of his English through a long conversation. But the moment I
+asked him a question about the proposed bond issue, he shifted into
+French and kept that key until every financial rock had been passed.
+
+In short, you find that if you want to do business in France, you must
+know the French language. It is one of the keys to an understanding of
+the French temperament.
+
+Even when Americans do become energetic in France, they sometimes fail
+to fortify themselves with important facts before entering into hard and
+fast transactions. As usual, they pay dearly for such omissions. This
+brings us to what might be called The Great American Deluge which
+overwhelmed not a few Yankee pocketbooks and left their owners sadder
+and saner.
+
+Fully to understand this series of events, you must know that since the
+beginning of the war the question of an adequate French coal supply has
+been acute. Indeed, for a while the country faced a real crisis. Many of
+her mines are in the hands of the Germans and she was forced to turn to
+England for help. Not only has the English price risen, but to it must
+be added the high cost of transportation, the heavy war risk, and all
+those other details that enter into such negotiations.
+
+France had to have coal and various enterprising Americans got on the
+job. At least, they thought they were enterprising. Before they got
+through, they wished that they had not been so headlong as the following
+tale, now to be unfolded, will indicate.
+
+A group of New York men made a contract to deliver three shiploads of
+coal at Bordeaux at a certain price. _After_ they had signed the
+contract, freight rates from Baltimore to the French port almost
+doubled. This was the first of their troubles. When their vessel finally
+reached Bordeaux, the dock was so crowded with ships unloading war
+munitions that they could not get pier space. In France demurrage begins
+the moment a ship stops outside of port. The net result was that these
+vessels were held up for nearly two weeks and the high price of
+transportation coupled with the very large demurrage practically wiped
+out all the profits.
+
+Another group of Americans made a contract to deliver coal to a French
+railway "subject to call." Without taking the trouble to inquire just
+what "subject to call" meant in France, they signed and sealed the
+bargain. Then they discovered that the railroad wanted the coal
+delivered in irregular instalments. Meanwhile the consignors had to
+store the coal in French yards where space to-day is almost as valuable
+as a corner lot on Broadway. They were glad to pay a cash bonus and
+escape with their skin.
+
+Still another group made a contract with the Paris Gas Company for a
+large quantity of coal. They discovered later that the company expected
+the coal to be delivered to their bins in Paris.
+
+"But the American plan is to sell coal f.o.b. Norfolk," said the
+spokesman.
+
+"We are sorry," replied the Frenchmen, "but the coal must be delivered
+to us in Paris. The English have been doing it for forty years, and if
+you expect to do business with us you must do likewise."
+
+When the Americans demurred the company held them to their contract.
+
+This last episode shows one of the great defects in the American system
+of doing business abroad. We insist upon the f.o.b. arrangement, that
+is, the price at the American point of shipment. The foreigner, and
+especially the Frenchman, wants a c.i.f. price which includes cost,
+insurance and freight and which puts the article down at his door. The
+German and English shippers, and particularly the former, have made this
+kind of shipment part of their export creed, and it is one reason why
+they have succeeded so wonderfully in the foreign field.
+
+The Great American Coal Deluge also precipitated a flood of miserable
+titled ladies all selling coal for "well known American companies." Most
+of them were clever American women, married, or thinking they were
+married, to Italian or French noblemen. Their chief effort was to get a
+cash advance payment to bind the contract. Such details as price,
+transportation, credit, and other essentials were unimportant.
+
+Here is a little story which shows how these women did business and
+undid American good will.
+
+One day last August, the telephone rang in the office of the General
+Manager of a long established American concern in Paris. A woman was at
+the other end.
+
+"Is this Mr. Blank?"
+
+"Yes."
+
+"I am Countess A. and I have a letter of introduction for you."
+
+"Yes."
+
+"I represent several large American coal companies and have secured a
+large order for Italy."
+
+"Yes."
+
+"Can you tell me how I can get the coal to Italy?"
+
+"Yes."
+
+"Splendid! But how?"
+
+"By boats."
+
+"Oh, yes, I know, but have you got the boats and can I get them? I have
+the order, you see, and that is the main thing."
+
+"But, madam," asked the man, "have you cabled your company in America
+about the contract?"
+
+"No," answered the woman. "What's the use of doing that. I have no money
+to spend on cables. Besides, I have full power to act. The price is all
+right and the buyers are ready to sign but they want to put into the
+agreement some silly business about delivery and I am asking you to help
+me get the boats."
+
+"Come and see me," said the Manager.
+
+The woman promised to call the next morning, but she never came. Just
+what she had in mind the Manager could never quite tell. But one thing
+was proved in this and similar activities: The "Countess" and most of
+her sisters who have been trying to put over coal and other contracts in
+Paris, have little or no real authorisation for their performances, and
+the principal result has been to prejudice French and Italian buyers
+against us.
+
+In seeking to make French contracts, some of these adventurers (and they
+include both sexes) make the most extravagant claims. One group
+circulated a really startling prospectus. At the top was the imposing
+name of the corporation with a long list of branches in every part of
+the world. Then followed a list of names of individuals and firms with
+their assets supposed to be part and parcel of the corporation. One man
+whose name I had never heard before and who was set down as a
+Pittsburgher, was accredited with assets of $250,000,000. Under other
+individual and firm resources ranged from one to twenty-five million.
+The list included the name of a great American retail merchant, without
+his consent I might add, but the promoters had cunningly misspelled his
+name, which kept them within the pale of the law. The total assets of
+these "concerns personally responsible for all orders entrusted" was
+precisely $340,000,000. In spite of this dazzling array of
+misinformation, let it be said to the credit of the French buyer that he
+failed to fall for the glittering bait.
+
+The more you go into the reasons why so many of our business men have
+failed in France, the more you find out that plain everyday business
+organisation seems to be conspicuously absent. Take, for example, the
+question of credit. The average American doing business in France
+proceeds in the assumption that every Frenchman is dishonest. This being
+his theory, he either exacts cash in advance or sells "cash against
+documents." Such a procedure galls the Frenchman who is accustomed to
+long credit from English, German, Swiss and Spanish manufacturers and
+merchants.
+
+Of course, behind all these American errors in judgment and tact is a
+lack of organised credit information. To illustrate:
+
+When I was in London, the English Managing Director of one of the
+greatest of Wall Street Banks received an inquiry from his home office
+for information about the Compagnie Generale Transatlantique (the French
+Line). The amazing thing was that this bank, that prides itself on its
+world-wide information, had no data regarding the leading steamship line
+between England and France. You may be sure that the Credit Lyonnais or
+any other French banking institution has a complete record of the
+American Line.
+
+Not long ago, one of the largest banks in Chicago refused to extend
+credit to a French concern, although the French Government backed up the
+purchase. This concern had occasionally done business with a New York
+Trust Company in the Rue de la Paix, whose French Manager was a live,
+virile, far-seeing young American. The President of the French Company
+laid his case before him. Quick as a flash he said:
+
+"All right! If they won't guarantee it, I will, and on my own
+responsibility."
+
+Whereupon he put the deal through. It was the kind of swift, dramatic
+performance that appeals to the Frenchman. The net result was that the
+service has come back a hundredfold to the Trust Company.
+
+The idea prevailing in America that French firms are not worthy of
+credit is a matter of great surprise all over Europe. Here is the way an
+Englishman whose firm has done business in France for fifty years, sized
+up the situation:
+
+"There are no better contracts in the world than those entered into in
+France. Americans who have had little experience in such matters may
+find the negotiations leading up to the signing of a French contract
+somewhat tedious, but we do not mind this and one is so completely
+protected by the laws of the country, that losses are almost unknown.
+
+"Not long ago we had a case in point. A purchaser of lathes who had
+already made an advance payment, received his machines and then by
+various excuses put off the final payments for the remainder from week
+to week. We waited four weeks and then made our complaint to the judge
+at the tribunal. Two days later the judge ordered the delinquent firm
+to pay up in full and we received our money the very same day. How long
+do you think a New York court would have taken to decide a simple
+question of business of this kind? The fact is that in spite of the war,
+French credit remains to-day as good as any you can find."
+
+On top of their resentment over our lack of confidence in their credit
+is the added feeling which has cropped up since the beginning of the war
+over the way American manufacturers have ignored many of their French
+contracts. A French manufacturer summed it up in this way:
+
+"There is no doubt that some American manufacturers who had signed
+contracts for the delivery of machinery in France, deliberately sold
+these machines at home at higher prices. It has created a very bad
+impression and I am afraid that henceforth your salesmen will find it
+much harder to operate in my country.
+
+"The trouble is that Americans have been spoiled by too many orders.
+Before the war they were all crying out for business. Now that they have
+everything their own way, they have become independent and arrogant.
+With the ending of the war, all this will change, for the French are not
+likely to forget some of the bitter lessons they have learned.
+Henceforth they will profit by them."
+
+One reason for our laxity all up and down the French business line is
+that the American has never taken the French export business any too
+seriously. On the other hand, stern necessity has been the driving force
+behind the English and German manufacturer. The American, too, has made
+the great mistake of assuming that the foreigner, and especially the
+Frenchman, is not always serious-minded and to be depended upon. If he
+wants his mind disabused in this matter, let me suggest that he see him
+at war. He will realise that the superb spirit of aggression and
+organisation that mark him now is bound to last when peace comes.
+
+You must not get the impression from this long list of American business
+calamity that all our endeavour has failed in France. Those few great
+American corporations who have planted the flag of our commercial
+enterprise wherever the trade winds blow, have long and successfully
+held up their end throughout the Republic. So, too, with some
+individuals. The story of what one New Yorker did is an inspiring and
+perhaps helpful lesson in the right way to do business in France.
+
+This man is resolute and resourceful: he speaks French fluently and he
+was familiar with the foreign trade field. With the outbreak of war he
+did not lose his head and try to get business indiscriminately. Instead,
+he made a careful survey of the field; he did not listen to the optimist
+who said it would be a short war: his instinct told him, on the
+contrary, that it would be a long one. "What will France need more than
+anything else?" he asked himself.
+
+He realised that most of all France would need machine tools. He got the
+cables busy assembling goods, and by every known route he brought them
+to France. When he had a warehouse full of material, he began to sell.
+He not only had what the French were hungering for, but he had them to
+deliver overnight. While his colleagues were frantically trying to get
+their stuff in, he was getting all the business. The French like the
+man who makes good.
+
+This man met their expectations and to-day he stands at the top of the
+selling heap.
+
+More than this, he is building a factory on the outskirts of Paris where
+he will make and assemble his product. Ask him the reason why he is
+doing this, and he will tell you:
+
+"First, it means good will; second, we will get the benefit of native
+and cheap labour; third, we will be able to replace parts at once; and,
+fourth, we will get inside the wall of the Economic Alliance."
+
+
+
+
+IV--_The New France_
+
+
+No matter how we heed the example of the few progressive Americans who
+have successfully planted their business interests in France, we will
+face a new handicap when the war ends. As in England, we will be bang up
+against an industrial awakening that will mark an epoch. Coupled with
+this revival will be an efficiency born of the war needs that will act
+as a tremendous speeder-up.
+
+In France this galvanised industrial life will be stimulated by a
+brilliant imagination wholly lacking in the English temperament. It will
+go a long way toward opening up fresh fields of labour and distribution.
+
+Self-sufficiency will be the keynote. The automobile is a striking
+instance. We had established a very promising motor market (and
+especially with moderate-and low-priced cars) among the French. When the
+Government assumed control of the French automobile factories and
+changed their output to war munitions, the two great automobile
+syndicates protested that the cutting off of the French motor supply
+would mean an immense loss of good will. First came a 70 per cent duty
+on practically all American cars and this was followed up by an almost
+complete restriction of all American cars.
+
+This prohibition will have the same effect as the English exclusion in
+that it will stimulate the demand for the native French cars. Here we
+get to one of the striking phases of the new industrial development of
+immense concern to us. France has her eye on quantity output. Many signs
+point to it.
+
+When the war broke out, a certain young French engineer saw great
+opportunity in shell making. He was immuned from military service, he
+had a little capital of his own, and with Government aid he set to work.
+Within four months he had built an enormous plant on the banks of the
+Seine almost within the shadow of the Eiffel Tower. In six months he had
+enlarged his capacity so that he was producing 15,000 shells a day. Last
+summer he sent for the agent of a large American machinery company: "I
+am going to make automobiles in series after the war." "In series" is
+the French way of expressing quantity output.
+
+"All right," said the American. "What can I do for you?"
+
+"Simply this," said the Frenchman. "I wish to order sufficient
+automatics to meet the demand when peace comes."
+
+This is the spirit of the awakened French industry. I know of half a
+dozen automobile and other producing establishments who are making plans
+to manufacture popular-priced cars when the war is over. This output
+will not only affect the sale of American cars in France, but will also
+interfere with the market for our cheap machines in South America.
+Already France is making every effort to increase her Latin-American
+trade. She has immense sums of money invested in Brazil and she will
+follow up this advantage keenly.
+
+It is important for us to remember that France like England will have a
+well oiled productive machine after the war. It will not only be better
+but bigger than ever before. The German ill wind that devastated the
+northern section will blow good in the end. Hundreds of factories
+operated by hand labour before the war will now be equipped with
+American labour-saving machinery. The products of these machines
+operated by cheap labour will be in competition with our own commodities
+manufactured by more expensive labour in many of the markets of the
+world.
+
+Formerly the French artisan could produce an article almost from raw
+material to finished product: now he has learned to stand at an
+automatic and labour at a single part. In short, he is becoming a
+specialist which makes him a cog in the machine of quantity output.
+
+What is true of machines and men is also true of money. The old wariness
+of the French banker in underwriting industry is passing away. He is
+thinking in terms of large figures and vast projects.
+
+I could cite many examples of the new Gospel of French Self-Supply.
+Before the war France manufactured lathes that were beautiful examples
+of art and precision. The firms that made them were old and solid and
+took infinite pride in their product. Now they realise that output must
+dominate. A simple type of machine has been chosen as model and will
+henceforth be made in large quantities.
+
+Then there is the sewing machine. Before the war two
+groups--Anglo-American and German--controlled the French market. By the
+ingenious use of export premiums, the Germans had the best of it.
+
+"Why always pay tribute to strangers?" now asks the French housewife. So
+far as Germany is concerned, this question is already settled. But the
+American sewing machine will have to struggle for its existence
+hereafter in France, for plans have been made for at least three huge
+factories for its production.
+
+Striking evidence of the growing French industrial independence of
+Germany is her advance in crucible making. For years Sčvres vied with
+Limoges for ceramic honours. To-day the vast plant which once produced
+the most exquisite and delicate ware in the world is now producing the
+less lovely but more serviceable crucibles, condensers and retorts
+necessary for the distillation of the powerful acid used in modern high
+explosives. Previous to the war, the Central Empire had a monopoly on
+this market. Indeed, much of the pottery and glassware used in
+laboratories and chemical factories was made in Bohemia and marketed by
+Germany. Now the Sčvres plant is shipping these goods to England and
+Russia.
+
+So, too, with dye stuffs. A whole new French colouring industry is being
+created. A Société d'Etude has been formed to make a scientific survey
+and this will be replaced by a National Company to undertake the
+manufacture of all coal tar products.
+
+The use of a certain number of new war factories has been guaranteed to
+the company by the Minister of War. Typical of the purpose which will
+animate the enterprise is one of the articles of the National Company
+which provides that the Director of the Dye Stuff Industry must be of
+French birth. An agreement has also been made with England and Italy to
+protect the colour output of the three countries with a high tariff
+after the war. Here you find one tangible evidence of the working out of
+the Paris Economic Pact.
+
+Even while the invader's hand still lies heavy upon the land, France
+looks ahead to reconstruction. Last summer Paris flocked to a graphic
+exhibition of how to rebuild a destroyed city. It was called La Cité
+Réconstitué, and was held in the Tuileries Garden. Here you could see
+the modern way of making a Phoenix rise quickly out of the ashes. There
+were model schoolhouses, churches, factories, and cottages, all with
+standardised parts which could be thrown together in an almost
+incredibly short time.
+
+With Self-Sufficiency has come a desire for new business knowledge. Not
+long ago an American business man who has lived in Paris for many years,
+received a letter from a young French friend in the trenches at Verdun.
+The soldier wrote:
+
+"I realise that when this war is over we must be better equipped than
+ever before to meet world business competition. I want to be a better
+salesman. Please send me some books on American salesmanship and also
+some of the American trade papers. I have begun the study of Spanish
+because I believe we are going to have our part in the Latin-American
+trade." Here was a young Frenchman risking his life every moment in one
+of the greatest battles the world has ever known: yet in the midst of
+death he was looking forward to a new business life.
+
+The whole attitude of the Frenchman toward life has undergone a change,
+first under the stress of ruthless war, and under the spur of his
+kindling desire for rehabilitation. Formerly, for example, the French
+loathed to travel. When he knew he was going away on a journey, he spent
+a month telling his relatives good-bye. Now he packs his bag and is off
+in an hour to Lyon, Marseilles, Bordeaux, or any other place where
+business might dictate.
+
+The new and efficient French industrial machine is not the only factor
+that American business in France must reckon with after the war. The
+French woman is fast becoming a force, thus setting up an altogether
+unequal and almost unfair competition, because to shrewd wit and
+resource is added the power of sex and beauty.
+
+In France, as most people know, the woman exerts an enormous influence,
+regardless of her social class. In all regulated bourgeois families the
+wife holds the purse strings; in the small shops she keeps the cash and
+runs things generally. No average Frenchman would think of embarking on
+any sort of enterprise without first talking it over with his _femme_,
+who is also his partner. This team work lies at the root of all French
+thrift.
+
+The woman of the lower class has met the grim emergency of war with
+sacrifice and courage. Not only has she faced the loss of those most
+dear with uncomplaining lips, but she has taken her man's place
+everywhere. You can see her standing Amazon-like in leather apron
+pouring molten metal in the shell factory; she drives you in a cab or a
+taxi; she runs the train and takes the tickets in the Underground: in
+short, she has become a whole new asset in the human wealth of the
+nation and as such she will help to make up for the inevitable shortage
+of men.
+
+Her sister of the upper class, at once the most practical and most
+feminine of her sex, is also doing her bit. She is the lovely thorn in
+the path of the American business promoter in France.
+
+Before the war, it was rare to find this type of woman competing with
+men in outside business affairs, although her influence has always
+counted immensely in official life where she pulls the strings to get
+husband or lover Government preferment or concession.
+
+Since the war, however, necessity has sharply developed her latent
+business qualities. Now it is not unusual to find her in direct
+competition, using all those delightful charms with which Nature has
+endowed her. This is especially true of widows and women whose husbands
+are at the front. They often rely more upon persuasion than upon any
+technical or practical knowledge. One reason why they succeed is their
+almost uncanny knowledge of men. And this often enables them to grasp
+swiftly the clue that business opportunity offers.
+
+One night at dinner a Colonel's widow, a gracious and beguiling lady,
+heard that the French Government was in the market for 50,000 head of
+cattle. The next morning she sent half a dozen cables to South America,
+got options, and in three days her formal bid was at the War Office.
+Within a week she had the contract.
+
+I know of a case of the wife of a Colonel at the front, who heard one
+day at lunch that the War Office needed 50,000 sacks of flour for the
+army at Saloniki. That same day she put the matter before some American
+brokers in Paris, who wired to their New York firm and received the
+usual American reply: "Am not interested in the French trade now. Will
+wait until after the war."
+
+With the utmost difficulty the woman was able to secure 10,000 sacks by
+way of Italy and Switzerland. She is not likely to seek American sources
+of supply soon again.
+
+An American got a tip one day that a certain contract for machine tools
+was available. He had an appointment for lunch, so he said to himself:
+"Why hurry? These French people are slow. I'll get busy this afternoon
+or to-morrow."
+
+When he went to the establishment in question the next day, he found
+that an exquisitely gowned woman had just preceded him; indeed, the
+fragrance of the perfume she used still hovered about the outer office.
+The man cooled his heels for half an hour when the lovely feminine
+vision flashed by him going out. He started to make his selling talk to
+the Purchasing Agent, who said, at the first opening:
+
+"I am extremely sorry, Monsieur, but we have just closed the contract
+with Madam Blank who left a few moments ago."
+
+The New France has brought forth a New Woman!
+
+Through all the organised approach to Self-Sufficiency and Economic
+Rehabilitation, France has not lost sight of her grudge against the
+Germans. Indeed, no phase of her business life to-day is more
+picturesque than the campaign now in full swing not only against
+Teutonic trade, but against any resumption of commercial relation with
+the hated enemy across the Rhine. Right here you get a striking
+difference between English and French methods. While Britain takes out
+some of her enmity against German trade in eloquent conversation, France
+has gone about it in a practical way, shot through with all the colour
+and imagination that only the French could employ upon such procedure.
+
+Preliminary to this campaign was a characteristic episode. Almost with
+the flareup of war, the French mind turned sentimentally to those
+fateful early Seventies when Germany in the flush of her great victory
+seized the fruits of that triumph. Some of those fruits were embodied
+in the famous Treaty of Frankfort in which the Teuton clamped the mailed
+fist down on every favoured French trade relation.
+
+The war automatically annulled this treaty, and although the nation was
+in the first throes of a struggle that threatened existence, it
+celebrated the revocation in characteristic fashion. Millions of copies
+of the Frankfort Treaty were printed and sold on the streets of Paris
+and elsewhere. The excited Frenchman rushed up and down brandishing his
+copy and saying: "Now we will ram this treaty down the throat of the
+Boche!"
+
+This emotional prelude was now followed by a definite crusade for the
+elimination of German goods. Anti-German societies were formed all over
+the country. Backing these up are dozens of other formidable
+organisations, such as Chambers of Commerce and Business Clubs. Typical
+of the campaign is the formation of a Buyers' League which is intended
+to assemble all persons who will take a resolution never to buy a German
+product and be satisfied for the remainder of their lives with the
+French manufactured article.
+
+Wherever you go in France, you find some concrete and striking evidence
+of the Anti-German wave. When you get a bundle from a Paris shop, you
+are likely to find stuck on it a brilliantly coloured stamp showing a
+pair of bloody hands holding a number of packages, the largest one
+labeled "made in Germany." Under it is the sentence in French reading:
+"Frenchmen, do not buy German products. The hands that made are reddened
+with the blood of our soldiers."
+
+There is great variety in these stamps, which are used on letters and
+packages. One of the most popular shows a helmeted German with a brutal
+face holding a smiling mask before his visage. In one hand he holds a
+bundle marked "Made in Germany." On this stamp is the inscription:
+"Mistrust their smiles--in every German there is a spy."
+
+Still another and equally popular stamp pictures a soldier with bandaged
+head standing by a prostrate comrade and pointing to a fleeing German.
+The inscription reads: "We chase the Germans during the war. You,
+civilians, will you allow them to return after peace?"
+
+One stamp used much throughout the Provincial French cities shows a
+woman in deep mourning weeping over a grave marked with a cross
+surmounted by a red soldier cap. The woman is supposed to be saying
+these words: "French people, buy no more German products. Remember this
+grave."
+
+A companion stamp shows a figure representing the French Republic and
+holding the tri-colour. The flag is attached to a spear with which she
+is piercing the breast of a German eagle on the ground. At her side is
+the national bird of France, the Cock, crowing triumphantly. Underneath
+are the words: "Refuse all German products."
+
+Similar in idea is another dramatic conception showing a white robed
+female figure holding a battle axe in one hand and pointing with the
+other to a burning cathedral. Her words are: "Frenchmen, do not consume
+any German products. Remember 1914."
+
+Most of the large French cities have their own Anti-German stamps which
+are enlarged and used on billboards as posters. A typical city stamp is
+that of Lyon, which shows a Cock in brilliant colours standing proudly
+in the red and blue rays of a white sun. Attached is the legend:
+"National League of Defence of French Interests--The Anti-German League:
+Buy French Products."
+
+The City of Marseilles has a stamp showing the French Cock standing on a
+German helmet surrounded by the words "Anti-German League." Elsewhere on
+the stamp is the inscription: "No more of the people--No more German
+products."
+
+Whether the Frenchman buys or sells, he has poked under his nose or
+flaunted before his eyes every hour of the business day some concrete
+evidence that his country has put the German people and their products
+under the ban.
+
+In connection with this campaign are some facts of utmost significance
+to the American business man who has studied the intent and purpose of
+the Paris Economic Pact which is described in a previous chapter, and
+which declared for an Allied war of economic reprisal against Germany
+and the other Central Powers. In that chapter, as you may recall, the
+point was made that since individuals and not nations do business, the
+Pact was likely to fail.
+
+With their usual intelligence, the French understand this, and their
+whole educational campaign at home is to make the individual Frenchman
+immune against the lure of the cheap German products. The French know
+that it is the sum of individual French resistance to German buying that
+will keep the German product forever outside the realm of the Republic.
+
+Indeed, the clearest-minded men in France to-day believe that more
+commercial advantage will accrue to France by the intensive development
+of her resources, the perfection of old industries and the creation of
+new ones than in the formation of committees devoted to plans for
+commercial alliances dedicated to reprisal. In other words, this helps
+to bear out the theory held in many quarters that the economic pact is
+after all merely a campaign document and utterly impracticable.
+
+In France there are other signs that point to a rift in the Pact. While
+I was in Paris, a well known Senator pointed out that as soon as the
+war ended France would need coal and would look to Italy for it as she
+had done in the past. To obtain her coal more cheaply than she is now
+doing from the United States or England, Italy would very likely make
+concessions to Germany in order to obtain German fuel. The result would
+be an interchange of merchandise between the two countries regardless of
+the decree of the Paris Pact. The question arises: Could France place
+restrictions upon the Italian frontier to the annoyance of her Allies?
+
+Meanwhile France is seeking immunity from any future coal crisis by
+developing a system of hydraulic power which will not only be
+economical, but will also help to cut down her imports. It is just one
+more phase of the ever-widening programme of Self-Sufficiency.
+
+Despite our past blunders, our present lack of organised initiative, and
+the efforts toward Self-Supply, the future holds a large business
+opportunity for America in France. As a matter of fact, half of the
+selling work is already registered because the French are eager and
+anxious to do business with their great sister democracy across the
+sea. It is, therefore, up to the American exporter to capitalise the
+needs of the nation and the good will that it bears toward us. But it
+must be done now.
+
+For one thing, it cannot be achieved without constructive co-operative
+work. Groups of exporters must organise and establish offices in Paris
+and elsewhere in France. The reason for this is that the Frenchman
+abhors the fly-by-night salesman: he likes to feel that the man with
+whom he is trading has taken some sort of root in his midst.
+
+With organisation must come knowledge. Why did the Germans succeed so
+amazingly in France? Geographical proximity and the Frankfort Treaty
+helped some, but the principal selling power he wielded was that he
+lived with his clients, found out what they wanted, and gave it to them.
+If a French farmer, for example, wanted a purple plough share fastened
+to a yellow body, the German assumed that he knew what he wanted and
+made it for him. The average American exporter, on the other hand, has
+always assumed that the foreign customer had to take what was given to
+him. For this reason we have failed in South America and for this
+reason we will fail in France unless we change our methods. Knowledge is
+selling power.
+
+We must be prepared to give the French long credits, and if necessary,
+finance French enterprises. Despite her immense gold hoardings, she may
+feel an economic pinch after the war. We must also have sound and
+organised French credit information.
+
+Our salesmen must know the French language and sympathise with the
+French temperament. Give the French buyer a ghost of a chance and he
+will meet you more than half way. Unlike the stolid Englishman he is
+plastic, adaptable and imaginative. Understanding is a large part of the
+trade battle.
+
+We must accumulate large stocks of American goods in France to indulge
+the purchaser in his favourite occupation of long and elaborate choosing
+and to meet demands for renewal. To ship these goods we must have our
+own bottoms. Here, as elsewhere in the whole export outlook, is the old
+need of a merchant marine.
+
+But we will never realise our trade destiny in France without
+reciprocity. We cannot sell without buying. France looks to us to take
+part of the huge flood of goods that once went to Germany. We take some
+of her wine: we must take more. We buy her silks and frocks: the
+American market for them must now be widened. We depended upon Germany
+for many of our toys: France expects the Anglo-Saxon nursery henceforth
+to rattle with the mechanical devices which will provide meat and drink
+for her maimed soldiers. And so on down a long list of commodities.
+
+All this means that before the mood cools we must conclude new
+commercial treaties with France and assure for ourselves a really
+favoured nation relation that carries the guarantee of a permanent
+foreign trade now so necessary to our permanent prosperity.
+
+In the last analysis you will find that it is France and not England to
+whom we must look for the larger commercial kinship after the war. The
+spirit of the awakened Britain, so far as we are concerned, is the
+spirit of militant trade conquest: the dominant desire of the speeded-up
+France is benevolent Self-Sufficiency.
+
+Whether England realises her vast dream remains to be seen. But one
+thing is certain: No man can watch France in the supreme Test of War
+without catching the thrill of her heroic endeavour, or feeling the
+influence of that immense and unconquerable serenity with which she has
+faced Triumph and Disaster. They proclaim the deathlessness of her
+democracy, the hope of a new world leadership in art and craft.
+
+She will be a worthy trade ally.
+
+
+
+
+V--_Saving for Victory_
+
+
+By making patriotism profitable, England has enlisted an Army of Savers
+and launched the greatest of all Campaigns of Conservation. No contrast
+in the greatest of all conflicts is so marked as this flowering of
+thrift amid the ruins of a mighty extravagance. The story of Britain's
+"Economy First" campaign is a chapter of regeneration through
+destruction that is full of interest and significance for every man,
+woman, and child in the United States. Through self-denial a complete
+revolution in national habits has begun. Out of colossal evil has come
+some good.
+
+It has taken a desperate disease to invoke a desperate remedy. The
+average American, firm in his belief that he holds a monopoly on world
+waste, has had, almost without his knowledge, a formidable rival in
+England these past years. Whether the visiting Yankee tourist helped to
+set the pace or not, the fact remains that when the war broke over
+England she was as extravagant as she was unprepared.
+
+The Englishman, like his American brother, though unlike the Scotch, is
+not thrifty by instinct. He regards thrift as a vice. He prefers to let
+the tax gatherer do his saving for him. He believes with his great
+compatriot Gladstone that "it is more difficult to save a shilling than
+to spend a million."
+
+Contrasting the Englishman and the Frenchman in the matter of economy,
+you find this interesting parallel: With the Frenchman the first
+question that attends income is "How much can I _save_?" Saving is the
+supreme thing. With the Briton, however, it becomes a matter of "How
+much can I _spend_?" Saving is incidental.
+
+To associate thrift with the British workingman is to conceive a
+miracle. To be sure, he seldom had anything to save before the war. But
+with the speeding-up of industry to meet the insatiate hunger for
+munitions and the corresponding increase of from thirty to fifty per
+cent, even more, in wages, he suddenly began to revel in a wealth that
+he never dreamed was possible. The more he made the more he spent. He
+squandered his financial substance on fine cigars, expensive clothes,
+and excessive drinks, while his wife bedecked herself in gaudy finery
+and installed pianos or phonographs in her house. No one thought of
+To-morrow.
+
+Just as it took the shock of a long succession of military reverses to
+rouse the English mind to the consciousness that the war would be long
+and bitter, so did the abuse of all this temporary and inflated war time
+prosperity bring to far-seeing men throughout England the realisation
+that the British people, and more especially those who worked with their
+hands, were booked for serious social and economic trouble when peace
+came, unless they saw the error of their wasteful ways.
+
+"What can we do to stem this tide of extravagance and at the same time
+plant the seed of permanent thrift," asked these men who ranged from
+Premier to Prelate. No one knew better than they the difficulties of the
+task before them. In England, as in America, thrift is more regarded as
+a vice than a virtue. Like the taste for olives it is an acquired
+thing. To spend, not to save, is the instinct of the race.
+
+But there were other and equally serious reasons why all England should
+buck up financially and make every penny do more than its duty. First
+and foremost was the terrific cost of the war that every day took its
+toll of $25,000,000; second was the enormous increase in imports and the
+diminished flow of exports, a reversal of pre-war conditions that meant
+that England each day was buying $5,000,000 worth of goods more than
+other countries were purchasing from her; third was the human shrinkage
+due to the incessant demand of battlefield and factory. Everywhere was
+colossal expenditure of men and money: nowhere existed check or
+restraint. Something had to be done.
+
+It was generally admitted that the first thing for everybody to do was
+to spend less on themselves than in times of peace. When, where and how
+to save became the great question. To save money at the cost of
+efficiency for essential and urgent work was not true economy. "But,"
+said the thrift promoters, "waste is possible even in the process of
+attaining efficiency. For example, people may eat too much as well as
+too little, they may buy more clothes than they actually need, ride when
+they could walk, employ a servant when they could do their own work, use
+their motors when they could travel in a tram."
+
+Thus every class came within the range of the lightning that was about
+to strike at the root of an ancient evil.
+
+The start was interesting. Before the war was a year old definite order
+emerged of what was at the beginning a scattered protest against
+reckless spending. But long before the first organised message of saving
+went to the home and purse of the worker, the rich began to economise.
+Here is where you encounter the first of the many ironies and contrasts
+that mark this whole campaign. The people who could most afford to be
+extravagant were the first to draw in their horns. This, of course, was
+not particularly surprising because the rich are naturally thrifty. It
+is one reason why they get and stay rich.
+
+Among the pioneer organisations was the Women's War Economy League
+founded and developed by a group of titled women who got hundreds of
+their sisters to pledge themselves to give up unnecessary entertaining,
+not to employ men servants unless ineligible for military service, to
+buy no new motor cars and use their old ones for public or charitable
+work, to buy as few expensive articles of clothing as possible, to
+reduce in every way their expenditures on imported goods, and to limit
+the buying of everything that came under the category of luxuries.
+Champagne was banned from the dinner table, décolleté gowns disappeared:
+men substituted black for white waistcoats in the evening.
+
+The rich really needed no organised stimulus to retrench. The great
+target for attack was the mass of the population who did not know what
+it meant to save and who required just the sort of constructive lesson
+that an organised thrift movement could teach.
+
+Much of the increase in wages among the workers was going for food and
+drink. Hence the opening assault was made on the market bill.
+Fortunately, an agency was already in operation. At the outbreak of the
+war a National Food Fund was started to feed the hungry Belgians. That
+work had become more or less automatic (the Belgians' appetite is a
+pretty regular clock), so its machinery was now trained to the twin
+conservation of British stomachs and savings.
+
+"Save the Food of the Nation," was the appeal that went forth on every
+side. "No One is too Rich or Poor to Help. Every man, woman and child in
+the country who wants to serve the state and help win the war can do so
+by giving thought to the question of conserving food. Since the great
+bulk of our food comes from abroad, it takes toll in men, ships and
+money. Every scrap of food wasted means a dead loss to the Nation in
+men, ships and money. If all the food that is now being wasted could be
+saved and properly used it would spare more money, more ships, more men
+for the National defence."
+
+Now began a notable campaign of education which was carried straight
+into the kitchen. Food demonstrators whose work ranged from showing the
+economy of cooking potatoes in their skins to making fire-less cookers
+out of a soap box and a bundle of straw, went up and down the Kingdom
+holding classes. In town halls, schools, village centres and
+drawing-rooms, mistress and maid sat side by side. "Waste nothing," was
+the new watchword.
+
+Backing up the uttered word was a perfect deluge of literature that
+included "Hand Books for House Wives," "Notes on Cooking," "Hints for
+Saving Fuel," "Economy in Food," in fact, dozens of pamphlets all
+showing how to make one scrap of food or a single stick of wood do the
+work of two.
+
+The people behind this movement knew that with waste of food was the
+kindred waste of money. They realised, too, that even the most effective
+preachment for food economy must inevitably be met by the cry,
+"Everybody must eat." With money, on the other hand, there seemed a
+better opportunity to drive home a permanent thrift lesson. So the
+forces that had built the bulwark around the English stomach now set to
+work to rear a rampart about the English pocketbook.
+
+Circumstances played into their hand. The Great War Loan of
+$3,000,000,000 had just been authorised. "Why not make this loan the
+text of a great National thrift lesson and give every working man and
+woman a chance to become a financial partner of the Empire," said the
+saving mentors. It was decided to put part of this loan within the range
+of everybody, that is, to issue it in denominations from five shilling
+scrip pieces up, to sell it through the post office and thus bring the
+new savings bank to the very doors of the people.
+
+Again a machine was needed, and once more as in the case of the food
+campaign one was well oiled and accessible. It was the organisation that
+had raised, by eloquent word and equally stimulating poster and
+pamphlet, the great volunteer army of 3,000,000 men. Just as it had
+drawn soldiers to the fighting colours, so did it now seek to lure the
+savings of the people to the financial standard of the nation.
+
+The Parliamentary Recruiting Committee became the Parliamentary War
+Savings Committee and it loosed a campaign of exploitation such as
+England had never seen before. From newspapers, bill boards and rostrums
+was hurled the injunction to buy the War Loan and help mould the Silver
+Bullet that would crush the Germans. It was literally a "popular loan"
+in that the five shilling short-term vouchers, bought at the post
+office, and which paid 5 per cent, could be exchanged when they had
+grown to five pounds for a share of long-term War Stock paying 4˝ per
+cent. The higher rate of interest was the inducement to begin saving and
+it worked like a charm.
+
+Tribute to the efficacy of this programme is the fact that more than
+1,000,000 English workers purchased the War Loan. Through this procedure
+they learned, what most of them did not know before, that when you put
+money out to work it earns more money. It meant that they had become
+investors and were starting on the road to independence.
+
+But this campaign, admirable as it was in scope and execution, failed in
+its larger purpose of reaching the great mass of the people. While more
+than 1,000,000 workers participated in the loan their holdings really
+comprised but a small percentage of the immense total. The bulk of the
+buying was by banks, corporations, trustees, and wealthy individuals.
+The message, therefore, of permanent thrift combined with a more or
+less continuous investment opportunity for every man still had to be
+delivered. All the while the Empire hungered for money as well as for
+men.
+
+Such was the state of affairs when the Chancellor of the Exchequer
+appointed the Committee on War Loans for the Small Investor. It had two
+definite functions: to raise funds for the national defence and to
+provide through the medium selected some simple and accessible means for
+the employment of the average man's money.
+
+This Committee recommended that an issue be made of Five Per Cent
+Exchequer Bonds in denominations of five, twenty and fifty pounds to be
+sold at all post offices. It was an excellent idea and was immediately
+authorised by the Treasury. The Exchequer Bond became part of the
+swelling flood of British war securities and might have had a
+distinction all its own but for the enterprise and sagacity of one man
+who happened to be a member of this Committee.
+
+That man was Sir Hedley Le Bas. You must know his story before you can
+go into the part that he played in the great drama of British investment
+that is now to be unfolded. A generation ago he was the lustiest lad in
+Jersey, his birthplace. His feats as swimmer were the talk of a race
+inured to the hardships of the sea. After seven years in the Army he
+came to London to make his fortune. From an humble clerical position he
+rose to be head of one of the great book publishing houses in Great
+Britain, employing over 400 salesmen, spending over a quarter of a
+million dollars a year in advertising alone.
+
+Sir Hedley is big of bone, dynamic of personality, more like the alert,
+wideawake American business man than almost any other individual I have
+ever met in England. One day he gave the British publishing business the
+jolt of its long and dignified life by taking a whole page in the _Daily
+Mail_ to advertise a single book. His colleagues said it was
+"unprofessional," that it violated all precedent. Sir Hedley thought to
+the contrary and in vindication of his judgment the book developed into
+a "best seller." That pioneer page in the _Mail_ was the first of many.
+
+Prior to the outbreak of the present war, Sir Hedley had been consulted
+by the then Minister of War as to the most advisable means of getting
+recruits.
+
+"Why don't you advertise?" he asked.
+
+"It's never been done before," replied the Minister.
+
+"Then it's high time to begin," said the hard-headed Jerseyman.
+
+His plan scarcely had time to be considered when the Great War broke.
+Sir Hedley was made a member of the Parliamentary Recruiting Committee
+and with Kitchener helped to face England's huge problem of raising a
+volunteer army. How was it to be done?
+
+Hardly had the new War Chief warmed the chair in his office down in
+Whitehall, than Le Bas came to him with this suggestion: "The quickest
+way to raise the new army is to advertise for men."
+
+Kitchener's huge bulk straightened: he looked surprised: the idea seemed
+unsoldierly, almost unpatriotic. But he knew Le Bas. After a moment's
+hesitancy:
+
+"All right. Go ahead."
+
+Under Le Bas was launched the publicity campaign which no man who
+visited England during its progress will ever forget. This galvanic
+publisher geared all the Forces of Print up to the idea of selling
+Military Service. Instead of books the Merchandise was Men.
+
+The most lureful, colourful and effective posters that artist brain
+could possibly conceive flashed from every bill board in the Kingdom. No
+one could escape them.
+
+It was Le Bas who created the phrase "Your King and Country Need You"
+that went echoing throughout the Kingdom and drew more men to the
+colours perhaps than any other plea of the war.
+
+When the Parliamentary Recruiting Committee became the Parliamentary War
+Savings Committee, Le Bas went with it. Its first job was to sell the
+Great War Loan. The Treasury officials wanted it done in the usual
+dignified British way.
+
+At the first meeting of the Committee, Le Bas objected to this
+procedure. Early the next morning he went around to the house of
+Reginald McKenna, Chancellor of the Exchequer.
+
+"The Chancellor is in his bath," said the footman who opened the door.
+
+"Then I'll wait until he can get a robe on," said Le Bas.
+
+Fifteen minutes later, the man who holds the British purse strings sat
+clad in a dressing gown and listened to the suggestion that
+revolutionised British methods of financial salesmanship.
+
+"If we want to sell the War Loan, Mr. Chancellor," said Sir Hedley, "we
+will have to advertise in a big way. It's a business proposition and we
+must adopt business methods."
+
+"It sounds interesting," said the Chancellor. "Come to my office at ten
+and we will talk it over."
+
+It was then 8:30 o'clock. By the time he met the Chancellor at the
+Treasury he had dictated the whole outline of the advertising campaign.
+The scheme was adopted: the Government spent fifty thousand pounds
+advertising the loan but it sold every penny of it.
+
+This then was the type of man who had sat in the six meetings of War
+Loan for Small Investors and listened to many conventional suggestions.
+He instinctively knew that the Five Pound Exchequer Bond was not a
+sufficient bait to hook the small savings of the great mass of the
+people.
+
+"We've got to make some kind of attractive offer," said Sir Hedley to
+himself. "In fact, we must give the investor something for nothing to
+make him lend his money to the country. A pound note looks big to the
+average Englishman. Why not give him a pound for every fifteen shillings
+and sixpence that he will lay aside for the use of the Nation? In other
+words, why not make patriotism profitable?"
+
+When he laid this plan before the Committee, it was unanimously
+approved. The maxim of "Fifteen and Six for a Pound" was now unfurled to
+the breezes and the super-campaign to corral the British penny was on,
+under the auspices of the National War Savings Committee which now
+superseded all other organisations as the head and front of the National
+Thrift idea.
+
+Although he had a strong selling appeal in the fact that he was giving
+the small British investor something for nothing, Sir Hedley realised
+that his first bid for savings must have the real punch of war in it.
+What was it to be?
+
+He thought a moment and then went over to the War Office where Lloyd
+George had just succeeded the lamented Kitchener.
+
+"What could a man buy for fifteen and six?" he asked the many-sided
+little Welshman who was progressively filling every important job in the
+Empire.
+
+"He could buy six trench bombs," was the reply.
+
+"What else?" queried the publisher.
+
+"He could get 124 cartridges or--"
+
+"That's enough!" exclaimed Le Bas. "I've got it!"
+
+Lloyd George looked a little startled, whereupon his visitor remarked:
+"You have given me just the thing I wanted. Wait until to-morrow and you
+will find out what it is."
+
+The very next day Lloyd George and a great part of the whole British
+Nation knew exactly what Sir Hedley got out of his interview with the
+War Minister, because the first advertisement announcing the new type of
+War Loan read like this:
+
+
+     "ONE HUNDRED AND TWENTY-FOUR CARTRIDGES FOR FIFTEEN AND SIX, AND
+                   YOUR MONEY BACK WITH COMPOUND INTEREST
+
+     "Do you know that every 15/6 you put into War Savings Certificates
+     can purchase 124 rifle cartridges?
+
+     "How many Cartridges will you provide for our men at the Front?
+
+     "For every 15/6 you put into War Savings Certificates now you will
+     receive Ł1 in five years' time. This is equal to compound interest
+     at the rate of 5.47 per cent.
+
+     "Each year your money grows as follows:
+
+
+                          In 1 year  it becomes 15/9
+                          In 2 years it becomes 16/9
+                          In 3 years it becomes 17/9
+                          In 4 years it becomes 18/9
+                          In 5 years it becomes   Ł1
+
+
+     "If you need it you can withdraw your money at any time, together
+     with any interest that has accrued."
+
+
+This advertisement made a good many people sit up because it brought
+home for the first time one concrete use of the money absorbed in war
+loans.
+
+The National War Savings Committee had two things to sell. One was the
+Five Per Cent Exchequer Bond: the other was the new Fifteen and Six War
+Savings Certificate. The promoters were quick to see that while the
+Exchequer Bond was very desirable, the principal effort must be
+concentrated on the War Savings Certificate for which the widest appeal
+and the best selling talk could be made.
+
+That it was a good "buy" nobody could deny. It was the obligation of the
+British Government: it was free from Income Tax: it could be cashed in
+at any time at a profit: and it made the owner part and parcel of the
+financing of the war. Every post office and nearly every bank became a
+selling agent. In short, it was a simple, cheap and worth-while
+investment absolutely within the scope of every one.
+
+At the outset the sale was restricted to those whose income did not
+exceed $1,500, the purpose being to keep the investment among the wage
+earners. So many munition workers were receiving such large incomes
+that this ban was removed. The only limitation imposed was that no
+individual could hold more than 500 Certificates. This did not prevent
+the various members of a family, for example, from each acquiring the
+full limit.
+
+Having decided to make the War Savings Certificate its prize commodity,
+the Committee proceeded to launch a spectacular, even sensational
+promotion campaign. J. Rufus Wallingford in his palmiest days was never
+more persuasive than the literature which now fairly flooded Great
+Britain.
+
+The phrase "Your King and Country Need You" that had stirred the
+recruiting fever now had a full mate in the slogan "Saving for Victory"
+which began to loosen pounds and pence from their hiding places. The
+injunction that went forth everywhere was
+
+
+                     "WORK HARD: SPEND LITTLE:
+                            SAVE MUCH"
+
+
+From every bill board and every newspaper were emblazoned:
+
+
+                  "SIX REASONS WHY _YOU_ SHOULD SAVE"
+
+     Here are the reasons:
+
+     1. Because when you save you help our soldiers and sailors to win
+     the war.
+
+     2. Because when you spend on things you do not need you help the
+     Germans.
+
+     3. Because when you spend you make other people work for you, and
+     the work of every one is wanted now to help our fighting men, or to
+     produce necessaries, or to make goods for export.
+
+     4. Because by going without things and confining your spending to
+     necessaries you relieve the strain on our ships and docks and
+     railways and make transport cheaper and quicker.
+
+     5. Because when you spend you make things dearer for every one,
+     especially for those who are poorer than you.
+
+     6. Because every shilling saved helps twice, first when you don't
+     spend it and again when you lend it to the Nation.
+
+
+The word "Save" which had dropped out of the British vocabulary suddenly
+came back. It was dramatised in every possible way and it became part of
+a new gospel that vied with the war spirit itself.
+
+The National War Savings Committee became a centre of activity whose
+long arms reached to every point of the Kingdom. Branch organisations
+were perfected in every village, town and county: the Admiralty and the
+War Office were enlisted: through the Board of Education every school
+teacher became an advance agent of thrift: the Church preached economy
+with the Scripture: in a word, no agency was overlooked.
+
+The sale of Certificates started off fairly well. On the first day more
+than 2,000 were sold and the number steadily increased. But while many
+individuals rallied to the cause, there was not sufficient team work.
+
+One serious obstacle stood in the way. While fifteen shillings and a
+sixpence is a comparatively small sum to a man who makes a good income,
+it looms large to the wage earner, especially when it has to be "put by"
+and then goes out of sight for four or five years. So the National War
+Savings Committee set about establishing some means by which the
+average man or woman could start his or her investment with a sixpence,
+that is, twelve cents. Even here there was a difficulty. Millions of
+people in England could save a sixpence a week, but the chances are that
+before they piled up the necessary fifteen and six to buy the first
+Certificate they would succumb to temptation and spend it.
+
+The English small investor, like his brother nearly everywhere, is a
+person who needs a good deal of urging or the power of immediate example
+about him. Thereupon the Committee said: "What seems impossible for the
+individual, may be possible for a group."
+
+Thus was born the idea of the War Savings Association, planned to enable
+a group of people to get together for collective saving and co-operative
+investment. This proved to be one of the master strokes of the campaign.
+From the moment these Associations sprang into existence, the whole War
+Savings Certificates project began to boom and it has boomed ever since.
+
+War Savings Associations are groups of people who may be clerks in the
+same office, shop assistants in the same establishments, workers in the
+same factory or warehouse, people attending the same place of worship,
+residents in any well-defined locality such as a village or ward of a
+town, members of a club, the servants in a household: in short, any
+number of people who are willing to work together. Some have been
+started with 10 members, others with as many as 500. Up to the first of
+January nearly 10,000 of these Associations had been formed throughout
+the Kingdom.
+
+Now came the inspiration that was little short of genius for it enabled
+the lowliest worker who could only set aside a sixpence a week to become
+an intimate part of the great British Saving and Investment Scheme. The
+idea was this:
+
+If one man saves sixpence a week, it would take him thirty-one weeks to
+get a One Pound War Certificate. But if thirty-one people each save
+sixpence a week, they can buy a Certificate at once and keep on buying
+one every week. Thus their savings begin to earn interest immediately.
+Thus every War Savings Association became a co-operative saving and
+investment syndicate--a pool of profit.
+
+How are the Certificates distributed? The usual procedure is to draw
+lots. In a small Association no member is ordinarily permitted to win
+more than one Certificate in a period of thirty-one weeks, except by
+special arrangement. Each Association, however, can make its own
+allotment rules. The value of winning a Certificate the first week is
+that the winner's 15/6 will have grown to one pound in four years and a
+half instead of five. This is broadly the financial advantage gained by
+being a member of an Association, although the larger reason is that it
+is more or less compulsory as well as co-operative saving.
+
+Britain is buzzing with these War Savings Associations. You find them in
+the mobilisation camps, on the training ships, on the grim grey fighters
+of the Grand Fleet, even in the trenches up against the battle line. The
+London telephone girls have their own organisation: sales forces of
+large commercial houses are grouped in thrift units: there are saving
+battalions in most of the munition works, and so it goes. In many of
+the big mercantile establishments that have Associations, the weekly
+drawings of Certificates with all their elements of chance and profits
+are exciting events.
+
+Many Britishers shy at co-operation. For example, they like to save "on
+their own." To meet this desire, the War Savings Committee devised an
+individual saving and investment plan which begins with a penny, that is
+two cents. Any person can go to the Treasurer of a War Savings
+Association and get a blank stamp book. Each penny that he deposits is
+marked with a lead pencil cross in a blank square. When six of these
+marks are recorded, a sixpenny stamp is pasted on the blank space. As
+soon as the book contains thirty-one stamps it is exchanged for a War
+Savings Certificate.
+
+Still another plan has been devised to meet requirements of people who
+do not care to affiliate with the War Savings Associations. Any post
+office will issue a stamp book in which ordinary sixpenny postage stamps
+can be pasted. When thirty-one have been affixed they may be exchanged
+at the post office for a pound Savings Certificate. These books have
+this striking inscription on their cover: "Save your Silver and it will
+turn into Gold! 15/6 now means a sovereign five years hence."
+
+The whole Savings Campaign is studded with picturesque little lessons in
+thrift. The London costers--the pearl-buttoned men who drive the little
+donkey carts--subscribed to $1,000 worth of Certificates in a single
+week, although they had made a previous investment of $4,000.
+
+In hundreds of factories the idea has taken root. In some of them War
+Savings subscriptions are obtained by means of deductions from wages.
+Employees can sign an authorisation for a certain amount to be taken
+each week or month out of their wages. They get accustomed to having
+two, three, four or five shillings lifted out of their wages and thus
+their saving becomes automatic.
+
+Often the employer helps the movement by contributing either the first
+or last sixpence of each Certificate or offering Certificates as bonuses
+for good conduct or extra work. When one small employer that I heard of
+pays his men their War Bonus, he gets them, if they are willing, to
+place two sixpenny stamps on a stamp card, for which he deducts
+tenpence. The employees are thus given twopence for every shilling they
+save. When these cards bear stamps up to the value of 15/6 they are
+exchanged for War Savings Certificates.
+
+No field has been more fruitful than the public schools where the thrift
+seed has been planted early. In hundreds of public educational
+institutions Savings Clubs have been formed to buy Certificates. In
+Huntingdonshire, where there were less than 150 pupils, more than $35.00
+was subscribed in a single morning. At Grimsby a successful trawler
+owner gave $5,000 to the local teachers' association to help the War
+Savings crusade. A shilling has been placed to the credit of every child
+who undertakes to save up for a War Savings Certificate, the child's
+payments being made in any sum from a penny up. Ninety-five per cent of
+the children in the town have begun to save. Similarly, a councillor of
+Colwyn Bay has offered to pay one shilling on each Certificate bought by
+the scholars of one of the town's schools, and also offered to add fifty
+per cent to all sums paid into the school savings bank during one
+particular week, provided that the money was used to purchase War
+Savings Certificates.
+
+Almost countless schemes have been devised to instil, encourage and
+develop the thrift idea. In certain districts, patriotic women make
+house to house canvasses to collect the instalments for the
+Certificates. They become living Thrift Reminders. Tenants of model
+flats and dwelling houses pay weekly or monthly War Savings Certificates
+at the same time they pay their rent.
+
+That this economy and savings idea has gone home to high and low was
+proved by an incident that happened while I was in London. A man
+appeared before a certain well-known judge to ask for payment out of a
+sum of money that stood to his credit for compensation to "buy clothes."
+The judge reprimanded him sharply, saying, "Are you not aware that one
+of the principal War Don'ts is, 'Don't buy clothes: wear your old
+ones.'" With this he held up his own sleeve which showed considerable
+signs of wear. Then he added: "If I can afford to wear old garments, you
+can. Your application is dismissed."
+
+With saving has come a spirit of sacrifice as this incident shows: A
+London household comprising father, mother and two children moved into a
+smaller house, thus saving fifty dollars a year. By becoming teetotalers
+they saved another five shillings (one dollar and a quarter) and on
+clothes the same weekly sum. They took no holiday this summer: ate meat
+only three times a week, abstained from sugar in their tea, cut down
+short tramway rides, and the father reduced his smoking allowance. By
+these means they have been able to buy a War Savings Certificate every
+week.
+
+Just as no sum has been too small to save, so is no act too trivial to
+achieve some kind of conservation. People are urged to carry home their
+bundles from shops. This means saving time and labour in delivery and
+permits the automobile or wagon to be used in more important work. I
+could cite many other instances of this kind.
+
+Even the children think and write in terms of economy. At the annual
+meeting of the British Association for the Advancement of Science held
+last summer at Newcastle, an eminent doctor read a paper on "London
+Children's Ideas of How to Help the War." The replies to his questions,
+which were sent to more than a thousand families, all indicated that the
+juvenile mind was thoroughly soaked with the savings idea. Some of the
+answers that he quoted were very humorous. A boy in Kensington gave the
+following reasons:
+
+"Eat less and the soldiers get more: If you make a silly mistake in your
+arithmetic tell your mother not to let you have any jam, and put the
+money saved in the War Loan: Stop climbing lamp-posts and save your
+clothes: Don't wear out your boots by striking sparks on the kerbstones:
+If you buy a pair of boots you are a traitor to your country, because
+the man who makes them may keep a soldier waiting for his: Don't use so
+much soap: Don't buy German-made toys."
+
+The net result of this mobilisation of the forces of thrift is that up
+to January the first 50,000,000 War Certificates had been sold,
+representing an investment of nearly 40,000,000 pounds or approximately
+$200,000,000. The striking feature about this large sum is that it was
+reared with the coppers of working men and women. "Serve by Saving" in
+England has become more than a phrase.
+
+All this was not achieved, however, without the most persistent
+publicity. England to-day is almost one continuous bill board. The
+hoardings which blazed with the appeal for recruits and the War Loan now
+proclaim in word and picture the virtues of saving and the value of the
+now familiar War Certificates. Likewise they embody a spectacular lesson
+in thrift for everybody.
+
+One of the most effective posters is headed "ARE YOU HELPING THE
+GERMANS?" Under this caption is the subscription:
+
+"You are helping the Germans when you use a motor car for pleasure: when
+you buy extravagant clothes: when you employ more servants than you
+need: when you waste coal, electric light or gas: when you eat and drink
+more than is necessary to your health and efficiency.
+
+"Set the right example, free labour for more useful purposes, save money
+and lend it to the Nation and so help your Country."
+
+A gruesome, but none the less striking, poster is entitled: "What is
+the Price of Your Arms?"
+
+Then comes the following dialogue:
+
+Civilian: "How did you lose your arm, my lad?"
+
+Soldier: "Fighting for you, sir."
+
+Civilian: "I'm grateful to you, my lad."
+
+Soldier: "How much are you grateful, sir?"
+
+Civilian: "What do you mean?"
+
+Soldier: "How much money have you lent your Country?"
+
+Civilian: "What has that to do with it?"
+
+Soldier: "A lot. How much is one of your arms worth?"
+
+Civilian: "I'd pay anything rather than lose an arm."
+
+Soldier: "Very well. Put the price of your arm, or as much as you can
+afford, into Exchequer Bonds or War Savings Certificates, and lend your
+money to your Country."
+
+Still another is entitled "BAD FORM IN DRESS" and reads:
+
+"The National Organising Committee for War Savings appeals against
+extravagance in women's dress.
+
+"Many women have already recognised that elaboration and variety in
+dress are bad form in the present crisis, but there is still a large
+section of the community, both amongst the rich and amongst the less
+well to do, who appear to make little or no difference in their habits.
+
+"New clothes should only be bought when absolutely necessary and these
+should be durable and suitable for all occasions. Luxurious forms, for
+example, of hats, boots, shoes, stockings, gloves, and veils should be
+avoided.
+
+"It is essential, not only that money should be saved, but that labour
+employed in the clothing trades should be set free."
+
+Harnessed to the Saving and Investment Campaign is a definite and
+organised crusade against drink, ancient curse of the British worker,
+male and female. It is really part of the movement instituted by the
+Government at the beginning of the war to curtail liquor consumption.
+One phase is devoted to Anti-Treating, which makes it impossible to buy
+any one a drink in England. This was followed by a drastic restriction
+of drinking hours in all public places where alcohol is served. Liquors
+may only be obtained now between the hours of 12 noon and 2:30 in the
+afternoon and from 6 to 9:30 at night. As a matter of fact, the only
+tipple that you can get at supper after the play, even in the smartest
+London hotels, is a fruit cup, which is a highly sterilised concoction.
+
+The War Savings Committee has borne down hard on the drinking evil and
+England's enormous yearly outlay for liquor--nearly a billion
+dollars--is used as a telling argument for thrift. A poster and a
+pamphlet that you see on all sides is headed, "THE NATION'S DRINK BILL,"
+and reads:
+
+"The National War Savings Committee calls attention to the fact that the
+sum now being spent by the Nation on alcoholic liquors is estimated at
+
+
+                      Ł182,000,000 a year.
+
+
+"And appeals earnestly for an immediate and substantial reduction of
+this expenditure in view of the urgent and increasing need for economy
+in all departments of the Nation's life.
+
+"Obviously, in the present national emergency a daily expenditure of
+practically Ł500,000 on spirits, wine and beer cannot be justified on
+the ground of necessity. This expenditure, therefore, like every other
+form and degree of expenditure beyond what is required to maintain
+health and efficiency is directly injurious to national interests.
+
+"Much of the money spent on alcohol could be saved. Even more important
+would be (1) the saving for more useful purposes of large quantities of
+barley, rice, maize and sugar; and (2) the setting free of much labour
+urgently needed to meet the requirements of the Navy and the Army.
+
+"To do without everything not essential to health and efficiency while
+the war lasts is the truest patriotism."
+
+Under the silent but none the less convincing plea of these posters,
+backed up by millions of leaflets and booklets explaining every phase of
+the Savings Campaign, the sale of Certificates rose steadily. From
+906,000 in May they jumped to nearly 3,000,000 in June. But this was not
+enough. "Let us make one big smash and see what happens," said the
+Committee. Thereupon came the idea for a War Savings Week, which was to
+be a notable rallying of all the Forces of Thrift and Saving.
+
+No grand assault on any of the actual battle fronts was worked out with
+greater care or more elaborate attention to detail than this Savings
+Drive. No loophole to register was overlooked. It was planned to begin
+the work on Sunday, July 16th.
+
+First of all, the resources of the Church were mobilised. A Thrift
+sermon was preached that Sunday morning in nearly every religious
+edifice in the Kingdom. Following its rule to leave nothing to chance,
+the War Savings Committee prepared a special book of notes and texts for
+sermons which was sent to Minister, Leaders of Brotherhoods and Men's
+Societies. Texts were suggested and ready-made and ready to deliver
+sermons were included. One of these sermons was called "The Honour of
+the Willing Gift," another was entitled "The Nation and Its Conflict,"
+and its peculiarly appropriate text was "Well is it with the man that
+dealeth graciously and lendeth."
+
+A special address (in words of one syllable) to the children of England
+embodying the virtues of penny saving and showing how these pennies
+could be made to work and earn more pennies, as shown in the concrete
+example of a War Savings Certificate, was read by thousands of Sunday
+school teachers to their classes throughout the nation.
+
+Nearly every human being in Great Britain got the Message of Thrift that
+week. Boy Scouts and Girl Guides went from house to house bearing copies
+of the various kinds of instructive literature that had been prepared
+for the campaign. Typical of the thoroughness of the detail is the fact
+that in Wales all this material was printed in the Welsh language. The
+only country where no special efforts were made was Scotland, where to
+preach thrift is little less than an insult.
+
+For seven days and nights the almost incessant onslaught was kept up.
+When the smoke cleared and the count was taken, it was found that
+3,000,000 Certificates had been sold during the week while the total for
+the month was 10,700,000.
+
+So vividly was the phrase "War Savings Week" driven home that the War
+Savings Committee decided instantly to capitalise this new asset. In a
+few days hundreds of bill boards and fences throughout the Kingdom
+blossomed forth with this sentence, painted in red, white and blue
+letters: "Make Every Week National War Savings Week."
+
+Not content with splashing the bill boards with the injunction to save,
+the National Committee hit upon what came to be the most popular medium
+for disseminating the Gospel of Thrift. It enlisted the movies. A film
+called "For the Empire" was made by a number of well known motion
+picture actors and actresses who gave their services free of charge.
+
+It was a moving and graphic story of the war showing how a certain
+English lad volunteers at the outset and goes to the front. You get a
+vivid picture of life in the trenches shown in actual war scenes. Then
+you see the young soldier fall while gallantly leading a charge: his
+body is brought home and he is buried with military honours. Then the
+screens hurls the question at the audience: "This man has died for his
+Country. What are you doing for the Nation in its hour of trial?" Now
+follows a vivid lesson in how to save and buy a War Savings
+Certificate. This film has been shown in 2500 cinema theatres up to the
+first of the year and was booked to be shown in 1000 more within the
+next few months.
+
+So widespread has the Thrift movement become that the War Savings
+Committee now publishes its own monthly magazine called _War Savings_.
+The first issue appeared on September first and included such timely
+articles as "The Might of a Mite," a lesson in penny building: "The
+Final Mobilisation," which showed how the last Ł100,000,000 would win
+the war: a third article explained the Economy Exhibition now being held
+all over Great Britain as part of the Thrift crusade. There was also an
+article on the War Saving movement by Reginald McKenna, Chancellor of
+the Exchequer, and a very illuminating appeal, "Every Household Must
+Help Win the War."
+
+This leads to one of the most instructive branches of the whole
+campaign, the one devoted to the elimination of waste in the household.
+Under the direction of the Patriotic Food League a voluminous and
+helpful literature has been prepared and distributed. One booklet
+devoted to "Waste in the Well-to-do Household" shows how gas, coal and
+electric light bills, and the whole cost of living can be reduced.
+Another called "Household Economies" has helpful hints for mistress and
+maid: a third is "The Best Foods in War-Time." A stirring plea was made
+to every household in the shape of a card surmounted by a picture of
+Lord Kitchener and containing his famous warning to the English people:
+"Either the civilian population must go short of many things to which it
+is accustomed in times of peace, or our armies must go short of
+munitions and other things indispensable to them." Below this quotation
+was the stirring question:
+
+"Which is it to be: economy in the household or shortage in the Army and
+Navy?"
+
+Under the title of "War Savings in the Home" a plan of campaign has been
+sent to every household in England for operation during the whole period
+of war. Among other things it urges every family to give up meat for at
+least one day in the week, and in any case to use it only once a day.
+Margarine is recommended instead of butter. Home baking is strenuously
+suggested. It is shown how reduction in personal and household
+expenditure can be effected, for example, in the laundry by using
+curtains and linen that can be washed in the house. A special appeal to
+dispense with starched and ornamental lingerie is made. In these and
+many other ways the style of living is simplified so that the amount of
+domestic service in every home is greatly cut down and much labour set
+free for war work and general production.
+
+Indeed, no phase of Life or Work has escaped the Search-Light of the
+benevolent Inquisition which has wrought Conservation out of Waste.
+
+It has a larger significance than merely changing habits and converting
+pounds and pence into guns and shells. It means that England is creating
+a Sovereignty of Small Investors, thus setting up the safeguard that is
+the salvation of any land. The War Savings Certificate will have a
+successor in the shape of a more permanent but equally stable Government
+bond.
+
+When all is said and done you find that huge reservoirs of Savings at
+work form a country's real bulwark. Through investment in small,
+accessible, and marketable securities a people become independent and
+therefore more efficient and productive. It mobilises money.
+
+Behind all the spectacular publicity that has swept hundreds of millions
+of British shillings into safe and profitable employment is a Lesson of
+Preparedness that America may well heed. It means a form of National
+Service that is just as vital to the general welfare as physical
+training for actual conflict. A nation trained to save is a nation
+equipped to meet the shock of economic crisis which is more potent than
+the attack of armed forces.
+
+What does it all mean? Simply this: no man can touch the English thrift
+campaign without seeing in it another evidence of a great nation's grim
+determination to win, whatever the sacrifice.
+
+The British people at home have come to realise that by personal economy
+and denial they can serve their country and their cause just as
+effectively as those who fight amid the blare of battle abroad. They are
+animated by a New Patriotism that is both practical and self-effacing.
+It is giving the Englishman generally a higher sense of public devotion:
+it is making him a better and more productive human unit: it is
+equipping the nation to meet the drastic economic ordeal of to-morrow.
+
+If this lesson of conservation is heeded after the war and becomes a
+feature of the permanent British life, then the Great Conflict will
+almost have been worth its dreadful cost in blood and treasure. He who
+saves now will not have saved in vain.
+
+
+
+
+VI--_The Price of Glory_
+
+
+When John Jones of the U.S.A. puts his thousand dollars into an English,
+French, Russian or German bond he becomes part and parcel of the
+mightiest financial structure ever dedicated to a single purpose. He
+cannot tell how his funds will be used. They may buy a few hundred
+shells, clothe a thousand soldiers, feed a battalion or build a trench.
+All he knows is that his mite joins the continuous and colossal stream
+of expense that makes up the Red Wage of War.
+
+Now if John Jones employs his money in the stock or bond of a railroad,
+corporation, or public utility enterprise he can find out almost
+precisely what it does, for it lays down a track, provides new equipment
+or builds a power house. The investment, in short, represents something
+that produces more wealth.
+
+War, on the other hand, is a gigantic engine of destruction. Instead of
+building up, it tears down. It is a monster machine consecrated to
+waste. The only possible dividend can be peace.
+
+The cost of the European conflict has a deeper interest for us than mere
+curiosity over staggering statistics. The reason is that we have joined
+the Paymaster's Corps. In other words, we have backed up our sympathy
+with cash. We are silent partners in the costliest and deadliest of all
+businesses.
+
+Up to the present stupendous struggle and with the exception of the
+Russo-Japanese War in which we floated several issues for the little
+yellow men, we have had no definite economic part in the wars that shook
+other nations. The losses in money and in men fell on the combatants.
+
+This war, which has shattered so many precedents, has drawn the United
+States out of its one-time aloofness. To the dignity of World Trader we
+have added the twin distinction of World Banker. Already we have poured
+out practically two billions of dollars for securities and credits of
+the warring countries. To this must be added an even greater sum
+representing our enormous war exports. The price, therefore, of whatever
+freedom emerges from these years of bloodshed intimately touches
+thousands of American pocketbooks in one way or another.
+
+What is the final toll that Battle will take: more important than this,
+what is the future of the treasure that we have laid on its Consuming
+Altar?
+
+Before making any analysis of the American stake in the cost of the
+European War, it is important to find out first just how much money has
+been expended and what the likelihood of future outlay will be. Like
+every other phase of the stupendous upheaval this one is both
+speculative and problematical.
+
+To deal with these European War figures is to flirt with Titanic
+Numerals. They are more the Playthings of the Gods than matters for mere
+mortals to juggle with.
+
+Up to the first of January, 1917, the total military expenses of both
+sides had reached approximately $61,000,000,000. It is only when you
+reduce this enormous sum to terms that every man and woman can
+understand that you begin to get some idea of the amazing cost of
+conflict.
+
+The amount of money expended for direct war purposes alone since August
+1, 1914, is equal to three times the par value capitalization of all
+the American railroads. It represents fifty times the net national debt
+of the United States: eighteen times the amount of money in actual
+circulation in this country: and eleven times the total deposits in all
+our savings banks. With it you could build 146 Panama Canals or pay for
+the Napoleonic, Crimean, Russo-Japanese, South African and American
+Civil Wars and still have a surplus of $34,000,000,000 left. Such is the
+New and High Cost of War!
+
+The price of glory is being constantly advanced. The expenditures for
+the first year of the war were $17,500,000,000: for the second they had
+increased to $28,000,000,000: the estimate for the third year, to end
+August 1, 1917, at the present rate of spending is about
+$33,000,000,000. This means that by the time the next harvest moon
+shines (and no man in Europe to-day doubts that it will gleam on
+carnage), the war will have represented a sacrifice for military
+purposes alone of $78,500,000,000.
+
+Taking the daily cost of the war you find that England is $25,000,000
+poorer for every twenty-four hours that pass: that France must check
+out $20,000,000: Russia $16,000,000: Italy $5,000,000. Little Roumania
+is cutting her war expenditure teeth at the rate of $1,000,000 per diem.
+
+Cross the frontier (for war expense is no respecter of cause or creed),
+and Germany is "discovered," as they say in play-books, spending
+$17,500,000 every day: Austria, Turkey and Bulgaria, $11,000,000. Thus
+between sunrises that break over these warring hosts very nearly
+$100,000,000 has gone up in smoke, splinters or ruin of some kind, or
+the upkeep of fighting.
+
+Since England's cost each day is heavier than any of the other countries
+at war, due to the fact that she is Financial First Aid to most of her
+Allies and is maintaining a fleet almost equal to all the others
+combined, let us reduce her enormous daily war bill of $25,000,000 to
+simpler form. It means that participation in the greatest of all wars is
+costing her $1,410,666 an hour, $17,361 a minute and a little over $289
+a second. At this rate of waste John D. Rockefeller would be bankrupt in
+forty days; Andrew Carnegie would be in the bread line in ten. The sum
+is greater than the entire net public debt of Chicago; it equals the
+assessed valuation of all the taxable property in Poughkeepsie, New
+York.
+
+Work out this immense daily outlay from still another angle and these
+striking facts develop: the war is costing at the rate of 29 cents a day
+for every inhabitant of the United Kingdom: 31 cents for every
+individual in France: 22 cents for every person in the Kaiser's domain,
+and 6 cents for each human unit in the Russian Empire.
+
+Yet this well-nigh overwhelming rush of figures only accounts for the
+actual cost of hostilities. By this I mean arms and armament, food and
+military supplies, the construction, maintenance and renewal of fleets,
+the cost of transport and the pay of soldiers and sailors.
+
+To the vast sum already recorded must be added the loss registered by
+the destruction of cities, towns and villages, the sinking of ships, the
+wiping out of factories, warehouses, bridges, roads and railways.
+
+Then, too, you must allow for the almost incalculable productive loss
+due to the killing and maiming of millions of men: the shrinkage of
+agricultural yields and the more or less general dislocation of the
+machinery of output. All these factors pile up a total, the calculation
+of which would almost cause a compound fracture of the brain. Sufficient
+to say it puts a terrific human and financial tax on coming generations
+and we in America will feel its effects when the world begins to
+readjust itself to the altered social and economic conditions which will
+come with peace.
+
+Of course the inevitable question arises: Who is paying the Scarlet
+Piper? In seeking the answer you encounter for the first time America's
+intimate and all-important part in the costly drama now being unfolded
+to the tune of billions. She sits in the armoured box-office with the
+Treasurers of the embattled nations.
+
+At the outset of the war all the belligerent countries believed that
+they could finance their needs without seeking neutral aid. Less than a
+year was enough to dispel this delusion. Although England and France
+immediately voted immense credits they were not long in finding out that
+they must back up their unprecedented mobilisation of resources with
+outside help. They came to us.
+
+When the great Anglo-French loan of $500,000,000 was first discussed as
+a possible American financial feat, people over here began to wonder why
+Great Britain and France, whose combined wealth exceeds that of all the
+other nations at war, should want overseas assistance. Since the reason
+for this loan as well as the disposition of proceeds are practically the
+same as that of most of the other Allied issues in this country in which
+thousands of our investors have participated, it is well worth
+explaining because it also carries with it a lesson in international
+barter. Here it is:
+
+Before the war our foreign trade was growing fast. England and France,
+in particular, were good customers for our wheat and other foodstuffs,
+iron and cotton manufactures, oil and automobiles. In exchange we
+imported the product of many European factories.
+
+Business relations between nations are not settled like transactions
+between individuals and firms, that is, with checks or cash. They are
+settled by balances. England's imports from the United States, for
+example, are paid by her exports to us. Usually exports and imports so
+nearly balance that the difference is paid by gold or with the temporary
+use of bank credit. Therefore it is not a question of actual money but
+of exchange and this foreign exchange is a commodity whose value
+fluctuates with supply and demand.
+
+Along came the war. Millions of artisans in France and England were
+withdrawn from lathe and loom to fight in the battle line. What workers
+remained at their posts had to produce war supplies. Yet civilian and
+soldier needed food, clothing and arms. The demand for our products
+increased and the United States suddenly became the work-shop and the
+granary of the world.
+
+The Allies, in control of the seas, became our principal foreign
+customers. American exports soared: those of France and England declined
+correspondingly. A huge balance of trade--the biggest in our
+history--swung to our favour.
+
+This balance of trade had to be settled, but on an abnormal basis. What
+was ordinarily a comparatively trivial matter of a few millions
+suddenly became an item of many millions and it was all owed on one
+side. The demand for exchange on New York greatly exceeded the supply
+and the inevitable dislocation happened. England and France had to pay a
+drastic premium on the American dollar. The English pound, normally
+rated $4.86, dropped to $4.50; the franc, ordinarily worth 19.29 cents,
+fell to 16.94 cents. This shrinkage in values was not due to any
+impairment of the resource or wealth of the Allies but because the
+machinery of international payment works automatically and
+unsentimentally.
+
+Here was a crisis that without aid from us might have eventually cost us
+dear. Rather than submit to the terrific drain on the exchange value of
+the pound and franc, England and France could have set about emulating
+the example of Germany and become self-sufficient. It was not a month's
+work or even a year's work, but ultimately it would have made these
+countries more independent of the United States after the war is over.
+
+Of course England and France could have met the situation by shipping
+gold. Each had a large reserve but the United States had all the gold it
+wanted, and still has. Besides, in such an emergency gold is an inert
+and unproductive commodity.
+
+Again, the Allies might have "dumped" their American securities
+representing an investment of over three billions of dollars, which
+would have upset the American stock market and sent prices down. Either
+one of these performances would have done us no good.
+
+It was important, therefore, for the benefit of all interest involved,
+that the Allies establish a credit in the United States that would
+enable them to buy freely and remove the costly handicap on American
+exchange. In a word, instead of having to pay their bills through an
+intricate mechanism that rose and fell with the tides of trade and put a
+premium on trading with us, a medium was needed that would restore the
+whole economic trade balance. It was as essential to us as to our
+customers.
+
+Hence the Anglo-French Five Hundred Million Dollar Loan was floated and
+Uncle Sam became a war banker. This loan, however, was nothing more or
+less than the setting up of a credit of half a billion dollars for
+England and France in the United States. To put it in another way, it is
+just as if the two Allies had deposited this sum in an American bank and
+then drew checks against it for goods and raw materials made or mined in
+America. In a word, we lent to ourselves.
+
+Put out at a time when money was scarce, the loan would have been
+unpatriotic and uneconomic. But our banks were filled with idle cash:
+everywhere capital sought safe and profitable employment. Now you begin
+to see why these allied loans are really good business in more ways than
+one.
+
+What is our financial stake in the cost of the war: what does it yield:
+how is it safeguarded?
+
+Clearly to understand this whole situation you must know just how these
+foreign bonds are put out. There are two kinds. One is the internal loan
+issued in the money of the country whose name it bears. This means that
+if it is a French bond it is in terms of francs: if English it calls for
+payment in pounds sterling: if Russian, in roubles: if German, in
+marks. An external loan, on the other hand, is issued in the money of
+the country in which it is floated. The Anglo-French loan is an example
+of this kind because both principal and interest are to be paid in
+United States gold coin. These internal and external loans may be direct
+obligations of the issuing governments or may be secured by collateral.
+
+There is still a third medium for the employment of American money in
+the war. Technically it is known as bank credit. Through this agency,
+foreign firms make deposits of money or collateral in the national banks
+of their respective countries and purchase goods in America through
+credits thus established for them in a group of New York banks or trust
+companies. The acceptances for the goods thus bought become negotiable
+documents and are bought and sold by institutions and investors at a
+discount.
+
+This evidence of debt is not the kind of foreign investment suitable for
+the man or woman with savings to employ because it is more or less a
+banking transaction. These credits usually net about 6˝ per cent.
+
+With the exception of a comparatively small amount of German and
+Austrian Bonds bought in the main by natives of these two countries for
+purely sentimental and patriotic reasons, the entire bulk of European
+loans placed in America is for the Allied countries, principally England
+and France who are our heaviest customers in trade.
+
+The largest foreign loan brought out here so far is the Anglo-French 5
+per cent External Loan which was negotiated through J. P. Morgan &
+Company--Fiscal Agents for the Allies over here--by the Commission
+headed by Lord Reading and Sir Edward Holden. It is the Joint and
+Several Obligation of the Governments of the United Kingdom of Great
+Britain and Ireland and the French Republic, is dated October 15, 1915,
+and is due five years after that date. It ranks first amongst the
+foreign war obligations of these countries.
+
+This was the first big credit arranged by England or France in the
+United States and the proceeds were used, in the manner that I have
+already described, for the purchase of American goods and to stabilize
+the foreign exchange. These bonds which have had a very wide sale in
+America were brought out at 98 and interest and at the time of issue
+represented an investment that paid nearly 5˝ per cent.
+
+These bonds, I might add, are convertible at the option of the holder on
+any date not later than April 15, 1920, or provided that notice is given
+not later than this date, par for par, into 15-25 Year Joint and Several
+4˝ per cent bonds of the Governments of the United Kingdom of Great
+Britain and Ireland and the French Republic. Such 4˝ per cent bonds,
+payable, principal and interest, in United States gold coin, in New York
+City, and free from deduction for any present or future British or
+French taxes, will mature October 15, 1940, but will be redeemable, at
+par and accrued interest, in whole or in part, on any interest date not
+earlier than October 15, 1930, upon three months' notice.
+
+The equity behind these bonds is the good name, wealth and taxing power
+of the issuing countries. The interest on this loan equals only
+one-fifth of one per cent of the total estimated income of the British
+people in 1914. It is slightly more than one-third of one per cent of
+the French Republic in 1914.
+
+Between this loan and the next large borrowing by England or France in
+the United States occurred an event of significance to the American
+investor interested in the securities of foreign nations. The
+Anglo-French loan, as you know, was simply the promise to pay of two
+great countries whose Government Bonds at home represented the last word
+in unshakable security.
+
+But when England and France stepped up to our money counters again,
+Uncle Sam put sentiment aside and became a pawn broker. "I think you are
+all right," he said, "but you are in a war that may last a very long
+time and I must have collateral."
+
+To English pride this was a terrific jolt. I happened to be in England
+at the time and I recall the astonishment of no less a distinguished
+individual than the Chancellor of the British Exchequer. It was
+unbelievable that any nation could demand greater security than the
+good name of the Empire. "If the elder J. P. Morgan were alive this would
+never have happened," said the London bankers. They knew that the
+Grizzled Old Lion of American Finance always held that character was the
+best collateral. In the war emergency, however, many American bankers
+thought to the contrary and the net result was that with all external
+loans thereafter England and France have been forced to dig into their
+strong boxes and do what any individual does when he borrows money--put
+up a good margin of security.
+
+An illustration of this secured obligation of the British Government is
+the issue of $300,000,000 Five and a Half Per Cent Gold Notes dated
+November 1, 1916. Principal and interest are payable without deduction
+of any English tax in New York and in United States gold coin. The
+holder of these notes, however, has the option to get his money in
+London but at a fixed rate of $4.86 per pound sterling, the normal value
+of the pound in peace time. Since the pound sterling at the time this
+article is written is quoted at $4.76, this is a decided advantage.
+
+The new English loan is secured by stocks and bonds whose total market
+value is not less than $360,000,000. One group of this collateral
+consists of stocks, bonds and other obligations of American corporations
+and the obligation, either as maker or guarantor, of the Government of
+the Dominion of Canada, the Colony of Newfoundland and Canadian
+Provinces and Municipalities. The second group included obligations of
+Australia, Union of South Africa, New Zealand, Argentina, Chili, Cuba,
+Japan, Egypt, India and a group of English Railway Companies. I
+enumerate this collateral to show the inroads upon British securities
+that increasing war cost is making. This collateral must always show a
+market value margin of twenty per cent above the amount of the loan. It
+means that should there be any slump the English Government must supply
+additional security.
+
+This issue was brought out in two forms. Half of the loan is in Three
+Year Notes due November 1, 1919, which were issued at 99Ľ and interest
+and yielding over 5.75 per cent: the other half is in FiveĽ Year Notes
+due November 1, 1921, brought out at 98˝ and interest and yielding about
+5.85 per cent. These Notes are redeemable at the option of the
+Government at various interest dates between 1917 and 1920 at prices
+ranging from 101 to 105 and interest.
+
+Having established the precedent of a secured loan, all succeeding
+English issues in this country have been backed up with ample
+collateral. These bonds have a ready market, an important detail that
+the investor must not overlook in purchasing foreign securities.
+
+Now turn to the borrowings of France in the United States. With this
+great nation, whose middle name is Thrift, Uncle Sam was no respecter of
+past performance. For the one separate French external loan he exacted
+his pound of collateral. As a matter of fact it amounted to nearly a
+ton.
+
+I refer to the issue of $100,000,000 Three Year Five Per Cent Gold Notes
+bearing the date of August 1, 1916. To float this loan the American
+Foreign Securities Company was formed which arranged to lend the French
+Government $100,000,000. As security the Company--it was merely a group
+of American bankers, required France to deposit stocks and bonds having
+a value at prevailing market and exchange rate of $120,000,000. Should
+the value of these securities fall below this sum they must be
+replenished until there is a margin of twenty per cent in excess of the
+principal of the loan.
+
+These securities throw an interesting sidelight upon the resource of the
+French Republic and its ability to borrow desirable collateral from
+patriotic citizens. They include obligations of the Government of
+Argentine, Sweden, Norway, Denmark, Switzerland, Holland, Uruguay,
+Egypt, Brazil, Spain, and Quebec. The most picturesque parcel in the lot
+is $11,000,000 in Suez Canal shares. This stock is one of the corporate
+heirlooms of France and is very closely held. It not only pays a large
+dividend but shares in the profits of the company which in peace times
+are big. The fact that France should put these prize securities in
+"hock" is evidence of her determination to keep her credit absolutely
+above reproach.
+
+The Three Year French Notes were brought out at 98 and interest and at
+the time of issue yielded about 5.73 per cent.
+
+But all direct French borrowing in America has not been on the pound of
+flesh basis. For now we come to what might well be called The Loan of
+Sentiment. It is the $50,000,000 City of Paris Five Year Six Per Cent
+Gold Bond Issue dated October 15, 1916. It gave Americans the
+opportunity to pay a substantial tribute of affectionate gratitude for
+happy hours spent in the Queen City of Europe and have the prospect of a
+desirable dividend at the same time. Here is a piece of foreign
+financing with a distinction and a background all its own. Aside from
+its purely sentimental phase it is perhaps the only loan floated in
+America since the war which is dedicated to construction instead of
+destruction. The proceeds are to be used to reimburse the City of Paris
+for expenditures in building hospitals and making other necessary
+humanitarian improvements and to provide a sinking fund to meet similar
+disbursements. Amid the incessant hate and passion of war it is
+pleasant to find this back water of cooling relief.
+
+Like most of the foreign issues made during the war it follows the
+highly intelligent European practice of putting out loans in small
+denominations so as to be within the reach of the great mass of the
+people. These bonds may be had in multiples of $100 and upward. The
+Government of France has agreed to permit the exportation of sufficient
+gold to permit the payment of principal and interest in the yellow metal
+in New York. The loan--the only external one of the City of Paris--was
+brought out at 98ľ and interest, which would make an investment of
+6.30 per cent. In addition to this yield as an investment there is the
+possibility of profit in exchange in view of the option to collect
+principal and interest at the rate of 5.50 francs per dollar instead of
+the normal rate of exchange before the war.
+
+This statement of possible exchange profits leads us to one of the
+conspicuous features of the latest National French Loan, which although
+internal in form has been put within the ken of the American investor.
+
+Fully to comprehend it you must know that in ordinary times a dollar in
+American money is worth 5.18 francs. On account of the dislocation in
+foreign exchange the value of a dollar in French money has risen to
+approximately 5.85 francs. Therefore when you buy a French security in
+terms of francs for American dollars you get a great deal more for your
+money than you would have received before the war. Hence the possibility
+of profit when francs return to normal is large.
+
+The National French Loan was sold to American investors at an exchange
+rate of 5.90, which means that every dollar you employ gives you a
+principal of 5.90 francs. On this basis the price for the security
+issued at a par of 100 would be 87˝, which would make the direct
+yield over 5.70 per cent. Should exchange return to normal, the
+subscription price would be equivalent to 75˝, which would make the
+direct yield over 6-5/8 per cent.
+
+Translating this loan into terms of money, you find that for every
+$14.83 you invest you get 100 francs capital: for every $148.30 you get
+1000 francs capital: for $741.52 you receive 5000 francs capital. If
+French exchange should return to normal and the securities sell at the
+issue price--87˝--the investor would receive $16.89 for every 100 francs
+of capital: $168.88 for every 1000 francs: $844.39 for every 5000
+francs. On this basis without regard to income return the holder of 5000
+francs capital would receive a profit of $103.94 or over 13.75 per cent
+on his investment.
+
+Should the market price of the issue advance to 100 and exchange return
+to normal the investor would get $19.30 for every 100 francs capital;
+$193.00 for every 1000 francs capital; $965.00 for every 5000 francs
+capital. In this case and again without regard to income return, the
+holder of 5000 francs capital would receive a net profit of $223.50 or
+approximately 30 per cent.
+
+This loan is issued in _Rentes_ and in denominations of 100 francs and
+multiples. _Rentes_ is the form in which all French Government issues
+are brought out at home. The word means interest or income. The French
+always refer to their Government Bonds in terms of interest without any
+mention of principal. This is because _rentes_ are supposed to be
+perpetual. The new French loan just explained is not redeemable or
+convertible before 1931.
+
+Usually there is no limit to these National French loans. To be in
+France during the war and see the popular response to the appeal for
+funds is to have a thrilling experience in the practical side of
+patriotism.
+
+I chanced to be in Paris when one of these loans was launched.
+Throughout a day of driving rain thousands of people stood in line at
+the post offices and private institutions waiting for a chance to put
+their money out to work for their country. The French wage worker, be he
+artisan or street cleaner, needed no coaching in the art of employing
+his funds safely and profitably. Just as saving is instinct with him, so
+is the putting of these savings out to work in a Government bond second
+nature. He is the thriftiest and most cautious investor in the world. He
+has established a close and confidential relation with his banker such
+as exists in no other nation. Therefore when the French financier offers
+him Government Bonds or "Loans of Victory" as the war issues are
+emotionally termed, he does not hesitate. He knows it is all right.
+
+Alluring as is the possibility of profit in the new French Rente at the
+present abnormal exchange basis, it fades before the prospects for
+similar profit that lie in some of the Russian Government Bonds
+available in the United States. The Imperial Russian Internal Five and a
+Half Per Cent Loan of 1916 amounting to 2,000,000,000 roubles will
+illustrate.
+
+Ordinarily the Russian rouble is worth 51.45 cents in American money. It
+has gone down to 32 cents. At this rate of exchange a thousand rouble
+bond bearing interest at 5˝ per cent would only cost $320.00. Based on
+the normal value of the rouble this bond would be worth $514.60 or
+$194.60 above the present price of the bond--an increase of about 60.8
+per cent on the investment. Figuring roubles at the normal rate of
+exchange the yearly yield would be $28.28 or 8.8 per cent on the
+investment.
+
+The fact that roubles are down so low is evidence that Russian credit at
+the moment is not as high as it might be. The principal equity behind
+this bond, as well as most other Russian securities available in
+America, is the fact that Russia has immense post-war possibilities. She
+will emerge from the conflict like a giant awakened and with the first
+realisation of her enormous undeveloped resources. To offset this,
+however, is the lack of stability of Russian Government as compared with
+the other Allies which makes all Russian Bonds speculative.
+
+On account of the difficulty in shipping bonds and the preponderance of
+pro-Ally sentiment here, there has been a comparatively small market for
+German and Austrian war issues in the United States. Yet, in the face of
+these handicaps, a considerable market has developed. It is due to two
+definite reasons. One is the desire of the native born and transplanted
+Teuton to help his country. Many of them appear at the German banks with
+their savings books eager and ready to make financial sacrifice for the
+Fatherland. The other reason is that the German mark has so greatly
+depreciated (it has gone down from 23.82 cents to 17.65 cents) that
+should it ever come back to anything like normal and the Government
+does not repudiate its issues the investment will be very profitable.
+
+Here is the way it works out: in ordinary times a 4000 mark bond which
+would be the equivalent of a $1000 American piece, costs about $960. At
+the present low rate of exchange the same German bond costs $690.00 in
+American money and therefore shows a profit on the exchange basis alone
+of $270.00 or over 28 per cent. Austrian Bonds show even a larger
+profit.
+
+Summarise our war lending and you get a total of all loans to
+belligerent Governments since the outbreak of the war that aggregate
+$1,828,600,000, which is nearly one-third of the whole cost of the Civil
+War. Add to this our loans of $185,000,000 to Canadian Provinces and
+Cities and $8,200,000 to the City of Dublin and to the City of London
+for water works improvements, a grand total of $2,075,800,000 is rolled
+up. Of this sum $156,400,000 in obligations have matured and been paid
+off, which leaves a net debt to us of $1,919,400,000. It divides up as
+follows:
+
+
+            Great Britain                          $858,400,000
+            France                                  656,200,000
+            Russia                                  167,200,000
+            Italy                                    25,000,000
+            Dominion of Canada                      120,000,000
+            Canadian Provinces and Municipalities   185,000,000
+            Germany                                  20,000,000
+
+
+Having taken this financial plunge into European financial waters, Uncle
+Sam has got the foreign lending habit and has loaned $117,000,000 to
+Latin-America, mainly to Argentina and Chili: $39,000,000 to neutral
+European nations, including Switzerland, Norway, Greece and Sweden. Not
+desiring to play any race favourites, he has speeded China on her way to
+enlightenment to the extent of $4,000,000.
+
+In buying foreign war bonds--a procedure which in war time naturally
+involves sentiment--it is wise for the investor to watch his step.
+Patriotism is all right in its place but unless you can afford to
+contribute money for purely emotional reasons, a cold business estimate
+of the situation is advisable. This applies especially to the man or
+woman with savings who cannot afford to take chances. He or she will
+find it a good rule to stick to external bonds except under exceptional
+conditions.
+
+One objection to the average internal bond is that with the exception of
+England the native money has greatly depreciated in international value.
+Of course, if all these countries finally get back to their old
+standards of wealth, these investments will yield a very large profit.
+To reap this benefit, however, it will be necessary to hold the
+securities for a considerable period because it will take the warring
+countries a long time to "come back." Another fact in connection with
+internal bonds well worth remembering is that while belligerent
+countries will scrupulously respect their obligations held by a great
+neutral like the United States whose good will and resources will be
+very necessary after the close of hostilities, there is the possibility,
+remote though it may be, that repudiation of home issues may come in the
+shock of readjustment.
+
+In a word, in purchasing a foreign war bond be sure to get a stable
+national name, accumulated wealth, habits of thrift, an ample taxing
+power, and a good conversion basis behind the security.
+
+Amid all our war lending lurks a menace to future and necessary American
+financing. In flush times like these it is comparatively easy for us to
+spare large sums of money, because such capital is available and not
+missed at home. If there was the absolute certainty that all the foreign
+short term loans would be paid on maturity there would be no reason to
+show the red light.
+
+But any man who knows anything about the European financial situation
+also knows that it will be extremely difficult, almost impossible, for
+the fighting nations to meet their obligations within the time
+specified. This does not mean that they will be unable to pay. It does
+mean, however, that the inroads of the war will have been so terrific
+that pressing needs will so continue to pile up that renewals must be
+sought. Thus our money will still be tied up.
+
+What will happen at home? Simply this. American enterprise which will
+need capital for expansion may have to wait. In discussing this matter
+one of the best known American bankers said this to me the other day:
+
+"If America had a benevolent despot I believe that he ought to set
+aside an arbitrary sum which would represent the limit that we as a
+nation could lend each year to foreign countries."
+
+There is still another hardship in this outward flow of our capital. It
+lies in the fact that the very attractive terms of the war loans have
+made it very difficult for American railroads and corporations to
+finance their needs. They must pay more for their requirements than ever
+before.
+
+Yet this war financing has done more for us than merely provide an
+opportunity for the profitable employment of hundreds of millions of
+dollars. It has brought back home about $1,500,000,000 of our
+securities, mostly in railroad, that were held abroad. This has not only
+meant a considerable cutting down in the sum that we formerly had to
+send to Europe in interest and dividends, but it has helped to make us
+more economically independent. There is still $1,780,000,000 of our
+securities held abroad, and if the war keeps on much longer a great
+portion of it is likely to come back.
+
+There were two good reasons for this liquidation. One was that the
+holder of the American security in England is subject to a very high
+tax in addition to the normal income tax on large fortunes. Another was
+the necessity for the mobilisation of American securities to become part
+of the collateral offered by the British Government for the loans made
+in this country. In many instances the English owner of American
+securities has simply loaned them to his country as a patriotic act. In
+numerous other cases, however, he has sold them outright and put the
+proceeds into home war issues.
+
+You have seen how our millions have joined that greater stream of
+European billions to meet the rising tide of war cost. How is this vast
+debt to be paid and what is the paying capacity of the nations involved?
+
+In analysing the war debt and its costly hangover for posterity, you
+must remember that not all of it is in actual money. The nations at war
+have not only taxed their economic reserve through the destruction of
+productive capacity in the loss of men and material--as I have already
+pointed out--but have made a costly and well-nigh permanent drain upon
+what might be called their nervous systems.
+
+Look for a moment at the American Civil War whose cost was a mere flea
+bite as compared with the stupendous price of the European
+Conflagration. At the end of that war only half of its reckoning was
+represented in the country's bonded debt. After fifty years we are still
+paying in some way for the other and larger outlay, the invisible strain
+on the country.
+
+Strange as it may seem in the light of the present frightful ravage in
+Europe, no country has ever been completely ravaged by war. When I
+returned from Europe more than a year ago, I was convinced that economic
+exhaustion would be the determining factor: that victory would perch on
+the side of the biggest bank roll. After a second trip to the warring
+lands I am convinced that I was wrong in my first impression.
+Observation again in England and France leads me to believe that man
+power--beef, not gold--will win. The extents to which financial credit
+can be extended in the countries at war seem to be almost without limit.
+
+This leads to the final but all essential detail: How will the European
+nations pay?
+
+Since the Allies practically have a monopoly on the American money sent
+abroad for war purposes, let us briefly look at the equity behind the
+Thing known as National Honour. Its first and foremost bulwark is
+Wealth. Take England first. The wealth of the United Kingdom is
+$90,000,000,000: the annual income of the people $12,000,000,000. To
+this you can add the wealth, resource and income of all her far-flung
+colonies and the immense amount of money due to her from foreign
+countries. Unlike France and save for a few Zeppelin raids, the Empire
+is absolutely free from the ravage of war. The principal assault has
+been upon her income, for her great Principal is still intact.
+
+In examining the methods adopted by England and France to meet the cost
+of the war, you find a sharp difference of procedure which is
+characteristic of the countries. Following the British tradition,
+England is trying to make the war "pay its way" with taxation. Out of a
+total expenditure of $9,500,000,000 for the current year, no less than
+$2,500,000,000 was raised by taxation. The rest was obtained by loans at
+home and abroad.
+
+The income tax alone will serve to show the enormous increase in
+tribute. From .04 per cent on small incomes to 13 per cent on large ones
+before the war it has risen to 1 per cent on small incomes to over 41˝
+per cent on big ones. Again, 60 per cent of all excess profits earned
+since the war are surrendered to the State.
+
+I can give no better evidence of the result of this taxation than to
+repeat what Reginald McKenna, Chancellor of the British Exchequer, said
+to me in London last August:
+
+"The English position is so sound," he declared, "that if the war ended
+at the end of the current financial year, that is, on March the 31st,
+1917, our present scale of taxation would provide not only for the whole
+of our peace expenditures and the interest on the entire National Debt
+but also for a sinking fund calculated to redeem that debt in less than
+forty years. There would still remain a surplus sufficient to allow me
+to wipe out the excess profit tax and to reduce other taxes
+considerably."
+
+When I asked him to make this more specific, he continued:
+
+"The total revenue for the current year is $2,545,000,000. Our last
+Peace Budget was $1,000,000,000. Assuming that the war would end by next
+March 1st, you must add another $590,000,000 for interest and sinking
+fund on the war debt together with a further $100,000,000 for pensions
+which would make the total yearly expenditure for the first year of
+peace $1,690,000,000. Deducting this from the existing taxation you get
+a surplus of $855,000,000. Thus after withdrawing the $430,000,000
+received from the excess profits tax there still remains a margin of
+$425,000,000."
+
+Indeed, to analyze British war finance to-day is to find something
+besides debits and credits and balances. It is a great moral force that
+does not reckon in terms of pounds or pence. There is no thought of
+indemnity to soothe the scars of waste: no dream of conquest to atone
+for friendly land despoiled.
+
+Money grubbing has gone, if only for the moment, along with the other
+baser things that have evaporated in the giant melting pot of the war.
+In England to-day there are only two things, Work and Fight. They are
+giving the nation an economic rebirth: a new idea of the dignity of
+toil: they have begot a spirit of denial that is rearing an impregnable
+rampart of resource.
+
+Even more marvellous is the financial devotion of the French who present
+a spectacle of unselfish sacrifice that merely to touch, as alien, is to
+have a thrilling and unforgettable experience.
+
+When you look into the French method of paying for the war you get the
+really picturesque and human interest details. In place of taxation you
+find that the war is being paid, in the main, out of the savings of the
+people. Instead of mortgaging the future, the Gaul is utilising his
+thrifty past.
+
+Never in all history is there a more impressive or inspiring
+demonstration of the value of thrift as a national asset. It has reared
+the bulwark that will enable France to withstand whatever economic
+attack the war will make.
+
+The difference between the English and French system of war financing
+is psychological as well as material. The average Frenchman has a great
+deal of the peasant in him. He is willing to give his life and his
+honour to the nation but he absolutely draws the line at paying taxes.
+This is why the French have made it a war of loans.
+
+Go up and down the battle line in France and you get startling evidence
+of the French devotion to savings. More than one English officer has
+told me of tearful requests from French peasants for permission to go
+back to their steel-swept and war-torn little farms to dig up the few
+hundreds of francs buried in some corner of field or garden. Equally
+impressive is the sight of farmers--usually old men and women--working
+in the fields while shells shriek overhead and the artillery rumbles
+along dusty highways.
+
+Thus the French war debt will be met because of the almost incredible
+saving power of the French people. It is at once their pride and their
+prosperity. When all is said and done, you discover that with nations as
+with individuals it is not what they make but what they save that makes
+them strong and enduring.
+
+One afternoon last summer I talked in Paris with M. Alexandre Ribot, the
+French Minister of Finance: a stately white-bearded figure of a man who
+looked as if he had just stepped out of a Rembrandt etching. He sat in a
+richly tapestried room in the old Louvre Palace where more than one King
+had danced to merry tune. Now this stately apartment was the nerve
+centre of a marvellous and close-knit structure that represented a real
+financial democracy.
+
+"How long can France stand the financial strain of war?" I asked the
+Minister.
+
+Light flashed in his eyes as he replied:
+
+"So long as the French people know how to save, and this means
+indefinitely."
+
+Although the invader has crossed her threshold, France continues to
+save. Every wife in the Republic who is earning her livelihood while her
+husband is at the front (and nearly every man who can carry a gun is
+fighting or in training), is putting something by. It means the building
+up of a future financial reserve against which the nation can draw for
+war or peace.
+
+One rock of French economic solidity lies in her immense gold supply.
+The per capita amount of gold is $30.02 and is larger than any other
+country in the world. The United States is next with $19.39, after which
+come the United Kingdom with $18.28, and Germany $14.08. Let me add, in
+this connection, that a good deal of the French gold is still in
+stocking and cupboard.
+
+By the end of 1916 the war had cost France $11,000,000,000, which means
+an annual fixed charge of $600,000,000, to which must be added
+$200,000,000 for pensions, making the total fixed burden of
+$800,000,000.
+
+All this cannot be paid out of savings, although in normal times France
+saves exactly $1,000,000,000 a year. But the Government has one big
+trump card up its sleeve. It is the large fortunes of her citizens. They
+have been untouched by the war because practically no income tax has
+been levied.
+
+While the average Frenchman will sacrifice his life rather than submit
+to taxation, the upper and wealthy class will do both. The annual income
+of the people of France is $6,000,000,000. Therefore a 12 per cent tax
+on this income would very nearly produce the entire fixed charge on the
+war debt. France looks into the financial future unafraid.
+
+Financially, Russia ambles along like the Big Bear she typifies. In one
+respect her method of financing the war cost differs distinctly from her
+Allies in the fact that she has received heavy advances from England and
+France. From England alone she borrowed $1,250,000,000 which was
+expended for arms and ammunition and field equipment. The Czar's Empire
+has put out five internal loans while the rest of the money needed has
+been raised out of the sale of short term Treasury Bills, paper money
+issues and tax levies.
+
+Except for the few millions of dollars obtained in the United States,
+Germany's financing--like her whole conduct of the war--is
+self-contained. Through five Imperial 5 per cent loans ranging from one
+to three billion dollars each, she has established a war credit of
+$12,500,000,000. This money--to a smaller degree than in France--has
+come from the great mass of the German people.
+
+Other sources of revenue that are enabling the Kaiser to pay for the
+war are Treasury Bills sold at home and a taxation that is moderate
+compared with the colossal pre-war taxation which spelled Germany's
+Preparedness. At the time I write this chapter her war expenditure had
+passed the $14,000,000,000 mark. Tack on to this Germany's peace debt of
+$5,000,000,000 more and you begin to see--with all the uncertainty of
+the war's duration--the immense burden that the Fatherland will have to
+carry. The war's drain on the German future is perhaps greater than that
+of any other country because all her war loans are long term. She has
+also loaned nearly $1,000,000,000 to Austria, Turkey and Bulgaria.
+
+The Teutonic war cost has one distinct advantage over all others in that
+it is confined within the German borders. Hence Germany can do as she
+pleases with regard to its settlement. If the Mailed Fist obtains after
+the war she can clamp it down on her loans, wipe them out as she chooses
+and no one can offer a protest.
+
+Now let us dump all these statistics that represent so much blood, agony
+and sacrifice into the middle of the table and strike a final balance
+sheet.
+
+On one hand you have the assets of the warring countries as represented
+by their national wealth. For the Allies, including Roumania, they show
+a total of $273,000,000,000: for the Central Powers they register
+$134,000,000,000. If wealth is the winning factor then the Allies have
+the advantage in weight of buying metal.
+
+Take the other side of the ledger and you see that up to November 1,
+1916, the four principal allied countries, England, France, Russia and
+Italy, had spent on direct war cost approximately $34,000,000,000, while
+the total Teutonic war expenditures have been $21,000,000,000. To this
+actual war cost must be added the peace debts of the belligerent nations
+which would supplement the allied expense account by $17,465,000,000 and
+that of the enemy nations by $9,808,000,000.
+
+Striking a grand total of liabilities, you find that if the war
+mercifully ends by August 1, 1917 (as Kitchener predicted it might), the
+fighting peoples would face a debt burden of all kinds that had reached
+$105,773,000,000.
+
+After this colossal scale of expenditures you may well ask: Will it ever
+be possible for European finance to see straight or count normally
+again?
+
+Be that as it may, no one can doubt that the battling nations,
+individually or with the marvellous team-work that kinship in their
+respective causes has begot, are able to pay their way while the
+struggle lasts. Grim To-day will take care of itself under the stress of
+passion born of desire to win. It is the Reckoning of that Uncertain
+To-morrow that will prove to be the problem.
+
+You cannot bankrupt a nation any more than you can ruin an individual so
+long as brains and energy are available. Peace therefore will not find a
+ruined Europe but it will dawn on a group of depleted countries facing
+enormous responsibilities. War ends but the cost of it endures. Just as
+present millions are paying with their lives so will unborn hosts pay
+with the sweat of their brows.
+
+Meanwhile our Financial Stake in the Great Struggle is secure. How much
+more we will have to put into Europe's Red Pay Envelope remains to be
+seen. In any event, we have learned how to do it.
+
+
+
+
+VII--_The Man Lloyd George_
+
+
+The door opened and almost before I had crossed the threshold the little
+grey-haired man down at the end of the long stately room began to speak.
+Lloyd George was in action.
+
+I had last seen him a year ago in the murk of a London railway station
+when I bade him farewell after a memorable day. With him I had gone to
+Bristol where he had made an impassioned plea for harmony to the Trade
+Union Congress. Then he was Minister of Munitions, Shell-Master of the
+Nation in its critical hour of Ammunition Need.
+
+Now he had succeeded the lamented Kitchener as Minister of War; sat in
+the Seat of Strategy, head of the far-flung khakied hosts that even at
+this moment were breasting death on half a dozen fronts. Just as twelve
+months before he had unflinchingly met the Great Emergency that
+threatened his country's existence, so did he again fill the National
+Breach.
+
+England's Man of Destiny whose long career is one continuous and
+spectacular public performance was on the job.
+
+But it was not the same Lloyd George who had sounded the call for
+Military and Industrial Conscription from the Peaks of Empire. Another
+year of war had etched the travail of its long agony upon his features,
+saddened the eyes that had always beheld the Vision of the Greater
+Things. The little man was fresh from the front and full of all that its
+mighty sacrifice betokened not only to the embattled nations but to the
+world as well.
+
+Though we spoke of Politics, Presidents and the Great Social Forces that
+so far as England was concerned acknowledged him as leader, the current
+of speech always swept back to war and its significance for us.
+
+"Since the war means so much to us," I said, "have you no message for
+America?"
+
+Throughout our talk he had sat in a low chair sometimes tilting it
+backward as he swayed with the vehemency of his words. Suddenly he
+became still. He turned his head and looked dreamily out the window at
+his left where he could see the throng of Whitehall as it swept back
+and forth along London's Great Military Way.
+
+Then rising slowly and with eloquent gesture and trembling voice (he
+might have been speaking to thousands instead of one person), he said:
+
+"The hope of the world is that America will realise the call that
+Destiny is making to her in tones that are getting louder and more
+insistent as the terrible months go by. That Destiny lies in the
+enforcement of respect for International Law and International Rights."
+
+It was a pregnant and unforgettable moment. From the Throne Room of a
+Mighty Conflict England's War Lord was sounding the note of a distant
+process of peace.
+
+If you had probed behind this kindling utterance you would have seen
+with Lloyd George himself that beyond the flaming battle-lines and past
+the tumult of a World at War was the hope of some far-away Tribunal that
+would judge nations and keep them, just as individuals are kept, in the
+path of Right and Humanity.
+
+But before any such bloodless antidote can be applied to International
+Dispute, to quote Lloyd George again: "This war must be fought to a
+finish."
+
+These final words, snapped like a whip-lash and emphasised with a
+fist-beat on the table, meant that England would see her Titan Task
+through and if for no other reason because the man who drives the war
+gods wills it so. What sort of man is this who goes from post to post
+with inspired faith and unfailing execution? What are the qualities that
+have lifted him from obscure provincial solicitor to be the Prop of a
+People?
+
+"Let George do it," has become the chronic plea of all Britain in her
+time of trial. How does he do it?
+
+To understand any man you must get at his beginnings. Thus to appreciate
+Lloyd George you must first know that he is Welsh and this means that he
+was cradled in revolt. He must have come into the world crying protest.
+He was reared in a land of frowning crags and lovely dales, of mingled
+snow and sunshine, of poetry and passion. About him love of liberty
+clashed with vested tyranny. These conflicting things shaped his
+character, entered into his very being and made him temperamentally a
+creature of magnificent ironies.
+
+But this conflict did not end with emotion. All his life Contrast,
+sometimes grotesque but always dramatic, has marked him for its own. You
+behold the Apostle of Peace who once espoused the Boer, translated into
+the flaming Disciple and Maker of War through the Rape of Belgium. You
+see the fiery Radical, jeered and despised by the Aristocracy, become
+the Protector of Peers. No wonder he stands to-day as the most
+picturesque, compelling and challenging figure of the English speaking
+race. Only one other man--Theodore Roosevelt--vies with him for this
+many-sided distinction.
+
+The son of a village schoolmaster who died when he was scarcely three:
+the ward of a shoe-maker who was also inspired lay-preacher: the
+political protege of a Militant Nationalist whose heart bled at the
+oppression of the Welsh, Lloyd George early looked out upon a life
+smarting with grievance and clamouring to be free. Knowing this, you can
+understand that the dominant characteristic of this man is to rebel
+against established order. Swaddled in Democracy, he became its
+Embodiment and its Voice.
+
+The world knows about the Lloyd George childhood spent amidst poverty in
+a Welsh village. The big-eyed boy ate, thought and dreamed in Welsh,
+"the language that meant a daily fare of barley bread." When he learned
+English it was like acquiring a foreign tongue. He grew up amid a great
+revival of Welsh art, letters and religion that stirred his soul. He
+missed the pulpit by a narrow margin, yet he has never lost the
+evangelistic fervour which is one of the secrets of his control and
+command of people.
+
+With the alphabet Lloyd George absorbed the wrongs of his people and
+they were many. The Welsh had a double bondage: the grasp of the
+Landlord and the Thrall of the Church. All about him quivered the
+aspiration for a free land, a free people and a free religion. In those
+days Wales was like another Ireland with all the hardship that Eviction
+imposes.
+
+The call to leadership came early. As a boy in school he led his mates
+in rebellion against the drastic dictates of a Church which prescribed
+liberty of religious thoughts and speech. He became the Apostle of
+Nonconformity and for it waged some of his fiercest battles.
+
+Always the gift of oratory was his. He preached temperance almost with
+his advent into his teens: he was a convincing speaker before most boys
+talked straight.
+
+In due time Lloyd George became a solicitor but it was merely the step
+into public life. To plead is instinct with him and with advocacy of a
+case in court he was always urging some reform for his little country.
+Politics was meat and drink to him and he stood for Parliament. An
+ardent Home Ruler, he swayed his followers with such intensity that what
+came to be known as Lloyd George's Battle Song sprang into being. Sung
+to the American tune of "Marching Through Georgia" it was hailed as the
+fighting hymn of Welsh Nationalism. Two lines show where the young Welsh
+lawyer stood in his early twenties: they also point his whole future:
+
+
+     "The Grand Young Man will triumph,
+     Lloyd George will win the day----"
+
+
+There is something Lincoln-like in the spectacle of his first struggle.
+This lowly lad fought the forces of "Squirearchy and Hierarchy." The
+Tories hurled at him the anathema that he "had been born in a cottage."
+
+"Ah," replied Lloyd George, when he heard of it: "the Tories have not
+realised that the day of the cottage-bred man has dawned."
+
+Before he got through he was destined to show, that so far as
+opportunity was concerned, the Cottage in Great Britain was to be on a
+par with a Palace.
+
+As you analyse Lloyd George's life you find that he has always been a
+sort of Human Lightning Rod that attracted the bolts of abuse. A
+campaign meant violent controversy, frequently physical conflict. The
+reason was that he always stated his cause so violently as to arouse
+bitter resentment.
+
+Into his first election he flung himself with the fury of youth and the
+eager passion of a zealot. He threw conventional Liberalism to the wind
+and made a fight for a Free and United Wales. He frankly believed
+himself to be the inspired leader of his people: often his meetings
+became riots. More than once he was warned that the Tories would kill
+him and on several occasions he narrowly escaped death. Once while
+riding with his wife in an open carriage through the streets of Bangor
+he was assailed by a hooting, jeering mob. Some one threw a blazing fire
+ball, dipped in paraffine, into the vehicle. It knocked off the
+candidate's hat and fell into Mrs. Lloyd George's lap setting her afire.
+Lloyd George threw off his coat, smothered the flames and after finding
+that the innocent victim of the assault was uninjured, calmly proceeded
+to the Town Hall where he spoke, accompanied by a fusillade of stones
+which smashed every window in the structure.
+
+In this campaign, as in all succeeding ones, Lloyd George used the full
+powers of press publicity. He made reporters his confidants. Often he
+rehearsed his speeches before them, striding up and down and declaiming
+as passionately as if he were facing huge audiences. In fact he acquired
+an interest in a group of Welsh papers.
+
+Already Welsh chieftainship was being crystallised in the aggressive
+little fire-eater. Anticipating the coming call of the Mother Country
+she was laying her burdens on his stalwart shoulders. And what George
+was now doing for Wales he was soon to do in the larger arena of the
+Empire.
+
+Once in Parliament Lloyd George was no man's man. He became a free lance
+and while sometimes he ran amuck his cause was always the cause of his
+people.
+
+In those earlier Parliamentary days you find some of the traits that
+distinguished him later on. For one thing he disdained the drudgery of
+committee work: he chafed at the confinement of the conference room;
+eagle-like he yearned to spread his wings. His forte was talking. He
+loathed to mull over dull and unresponsive reports. He frankly admitted
+a disinclination to work, and it makes him one of the most superficial
+of men in what the world calls culture. His intelligence has more than
+once been characterised as "brilliant but hasty."
+
+But offsetting all this is the man's persuasive and pleading personality
+which always gets him over the shallow ground of ignorance. This is one
+reason why Lloyd George has always been stronger in attack than in
+defence. His tactic has always been either to assault first or make a
+swift counterdrive. He is a sort of Stonewall Jackson of Debate.
+
+Then, as throughout his whole career, he showed an extraordinary
+aversion to letter-writing. He became known in Parliament as the "Great
+Unanswered." He used to say, and still does, that an unanswered letter
+answers itself in time. This led to the tradition that the only way to
+get a written reply out of Lloyd George was to enclose two addressed and
+stamped cards, one bearing the word "Yes" and the other "No." More than
+once, however, when friends and constituents tried this ruse they got
+both cards back in the same envelope!
+
+Not long ago a well known Englishman wanted to make a written request of
+Lloyd George and on consulting one of his associates was given this
+instruction: "Make it brief. Lloyd George never reads a letter that
+fills more than half a page."
+
+There is no need of rehearsing here the long-drawn struggle through
+which he made his way to party leadership. In Parliament and out, he was
+a hornet--a good thing to let alone, and an ugly customer to stir up.
+Whether he lined up with the Government or Opposition it mattered
+little. Lloyd George has always been an insurgent at heart.
+
+The crowded Nineties were now nearing their end, carrying England and
+Lloyd George on to fateful hour. Ministries rose and fell: Roseberry and
+Harcourt had their day: Chamberlain climbed to power: Asquith rose over
+the horizon. The long smouldering South African volcano burst into
+eruption. It meant a great deal to many people in England but to no man
+quite so much as to Lloyd George.
+
+Now comes the first of the many amazing freaks that Fate played with
+him. The Institution of War which in later years was to make him the
+very Rock of Empire was now, for a time at least, to be his undoing.
+
+Before the conflict with the Boers Lloyd George was a militant
+pacifist--a sort of peacemaker with a punch. When England invaded the
+Transvaal Lloyd George began a battle for peace that made him for the
+first time a force in Imperial affairs. He believed himself to be the
+Anointed Foe of the War and he dedicated himself and all his powers to
+stem what seemed to be a hopeless tide.
+
+It was a courageous thing to do for he not only risked his reputation
+but his career. Up and down the Empire he pleaded. He was in some
+respects the brilliant Bryan of the period but with the difference that
+he was crucifying himself and not his cause upon the Cross of Peace. He
+became the target of bitter attack: no epithet was too vile to hurl upon
+him. Often he carried his life in his hands as the episode of the
+Birmingham riot shows. In all his storm tossed life nothing approached
+this in daring or danger.
+
+Lloyd George was invited to speak in the Citadel of Imperialism which
+was likewise the home of Joseph Chamberlain, Arch-Apostle of the Boer
+War. Save for the staunchest Liberals the whole town rose in protest.
+For weeks the local press seethed and raged denouncing Lloyd George as
+"arch-traitor" and "self-confessed enemy." He was warned that he would
+imperil his life if he even showed himself. He sent back this word: "I
+am announced to speak and speak I will."
+
+He reached Birmingham ahead of schedule time and got to the home of his
+host in safety. All day long sandwich men paraded the highways bearing
+placards calling upon the citizenry to assemble at the Town Hall where
+Lloyd George was to speak "To defend the King, the Government and Mr.
+Chamberlain."
+
+Night came, the streets were howling mobs, every constable was on duty.
+The hall was stormed and when Lloyd George appeared on the platform he
+faced turmoil. Hundreds of men carried sticks, clubs and bricks covered
+with rags and fastened to barbed wire. When he rose to speak Bedlam let
+loose. Jeers, catcalls and frightful epithets rained on him and with
+them rocks and vegetables. He removed his overcoat and stood calm and
+smiling. When he raised his voice, however, the grand assault was made.
+Only a double cordon of constables massed around the stage kept him from
+being overwhelmed. In the free-for-all fight that followed one man was
+killed and many injured.
+
+Anything like a speech was hopeless: the main task was to save the
+speaker's life, for outside in the streets a bloodthirsty rabble waited
+for its prey. Lloyd George started to face them single-handed and it
+was only when he was told that such procedure would not only foolishly
+endanger his life but the lives of his party which included several
+women, he consented to escape through a side door, wearing a policeman's
+helmet and coat.
+
+Fourteen years later Lloyd George returned to Birmingham acclaimed as a
+Saviour of Empire. Such have been the contrasts in this career of
+careers.
+
+Fortunately England, like the rest of the world, forgets. The mists of
+unpopularity that hung about the little Welshman vanished under the
+sheer brilliancy of the man. When the Conservative Government fell after
+the Boer War he was not only a Cabinet possibility but a necessity. The
+Government had to have him. From that time on they needed him in their
+business.
+
+Lloyd George drew the dullest and dustiest of all portfolios--the Board
+of Trade. He found the post lifeless and academic; he vivified and
+galvanised it and made it a vital branch of party life and dispute. It
+is the Lloyd George way.
+
+Here you find the first big evidence of one of the great Lloyd George
+qualities that has stood him in such good stead these recent turbulent
+years. He became, like Henry Clay, the Great Conciliator. The whole
+widespread labour and industrial fabric of Great Britain was geared up
+to his desk. It shook with unrest and was studded with strife. Much of
+this clash subsided when Lloyd George came into office because he had
+the peculiar knack of bringing groups of contending interests together.
+Men learned then, as they found out later, that when they went into
+conference with Lloyd George they might as well leave their convictions
+outside the door with their hats and umbrellas.
+
+To this policy of readjustment he also brought the laurel of
+constructive legislation. To him England owes the famous Patents Bill
+which gives English labour a share in the English manufacture of all
+foreign invention; the Merchant Shipping Bill which safeguards the
+interest of English sailor and shipper; and the Port of London Bill
+which made the British metropolis immune from foreign ship menace.
+
+England was fast learning to lean on the grey-eyed Welshman. He came to
+be known as the "Government Mascot": he was continually pulling his
+party's chestnuts out of the fire of failure or folly. George had begun
+to "do it" and in a big way.
+
+Likewise the whole country was beginning to feel pride in his
+performance as the following story, which has been adapted to various
+other celebrities, will attest:
+
+Lloyd George sat one day in the compartment of a train that was held up
+at the station at Cardiff. A porter carrying a traveller's luggage
+noticed him and called his client's attention, saying:
+
+"There is Lloyd George himself in that train."
+
+The traveller seemed indifferent and again the porter called attention
+to the budding great man. After persistent efforts to rouse his
+interest, the tourist, much nettled, said tartly:
+
+"Suppose it is. He's not God Almighty."
+
+"Ah," replied the porter, "remember he's young yet."
+
+When Lloyd George became Chancellor of the Exchequer under Asquith no
+one was surprised. It is typical of the man that he should have leaped
+from the lowest to the highest place but one in the Cabinet.
+
+As Chancellor he had at last the opportunity to fulfill his democratic
+destiny. Whatever Lloyd George may be, one thing is certain: he is
+essentially a man of the masses. With his famous People's Budget he
+legislated sympathy into the law. It meant the whole kindling social
+programme of Old Age pensions, Health and Unemployment insurance,
+increased income tax and an enlarged death duty. As most people know, it
+put much of the burden of English taxation on the pocketbooks of the
+people who could best afford to pay. The Duke-baiting began.
+
+Just as he had fought for a Free Wales so did he now struggle for a Free
+Land. All his amazing picturesqueness of expression came into play. He
+contended that Monopoly had made land so valuable in Britain that it
+almost sold by the grain, like radium. In commenting on the heavy taxes
+levied by the land autocrats upon commercial enterprise in London he
+made his famous phrase:
+
+"This is not business. It is blackmail!"
+
+To democracy the Budget meant economic emancipation: the banishment of
+hunger from the hearth: the solace of an old age free from want. It made
+Lloyd George "The Little Brother of the Poor." To the Aristocracy it was
+the gauge of battle for the bitterest class war ever waged in England:
+violation of ancient privilege.
+
+The fight for this programme made Lloyd George the best known and most
+detested man in England. To hate him was one of the accomplishments of
+titled folk to whom his very name was a hissing and a by-word. Massed
+behind him were the common people whose champion he was: arrayed against
+him were the powers of wealth and rank.
+
+In this campaign Lloyd George used the three great weapons that he has
+always brought to bear. First and foremost was the force of his
+personality, for he swept England with a tidal wave of impassioned
+eloquence. Second, he unloosed as never before the reservoirs of ink,
+for he used every device of newspaper and pamphlet to drive home his
+message. He even printed his creed in Gaelic, Welsh and Erse. Third, he
+employed his kinship with the people to the fullest extent. The Commoner
+won. As the great structure of social reform rose under his dynamic
+powers so did the influence of the House of Lords crumble like an
+Edifice of Cards. Democracy in England meant something at last!
+
+The tumult and the shouting died, the smoke cleared, and Lloyd George
+stood revealed as England's Strong Man, a sort of Atlas upholding the
+World of Public Life and much of its responsibilities.
+
+Now for the first time he was caught up in the fabric of the Crimson Net
+that a few years later was to haul nearly all Europe into war. In 1911
+Germany made a hostile demonstration in Morocco. Although England had no
+territorial interests there, it was important for many reasons to warn
+the Kaiser that she would oppose his policy with armed force if
+necessary. A strong voice was needed to sound this note. Lloyd George
+did it.
+
+Hence it came about that the Chancellor of the Exchequer stood in the
+Mansion House on a certain momentous day and hurled the defi at the War
+Lord. It called the Teuton bluff for a while at least. In the light of
+later events this speech became historic. Not only did Lloyd George
+declare that "national honour is no party question," but he affirmed
+that "the peace of the world is much more likely to be secured if all
+the nations realise fairly what the conditions of peace must be."
+
+Persistent pacifist propagandists to-day may well take warning from that
+utterance. He still believes it.
+
+The spark that flashed at Agadir now burst into flame. The Great War
+broke and half the world saw red. What Lloyd George believed impossible
+now became bitter and wrathful reality. Though he did not know it at the
+moment, the supreme opportunity of his life lay on the lap of the god of
+Battles.
+
+The Lloyd George who sat in council in Downing Street was no dreaming
+pacifist. He who had tried to stop the irresistible flood of the Boer
+War now rode the full swell of the storm that threatened for the moment
+to engulf all Britain.
+
+As Chancellor of the Exchequer he was called upon to shape the fiscal
+policies that would be the determining factor in the War of Wars. "The
+last Ł100,000,000 will win," he said. Only one other man in
+England--Lord Kitchener--approached him in immense responsibility of
+office in the confidence of the people. It was a proud but equally
+terrifying moment.
+
+Then indeed the little Welshman became England's Handy Man. As custodian
+of the British Pocketbook he had a full-sized job. But that was only
+part of the larger demand now made on his service. Popular faith
+regarded him as the Nation's First Aid, infallible remedy for every
+crisis.
+
+If a compromise with Labor or Capital had to be effected it was Lloyd
+George who sat at the head of the table: if an Ally needed counsel or
+inspiration it was the Chancellor who sped across the water and laid
+down the law at Paris or Petrograd: if the Cause of Empire clamoured for
+expression from Government Seat or animated rostrum, he stood forth as
+the Herald of Freedom. So it went all through those dark closing months
+of 1914 as reverse after reverse shook the British arms and brought home
+the realisation that the war would be long and costly.
+
+The year 1915 dawned full of gloom for England but pointing a fresh star
+for the career of Lloyd George. Although the first wave of Kitchener's
+new army had dashed against the German lines in France and established
+another tradition for British valour, the air of England became charged
+with an ominous feeling that something was wrong at the front. The
+German advance in the west had been well nigh triumphant. Reckless
+bravery alone could not prevail against the avalanche of Teutonic steel.
+
+All the while the imperturbable Kitchener sat at his desk in the War
+Office--another man of Blood and Iron. He ran the war as he thought it
+should be run despite the criticism that began to beat about his head.
+To the average Englander he was a king who could do no wrong. But the
+conduct of war had changed mightily since Kitchener last led his troops.
+Like Business it had become a new Science, fought with new weapons and
+demanding an elastic intelligence that kept pace with the swift march of
+military events. The Germans were using every invention that marvellous
+efficiency and preparedness could devise. They met ancient England
+shrapnel with modern deadly and devastating high-explosives. If the war
+was to be won this condition had to be changed--and at once.
+
+Two men in England--Lloyd George and Lord Northcliffe--understood this
+situation. Fortunately they are both men of courageous mould and
+unwavering purpose. One day Northcliffe sent the military expert of the
+_Times_ (which he owns) to France to investigate conditions. He found
+that the greatest need of the English Army was for high-explosives. They
+were as necessary as bread. Into less than a quarter of a column he
+compressed this news. Instead of submitting it to the Censor who would
+have denied it publication, Northcliffe published the despatch and with
+it the revelation of Kitchener's long and serious omission. He not only
+risked suspension and possible suppression of his newspapers, but also
+hazarded his life because a great wave of indignation arose over what
+seemed to be an unwarranted attack upon an idol of the people. But it
+was the truth nevertheless.
+
+At a time when England was supposed to be sensation-proof this
+revelation fell like a forty-two centimetre shell. It was an amazing
+and dramatic demonstration of the power of the press and it created a
+sensation.
+
+Shell shortage at the front had full mate in a varied deficiency at
+home. Ammunition contracts had been let to private firms at excessive
+prices: labour was restricting output and breaking into periodic
+dissension: drink was deadening energy: in short, all the forces that
+should have worked together for the Imperial good were pulling apart.
+
+Northcliffe began a silent but aggressive crusade for reform in his
+newspapers, while Lloyd George let loose the powers of his tongue. A
+national crisis, literally precipitated by these two men, arose. The
+Liberal Government fell and out of its wreck emerged the Coalition
+Cabinet. This welding of one-time enemies to meet grave emergency did
+more than wipe out party lines in an hour that threatened the Empire's
+very existence.
+
+The reorganised Cabinet knew--as all England knew--that the greatest
+requirement was not only men but munitions. A galvanic personality was
+necessary to organise and direct the force that could save the day. A
+new Cabinet post--the Ministry of Munitions--was created. Who could
+fill it was the question. There was neither doubt nor uncertainty about
+the answer. It was embodied in one man.
+
+The little Welshman became Minister of Munitions.
+
+Lloyd George had led many a forlorn hope by taking up the task that
+weaker hands had laid down. Here, however, was a situation without
+precedent in a life that was a rebuke to convention. To succeed to an
+organised and going post these perilous war times was in itself a
+difficult job. In the case of the Ministry of Munitions there was
+nothing to succeed. Lloyd George had been given a blank order: it was up
+to him to fill it. He had to create a whole branch of Government from
+the ground up. All his powers of tact and persuasion were called into
+play. For one thing he had to fit the old established Ordnance
+Department rooted in tradition and jealous of its prerogatives into the
+new scheme of things.
+
+Lloyd George was no business man, but he knew how business affairs
+should be conducted. He knew, too, that America had reared the empire of
+business on close knit and efficient organisation. He did what Andrew
+Carnegie or any other captain of capital would do. He called together
+the Schwabs, the Edisons, the Garys and the Westinghouses of the Kingdom
+and made them his work fellows.
+
+From every corner of the Empire he drafted brains and experience. He
+wanted workers without stint, so he started a Bureau of Labor Supply: he
+needed publicity, so he set up an Advertising Department: to compete
+with the Germans he realised that he would need every inventive resource
+that England could command, so he founded an Invention and Research
+Bureau: he saw the disorganisation attending the output of shells in
+private establishments, so he planted the Union Jack in nearly every
+mill and took over the control of British Industry: he found labour at
+its old trick of impeding progress, so with a Munitions Act he
+practically conscripted the men of forge and mill into an industrial
+army that was almost under martial law. He cut red tape and injected red
+blood into the Department that meant national preservation. In brief,
+Lloyd George was on the job and things were happening.
+
+The Minister established himself in an old mansion in Whitehall Garden
+where belles and beaux had danced the stately minuet. It became a dynamo
+of energy whose wires radiated everywhere. "More Munitions" was the
+creed that flew from the masthead.
+
+A typical thing happened. The working force of the Ministry grew by
+leaps and bounds: already the hundreds of clerks were jam up against the
+confining walls of the old grey building. Lloyd George sent for one of
+his lieutenants and said:
+
+"We must have more room."
+
+"We have already reported that fact and the War Office says it will take
+three months to build new office space," was the reply.
+
+"Then put up tents," snapped the little man, "and we will work under
+canvas."
+
+Realising that his principal weapons were machines, Lloyd George took a
+census of all the machinery in the United Kingdom and got every pound of
+productive capacity down on paper. He was not long in finding out why
+the ammunition output was shy. Only a fifth of the lathes and tools used
+for Government work ran at night. "These machines must work every hour
+of the twenty-four," he said. Before a fortnight had passed every
+munitions mill ground incessantly.
+
+These machines needed adequate manning. Lloyd George thereupon created
+the plan that enlisted the new army of Munitions Volunteers. Nelson-like
+he issued the thrilling proclamation that England expected every machine
+to do its duty. It meant the end of restricted output.
+
+With the ban off restriction he likewise clamped the lid down on drink.
+Munitions workers could only go to the public houses within certain
+hours: the man who brought liquor into a Government controlled plant
+faced fines and if the offence was repeated, a still more drastic
+punishment.
+
+Lloyd George began a censorship of labour which disclosed the fact that
+many skilled workers were wasting time on unskilled tasks. Lloyd George
+now began to dilute the skilled forces with unskilled who included
+thousands of women.
+
+Right here came the first battle. Labour rebelled. It could find a way
+to get liquor but it resented dilution and cried out against capacity
+output. The Shell Master again became the Conciliator. He curbed the
+wild horses, agreeing to a restoration of pre-war shop conditions as
+soon as peace came. All he knew was the fact that the guns hungered and
+that it was up to him to feed them.
+
+The wheels were not whirring fast enough to suit Lloyd George. "We must
+build our own factories," he said. Almost over night rose the mills
+whose slogan was "English shells for English guns." In speeding up the
+English output the Welshman was also equipping England to meet coming
+needs, laying the first stone of the structure that is fast becoming an
+Empire Self-Contained.
+
+Lloyd George realised that he could not run every munitions plant,
+whereupon he organised local Boards of Control in the great ordnance
+centres like Woolwich, Sheffield, Newcastle and Middleboro. Each became
+a separate industrial principality but all bound up by hooks of steel to
+the Little Wizard who sat enthroned at Whitehall.
+
+England became a vast arsenal, throbbing with ceaseless activity. The
+smoke that trailed from the myriad stacks was the banner of a new and
+triumphant faith in the future.
+
+What was the result? Up and down the western battle front English cannon
+spoke in terms of victory. No longer was British gunner required to
+husband shells: to meet crash with silence. He hurled back steel for
+steel and all because England's Hope had answered England's Call. Lloyd
+George had done it again.
+
+I first met Lloyd George during those crowded days when he was
+Commander-in-Chief of the host that fed the firing line. Under his
+magnetic direction British industry had been forged into a colossal
+munitions shop. No man in England was busier: not even the King was more
+inaccessible. Life with him was one engagement after another.
+
+Now came one of those swift emergencies that seems to crowd so fast upon
+Lloyd George's life and with it arose my own opportunity.
+
+The British Trade Union Congress in annual session at Bristol had
+expressed Labour's dissatisfaction over its share of the munitions
+profits. Lloyd George had sent them a letter explaining his proposed
+excess profit tax, but this apparently was not enough. The delegates
+still growled.
+
+"Then I'll go down and speak to them in person," said the Minister with
+characteristic energy.
+
+Thus it happened that I journeyed with him to the old town, background
+of stirring naval history. On the way down half a dozen department heads
+poured into his responsive ears the up-to-the-minute details of the work
+in hand. He became a Human Sponge soaking up the waters of fact.
+
+At Bristol in a crowded stuffy hall he faced what was at the start
+almost a menacing crowd. Yet as he addressed them you would have thought
+that he had known every man and woman in the assembly all their lives.
+The easy, intimate, frank manner of his delivery: his immediate claim to
+kinship with them on the ground of a common lowly birth: his quick and
+stirring appeal to their patriotism swept aside all discord and
+disaffection. As he gave an eloquent account of his stewardship you
+could see the audience plastic under his spell. The people who had
+assembled to heckle sat spellbound. When he had finished they not only
+gave him an ovation but pledged themselves anew to the gospel of "More
+Munitions."
+
+It was on the train back to London that I got a glimpse of the real
+Lloyd George. What Roosevelt would have called "a bully day" had left
+its impress upon the little man. His long grey hair hung matted over a
+wilted collar: there was a wistful sort of weariness in his eyes. He
+sank into a big chair and looked for a long time in silence at the
+flying landscape. Then suddenly he aroused himself and began to talk.
+Like many men of his type whom you go to interview he began by
+interviewing the interviewer.
+
+The first two questions that Lloyd George asked me showed what was going
+on in his mind, for they were:
+
+"What were Lincoln's views of conscription, and did your soldiers vote
+during the Civil War?"
+
+There was definite method in these queries, for already the Shadow of
+Conscription had begun to fall over all England. It was Lloyd George,
+aided by Northcliffe, who led the fight for it.
+
+The talk always went back to the great war. When I spoke of his speech
+at Bristol his face kindled and he said:
+
+"Have you stopped to realise that this war is not so much a war of human
+mass against human mass as it is a war of machine against machine? It is
+a duel between the English and German workman."
+
+You cannot talk long with Lloyd George without touching on democracy.
+This is his chosen ground. I shall never forget the fervour with which
+he said:
+
+"The European struggle is a struggle for world liberty. It will mean in
+the end a victory for all democracy in its fight for equality."
+
+When I asked him to write an inscription for a friend of mine and
+express the hope that lay closest to his heart, he took a card from his
+pocket, gazed for a moment at the rushing country now shot through with
+the first evening lights, and then wrote: "Let Freedom win."
+
+A few days later Lloyd George made still another appearance in his now
+familiar rôle of England's Deliverer. The South Wales coal miners,
+2,000,000 in number, went on strike at a time when Coal meant Life to
+the Empire. There is no need of asking the name of the man who went to
+calm this storm. Only one was eligible and he lost no time.
+
+Lloyd George did not call a conference at Cardiff: he went straight to
+Wales and spoke to the workers at the mouth of the pit. What arbitration
+and conciliation had failed to do, his hypnotic oratory achieved. The
+men went back to the mines with a cheer.
+
+A week later at the London Opera House he made a notable speech to the
+Conference of Representatives of the Miners of Great Britain. To have
+heard that speech was to get a liberal education in the art of
+phraseology and to carry always in memory the magic of the man's voice.
+In this speech he said:
+
+
+     "In war and peace King Coal is the paramount industry. Every pit is
+     a trench: every workshop a rampart: every yard that can turn out
+     munitions of war is a fortress.... Coal is the most terrible of
+     enemies and the most potent of friends.... When you see the seas
+     clear and the British flag flying with impunity from realm to realm
+     and from shore to shore--when you find the German flag banished
+     from the face of the ocean, who had done it? The British miner
+     helping the British sailor."
+
+
+Small wonder that after this effort the miners of Wales should acclaim
+their gallant countryman as Industrial Messiah.
+
+You would think that by this time England had made her final tax on the
+resource of her Ready Man. But she had not. There came the desolate day
+when the news flashed over England that the "Hampshire" had gone down
+and with it Kitchener. Following the shock of this blow, greater than
+any that German arms could deliver, arose the faltering question, "Who
+is there to take his place?"
+
+It did not falter long. Once more the S.O.S. call of a Nation in
+Distress flashed out and again the spark found its man. Lloyd George
+went from Ministry of Munitions to sit in Kitchener's seat at the War
+Office. Unlike the Hero of Khartoum, he had no service in the field to
+his credit. But he knew men and he also knew how to deploy them. Just as
+he brought the Veterans of Business to sit around the Munitions Board,
+so did he now marshal war-tried campaigners for the Strategy Table. The
+Somme blow was struck: the new War Chieftain proved his worth.
+
+In the midst of all these new exactions Lloyd George found time for
+other and arduous national labours. Two more episodes will serve to
+close this narrative of unprecedented achievement.
+
+When the recent Irish Revolt had registered its tragedy of blood, death
+and execution, menacing the very structure of Empire, Lloyd George
+became the Emissary of Peace to the Isle of Unrest.
+
+Again, when prying peacemakers sought to intrude themselves upon the
+nations engaged in a life and death struggle, it was Lloyd George, in a
+remarkable interview, who warned all would-be winners of the Nobel prize
+that peace talk was unfriendly, that "there was neither clock nor
+calendar in the British Army," that the Allies would make it a finish
+fight.
+
+So it went until gloom once more took up its abode amid the Allies.
+Bucharest fell before the German assault: Greece seethed with the
+unhappy mess that Entente diplomacy had made of a great opportunity:
+land and sea registered daily some fresh evidence of Teutonic advance.
+What was wrong?
+
+England speculated, yet one man knew and that man was Lloyd George. He
+realised the futility of a many-headed direction of the war: with his
+swift insight he saw the tragic toll that all this cross purpose was
+taking. He made a demand on Asquith for a small War Council that would
+put dash, vigour and success into the British side of the conflict. The
+Premier refused to assent and Lloyd George resigned as War Chief. The
+Government toppled in a crisis that menaced the very future of the
+nation.
+
+Great Britain stood aghast. Lloyd George stood for all the popular
+confidence in victory that the nation felt. For a moment it appeared as
+if the very foundations of authority had crumbled.
+
+But not for long. When Bonar Law declined to reestablish the Government
+the oft-repeated cry for action that had invariably found its answer in
+the intrepid little Welshman, again rose up. Upon him devolved the task
+of constructing a new Cabinet which he headed as Prime Minister. He now
+reached the inevitable goal toward which he had unconsciously marched
+ever since that faraway day when his voice was first heard in
+Parliament.
+
+Even with Cabinet-making Lloyd George was a Revolutionist. He cut down
+the membership from twenty-four to five, establishing a compact and
+effective War Council whose sole task is to "win the war." He centred
+more authority in the Premiership than the English system has ever known
+before. He virtually became Dictator.
+
+On the other hand, he raised the number of Ministers outside the Cabinet
+from nineteen to twenty-eight. He scattered the coterie of lawyers who
+had so long comprised the Government Trust and put in men with red blood
+and proved achievement--in the main, self-made like himself. He
+installed a trained and competent business man of the type of Sir Albert
+Stanley, raised in the hard school of American transportation, as
+President of the Board of Trade: he drafted a seasoned commercial
+veteran like Lord Rhondda (D. A. Thomas), for President of the Local
+Government Board: he raised his old and experienced aide, Dr.
+Christopher Addison, to be Minister of Munitions: he made Lord Derby,
+who had conducted the great recruiting campaign, Minister of War: he put
+Sir Joseph Maclay, an extensive ship owner, into the post of Shipping
+Controller. Everywhere he supplanted politicians with doers.
+
+What was equally important he continued his rôle of Conciliator, for he
+placated Labour by giving it a large representation and he took a
+definite step toward the solution of the Irish problem by making Sir
+Edward Carson First Lord of the Admiralty.
+
+Even as he stood at what seemed the very pinnacle of his power Destiny
+once more marked him for its own. He had scarcely announced his Cabinet
+when the world was electrified by the news of the German peace proposal.
+By his own action Lloyd George had placed himself at the head of the
+Council charged with the conduct of the war. To the Wizard Welshman
+therefore was put squarely the responsibility of continuing or ending
+the stupendous struggle.
+
+Never before in the history of any country was such momentous
+responsibility concentrated in an individual. The dramatic element with
+which Lloyd George had become synonymous, found an amazing expression.
+He was ill in bed when the German suggestion was made. No official
+announcement of England's position in reply could be made until he had
+recovered. In the interim the whole world trembled with suspense while
+stock markets shivered. The Premier's name was on every tongue: the eyes
+of the universe were focussed on him. It was indeed his Great Hour.
+
+In what was the most significant speech of his career, and with all the
+force and fervour at his command, he stated the Empire's determination
+to fulfill its obligations to the trampled and ravaged countries. On
+that speech hung the stability of international financial credit, the
+lives of millions of men and the whole future security of Europe.
+
+You have seen the moving picture of a tumultuous life: what of the
+personality behind it?
+
+Reducing the Prime Minister to a formula you find that he is fifty per
+cent Roosevelt in the virility and forcefulness of his character,
+fifteen per cent Bryan in the purely demagogic phase of his makeup,
+while the rest is canny Celt opportunism. It makes a dazzling and
+well-nigh irresistible composite.
+
+It is with Roosevelt that the best and happiest comparison can be made.
+Indeed I know of no more convincing interpretation of the Thing that is
+Lloyd George than to point this live parallel. For Lloyd George is the
+British Roosevelt--the Imperial Rough Rider. Instead of using the Big
+Stick, he employs the Big Voice. No two leaders ever had so much in
+common.
+
+Each is more of an institution than a mere man: each dramatises himself
+in everything he does: each has the same genius for the benevolent
+assimilation of idea and fact. They are both persistent but brilliant
+"crammers." Trust Lloyd George to know all about the man who comes to
+see him whether he be statesman, author, explorer or plain captain of
+industry. It is one of the reasons why he maintains his amazing
+political hold.
+
+Lloyd George has Roosevelt's striking gift of phrase-making, although he
+does not share the American's love of letter writing. As I have already
+intimated, whatever may be his future, Lloyd George will never be
+confronted by accusing epistle. None exists.
+
+Like Roosevelt, Lloyd George is past master in the art of effective
+publicity. He has a monopoly on the British front page. Each of these
+remarkable men projects the fire and magnetism of his dynamic
+personality. Curiously enough, each one has been the terror of the
+Corporate Evil-doer--the conspicuous target of Big Business in his
+respective country. Each one is a dictator in the making, and it is safe
+to assume that if Lloyd George lived in a republic, like Roosevelt he
+would say: "My Army," "My Navy" and "My Policies."
+
+Roosevelt, however, has one distinct advantage over his British
+colleague in that he is a deeper student and has a wider learning.
+
+In one God-given gift Lloyd George not only surpasses Roosevelt but
+every other man I have ever met. It is an inspired oratory that is at
+once the wonder and the admiration of all who hear it. He is in many
+respects the greatest speaker of his day--the one man of his race whose
+utterance immediately becomes world property. The stage lost a great
+star when the Welsh David went into politics. There are those who say
+that he acts all the time, but that is a matter of opinion dictated by
+partisan or self-interest.
+
+Lloyd George is what we in America, and especially those of us born in
+the South, call the "silver-tongued." His whole style of delivery is
+emotional and greatly resembles the technique of the
+Breckenridge-Watterson School. In his voice is the soft melodious lilt
+of the Welsh that greatly adds to the attractiveness of his speech.
+
+Before the public he is always even-tempered and amiable, serene and
+smiling, quick to capitalize interruption and drive home the chance
+remark. He invariably establishes friendly relations with his hearers,
+and he has the extraordinary ability to make every man and woman in the
+audience before him believe that he is getting a direct and personal
+message.
+
+Lloyd George can be the unfettered poet or the lion unleashed. Shut your
+eyes as you listen and you can almost hear the music of mountain streams
+or the roar of rushing cataracts. In his great moments his eloquence is
+little short of enthralling, for it is filled with an inspired imagery.
+No living man surpasses him in splendour of oratorical expression. His
+speeches form a literature all their own.
+
+When, for example, yielding to that persistent Call of Empire for his
+service he interpreted England's cause in the war at Queen's Hall in
+London, in September, 1914, in what was in many respects his noblest
+speech, he said in referring to Belgium and Servia:
+
+"God has chosen little nations as the vessels by which He carries His
+choicest wines to the lips of humanity, to rejoice their hearts, to
+exalt their vision, to stimulate and strengthen their faith; and if we
+had stood by when two little nations were being crushed and broken by
+the brutal hands of barbarism, our shame would have rung down the
+everlasting ages."
+
+In closing this speech which he gave the characteristic Lloyd George
+title of "Through Terror to Triumph," he uttered a peroration full of
+meaning and significance to United States in its present hour of pride
+and prosperity. He said:
+
+
+     "We have been living in a sheltered valley for generations. We have
+     been too comfortable and too indulgent, many, perhaps, too
+     selfish, and the stern hand of fate has scourged us to an elevation
+     where we can see the everlasting things that matter for a
+     nation--the great peaks we had forgotten, of Honour, Duty,
+     Patriotism, and, clad in glittering white, the towering pinacle of
+     Sacrifice pointing like a rugged finger to Heaven.
+
+     "We shall descend into the valleys again; but as long as the men
+     and women of this generation last, they will carry in their hearts
+     the image of those mighty peaks whose foundations are not shaken,
+     though Europe rock and sway in the convulsions of a great war."
+
+
+Now take a closing look at the man himself. You see a stocky, well-knit
+figure, broad of shoulder and deep of chest. The animated body is
+surmounted by a face that alternately beams and gleams. There are
+strength and sensitiveness, good humour, courage and resolution in these
+features. His eyes are large and luminous, aglow at times with the
+poetry of the Celt: aflame again with the fervour of mighty purpose. He
+moves swiftly. To have him pass you by is to get a breath of life.
+
+To all this strength and power he brings undeniable charm. In action he
+is like a man exalted: in repose he becomes tender, dreamy, almost
+childlike. His whole nature seems to be driven by a vast and volcanic
+energy. This is why, like Roosevelt, he has been able to crowd the
+achievements of half a dozen careers into one. He is indeed the Happy
+Warrior.
+
+Yet Lloyd George knows how to play. I have known him to work incessantly
+all day and follow the Ministerial game far into the night. Ten o'clock
+the next morning would find him on the golf links at Walton Heath fresh
+and full of vim and energy. At fifty-three he is at the very zenith of
+his strength.
+
+Why has he succeeded? Simply because he was born to leadership. Without
+being profound he is profoundly moving: without studying life he is an
+unerring judge of men and moods. Volatile, masterful and above all human
+he is at once the most consistent and inconsistent of men.
+
+But it is a new Lloyd George who stepped from unofficial to official
+stewardship of England: a Lloyd George with the firebrand out of his
+being, purged of bitter revolt, chastened and mellowed by the years of
+war ordeal. Out of contact with mighty sacrifice has come a kinship with
+the spirit. He is to-day like a man transformed. "England hath need of
+him."
+
+There are those who see in the new Lloyd George a Conservative in
+evolution. But whatever the political product of this change may be, it
+represents the equipment necessary to meet the shock of peace. For peace
+will demand a leadership no less vigorous than war.
+
+The lowly lad who dreamed of power amid the Welsh Hills is to-day the
+Hope of Empire.
+
+
+
+
+VIII--_From Pedlar to Premier_
+
+
+The great General who once said that war is the graveyard of reputations
+might have added that in its fiery furnace great careers are welded. Out
+of the Franco-Prussian conflict emerged the Master Figure of Bismarck:
+the Soudan brought forth Kitchener and South Africa Lord Roberts. The
+Great Struggle now rending Europe has given Joffre to French history and
+up to the time of this writing it has presented to the British Empire no
+more striking nor unexpected character than William Morris Hughes, the
+battling Prime Minister of Australia--the Unknown who waked up England.
+
+Even to America where the dramatisation of the Self-made Idea has become
+a commonplace thing the story of his rise from pedlar to premier has a
+meaning all its own. Elsewhere in this book you have seen how he stirred
+Great Britain to the post-war commercial menace of the German. It is
+peculiarly fitting therefore that this narrative, dedicated as it is to
+the War after the War, should close with some attempt at interpretation
+of the personality of the man who sounded its first trumpet call.
+
+Like Lloyd George, Hughes is a Welshman. These two remarkable men, who
+have done so much to rouse their people, have more than racial kinship
+in common. They are both undersized: both rose from the humble hearth:
+both made their way to eminence by way of the bar: both gripped popular
+imagination as real leaders of democracy. They are to-day the two
+principal imperial human assets.
+
+Hughes will tell you that he was born frail and has remained so ever
+since. This son of a carpenter was a weak, thin, delicate boy, but
+always a fighter. At school in London he was the only Nonconformist
+around, and the biggest fellows invariably picked upon him. He could
+strike back with his fists and protect his narrow chest, but his legs
+were so thin that he had to stuff exercise books in his stockings to
+safeguard his shins.
+
+Hughes was trained for teaching, and only the restlessness of the Celt
+saved him from a life term in the schoolroom. At sixteen he had become
+a pupil instructor. But the sea always stirred his imagination. He would
+wander down to the East India Docks and watch the ships load with
+cargoes for spicy climes. One day as he watched the great freighters a
+boy joined him. He looked very sad, and when Hughes asked him the reason
+he said he wanted to go home to visit his people, but lacked the money.
+
+"I'll lend you some," said Hughes impulsively.
+
+He went home and out of the lining of an ancient concertina he produced
+thirty shillings, all the money he had in the world. He handed this
+hoard over to his new-found friend and promptly forgot all about it. He
+kept on teaching.
+
+I cite this little episode because it was the turning point in a great
+man's career. The boy who borrowed the shillings went to Australia.
+Several years later he returned the money and with it this message:
+"This is a great country full of opportunity for a young man. Chuck your
+teaching and come out here." Hughes went.
+
+Three months later--it was in 1884--and with half a crown in his pocket
+he walked ashore at Brisbane. He looked so frail that the husky dock
+labourers jeered at his physical weakness. Yet less than ten years from
+that date he was their militant leader marching on to the Rulership of
+all Australia.
+
+In those days Australia was a rough land. Beef, bullying and brawn were
+the things that counted most in that paradise of ticket-of-leave men.
+Hughes bucked the sternest game in the world and with it began a series
+of adventures that read like a romance and give a stirring background to
+the man's extraordinary public achievements.
+
+Hughes found out at once that all hope of earning a livelihood by
+teaching in the bush was out of the question. His money was gone: he had
+to exist, so he took the first job that came his way. A band of
+timber-cutters about to go for a month's sojourn in the woods needed a
+cook, so Hughes became their potslinger. Frail as he was, he seemed to
+thrive on hardship. In succession he became sheep shearer, railway
+labourer, boundary rider, stock runner, scrub-cleaner, coastal sailor,
+dishwasher in a bush hotel, itinerant umbrella-mender and sheep drover.
+
+With a small band he once brought fifty thousand sheep down from
+Queensland into New South Wales. For fifteen weeks he was on the tramp,
+sleeping at night under the stars, trudging the dusty roads all day. At
+the end of this trip occurred the incident that made him deaf. Over
+night he passed from the sun-baked plains to a high mountain altitude.
+Wet with perspiration, he slept out with his flocks and caught cold. The
+result was an infirmity which is only one of many physical handicaps
+that this amazing little man has had to overcome throughout his
+tempestuous life.
+
+Yet he has fought them all down. As he once humorously said: "If I had
+had a constitution I should have been dead long ago."
+
+After all his strenuous bushwhacking the year 1890 found him running a
+small shop in the suburbs of Sydney. By day he sold books and
+newspapers: at night he repaired locks and clocks in order to get enough
+money to buy law books. Into his shop drifted sailors from the wharves
+with their grievances. Born with a passionate love of freedom, these
+sounds of revolt were as music to his ears. Figuratively he sat at the
+feet of Henry George, whose "Progress and Poverty" helped to shape the
+course of his thinking. Lincoln's letters and speeches were among his
+favourites, too.
+
+One night a big dock bruiser grabbed a package of tobacco off the
+counter, but before he could move a step Hughes had caught him under the
+jaw with his fist. His burly associates cheered the game little
+shopkeeper. They now came to him with their troubles and he was soon
+their friend, philosopher and guide.
+
+For years the synonym for Australian Labour was strike. When the unions
+were merged into a national body Hughes was the unanimous choice of the
+husky stevedores for leader. He became the Great Restrainer. Never was
+influence of lip and brain over muscle and temper better demonstrated.
+The wild men of the wharves--the roughest crowd in all labour--were
+under his spell. This nimble-footed shopkeeper flouted them with his
+wit: ruled with his mind.
+
+On a certain occasion five hundred of them were crowded into a building
+at Sydney yelling bloody murder and clamouring for violence. Suddenly
+the tiny figure of Hughes appeared on the platform before them. At
+first they yelled him down, but he stood smiling, resolute, undaunted.
+He began to talk: the tumult subsided: he stepped forward, stamped his
+foot and said in a voice that reached to every corner:
+
+"You shall not strike." And they did not. David had defied the Goliaths.
+
+From that time on Hughes was the Brains of Australian Labour. He
+organised his industrial rough riders into a powerful and constructive
+union. With it he drove a wedge into the New South Wales Legislature and
+gave industry, for the first time, a seat in its Councils. He became its
+Parliamentary Voice. He was only thirty.
+
+Having got his foot in the doorway of public life, he now jammed the
+portal wide open. As trade union official he forged ahead. He became the
+Father Confessor of the Worker. His advice always was: "Avoid violence:
+put your faith in the ballot box." With this creed he tamed the Labour
+Jungle: through it he built up an industrial legislative group that
+acknowledged him as chief.
+
+Though he was rising to fame the struggle for existence was hard. No
+matter how late he toiled in legislative hall or union assembly, he
+read law when he got home. He was admitted to the bar, and despite his
+deafness he became an able advocate. When he had to appear in court he
+used a special apparatus with wire attachments that ran to the witness
+box and the bench and enabled him to hear everything that was going on.
+
+He became a journalist and contributed a weekly article to the Sydney
+_Telegraph_. An amusing thing happened. He noticed that remarkable
+statements began to creep into his articles when published. When he
+complained to the editor he discovered that the linotype operator who
+set up his almost indecipherable copy injected his own ideas when he
+could not make out the stuff.
+
+The limitation of a State Legislature irked Hughes. He beheld the vision
+of an Australian Commonwealth that would federate all those Overseas
+States. When the far-away dominions had been welded under his eloquent
+appeal into a close-knit Union, the fragile, deaf little man emerged as
+Attorney General. At last he had elbow room.
+
+It was due to his efforts that Australia got National Service, an
+Officers' School, ammunition factories, military training for
+schoolboys. They were all part of the kindling campaign that he waged to
+the stirring slogan of "Defence, not Defiance."
+
+Always the friend and champion of Labour, he was in the thick of
+incessant controversy. His enemies feared him: his friends adored him.
+He got a variety of names that ranged all the way from "Bush
+Robespierre" to the "Australian Abraham Lincoln."
+
+The Great War found Hughes the Strong Man of Australia, soon to be bound
+up in the larger Destiny of the Empire.
+
+Even before the Mother Country sent her call for help to the Children
+beyond the seas, Hughes had offered the gallant contingent that made
+history at the Dardanelles. Thanks to him, they were prepared. It was
+Hughes who sped the Anzacs on to Gallipoli: it was Hughes who, on his
+own responsibility, offered fifty thousand men more. These men were not
+in sight at the moment, but the intrepid statesman went forth that very
+day and started the crusade that rallied them at once.
+
+Hughes was moving fast, but faster moved the relentless course of the
+war. Gallipoli's splendid failure had been recorded, the Australians
+stood shoulder to shoulder with their British brothers in the French
+trenches when the opportunity which was to make him a world citizen
+knocked at his door.
+
+In October, 1915, Andrew Fisher resigned the Premiership of Australia to
+become High Commissioner in London, and Hughes was named as his
+successor. The puny lad who had landed at Brisbane thirty years before
+with half a crown in his pocket sat enthroned. The reins of power were
+his and he lost no time in lashing them.
+
+How he divorced the German from Australian trade: how he broke the
+Teutonic monopoly of the Antipodean metal fields and established the
+Australian Metal Exchange and made of it an Imperial institution for
+Imperial revenue only: how he swept England with a torrent of fervid
+oratory rousing the whole nation to its post-war commercial
+responsibilities, are all part of very recent history already woven into
+the fabric of this little volume.
+
+"Reconstruct or decay" was his admonition. Reluctantly the great mass
+of English people saw him leave their shores last summer. Already the
+demand for his recall as unofficial Speeder-up of Patriotism is
+simmering.
+
+What of the man behind this drama of almost unparalleled performance?
+
+To see Hughes in action is to get the impression of a human dynamo
+suddenly let loose. His face is keen and sharp: his mouth thin: his
+cheeks are shrunken: his arms and legs are long and he has a curious way
+of stuffing his clenched fists into his trousers pockets. Some one has
+called him the Mirabeau of the Australian Proletariat. Certainly he
+looks it. He has a nervous energy almost beyond belief. By birth,
+temperament, experience and point of view he is a firebrand, but with
+this difference: he is a Human Flame that reasons.
+
+Only Lloyd George surpasses him in force and fervour of eloquence. He
+has a marvellous trick of expression that never fails to make a winning
+appeal. His speeches are the Bible of the Australian worker, and they
+are fast becoming part of the Gospel of the wide-awake and progressive
+British wage-earner.
+
+Since he was the first Statesman of the Empire to appreciate the grave
+business responsibilities that will come with peace, it is interesting
+to get his ideas on the relation between Trade and Government. In one of
+his impassioned speeches in England he declared:
+
+"The relations between modern trade interests and national welfare are
+so intimate and complex that they cannot be treated as though they were
+not parts of one organic whole. No sane person now suggests that the
+foreign policy of the country should be dealt with by the
+_laissez-faire_ policy. No one would dare openly to contend that the
+national policy should be one of 'drift,' although I admit that there
+are many most excellent persons who by their attitude seem to resent any
+attempt to steer the ship of State along a definite course as being an
+impious attempt to usurp the functions of Providence, whose special
+business they conceive this to be.
+
+"I want to make one thing quite clear, that what I am advocating is not
+merely a change of fiscal policy, not merely or even necessarily what
+is called Tariff Reform--although this may, probably will, incidentally
+follow--but a fundamental change in our ideas of government as applied
+to economic and national matters. The fact is that the whole concept of
+modern statesmanship needs revision. But England has been, and is, the
+chief of sinners. Quite apart from the idea of a self-contained Empire
+there is the idea of Britain as an organized nation. And the British
+Empire as an organized Empire, organised for trade, for industry, for
+economic justice, for national defence, for the preservation of the
+world's peace, for the protection of the weak against the strong. That
+is a noble ideal. It ought to be--it must be--ours."
+
+An extract from another notable address will reveal his gift of words.
+Commenting on the frightful price in human life and treasure that the
+Empire was paying, he said:
+
+"Let us take this solemn lesson to heart. Let us, resolutely putting
+aside all considerations of party, class, and doctrine, without delay,
+proceed to devise a policy for the British Empire, a policy which shall
+cover every phase of our national, economic, and social life; which
+shall develop our tremendous resources, and yet be compatible with those
+ideals of liberty and justice for which our ancestors fought and died,
+and for which the men of our race now, in this, the greatest of all
+wars, are fighting and dying in a fashion worthy of their breeding.
+
+"Let us set sail upon a definite course as becomes a mighty nation to
+whom has been entrusted the destiny of one-fourth of the whole human
+race."
+
+Hughes is the most accessible of men. The humblest wharf-rustler in
+Australia hails him by his first name. A characteristic incident will
+show the comradeship that exists between this leader and his
+constituency.
+
+On his last visit to England he crossed over to France to visit the
+Australian troops at the front. He was walking through a trench
+accompanied by General Birdwood, who is Commander-in-Chief of the
+overseas contingent, and stopped to chat with a group of soldiers who
+had fought at Gallipoli. Suddenly a shell shrieked overhead. A Tommy
+from Sydney yelled to the Premier:
+
+"Duck, Billy, duck!"
+
+Here is practical democracy. Nowhere, in all the varied human side of
+the war, does it find more impressive embodiment than in the self-made
+little Australian whose life is a miracle of progress.
+
+Of such stuff as this are the Builders of the British To-morrow!
+
+
+THE END
+
+
+
+
+
+End of Project Gutenberg's The War After the War, by Isaac Frederick Marcosson
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+<pre>
+
+Project Gutenberg's The War After the War, by Isaac Frederick Marcosson
+
+This eBook is for the use of anyone anywhere at no cost and with
+almost no restrictions whatsoever.  You may copy it, give it away or
+re-use it under the terms of the Project Gutenberg License included
+with this eBook or online at www.gutenberg.org
+
+
+Title: The War After the War
+
+Author: Isaac Frederick Marcosson
+
+Release Date: May 12, 2006 [EBook #18380]
+
+Language: English
+
+Character set encoding: ISO-8859-1
+
+*** START OF THIS PROJECT GUTENBERG EBOOK THE WAR AFTER THE WAR ***
+
+
+
+
+Produced by Irma Špehar, Martin Pettit and the Online
+Distributed Proofreading Team at http://www.pgdp.net (This
+file was produced from images generously made available
+by The Internet Archive/Canadian Libraries)
+
+
+
+
+
+
+</pre>
+
+
+<h1>THE WAR AFTER THE WAR</h1>
+
+<p class="center"><img src="images/003.png" width='454' height='700' alt="(signed) Let freedom win D Lloyd George" /></p>
+
+<p class='tbrk'>&nbsp;</p>
+
+<h1>THE WAR<br />AFTER THE WAR</h1>
+
+<h3>BY</h3>
+
+<h2>ISAAC F. MARCOSSON</h2>
+
+<h4>CO-AUTHOR OF "CHARLES FROHMAN, MANAGER AND MAN"<br />
+AUTHOR OF "THE AUTOBIOGRAPHY OF A CLOWN," ETC.</h4>
+
+<p class='tbrk'>&nbsp;</p>
+
+<h3>NEW YORK: JOHN LANE COMPANY<br />
+LONDON: JOHN LANE, THE BODLEY HEAD<br />
+TORONTO: S.B. GUNDY : : : MCMXVII</h3>
+
+<hr class='smler' />
+
+<p class='tbrk'>&nbsp;</p>
+
+<h4><span class="smcap">Copyright, 1916, by The Curtis Publishing Company<br />
+Copyright, 1916, by The Ridgway Company</span></h4>
+
+<hr class='smler' />
+
+<h4>Copyright, 1917,<br />
+<span class="smcap">By John Lane Company</span></h4>
+
+<p class='tbrk'>&nbsp;</p>
+
+<h4>Press of<br />
+J. J. Little &amp; Ives Company<br />
+New York, U.S.A.</h4>
+
+<hr class='smler' />
+
+<p class='tbrk'>&nbsp;</p>
+
+<h3>TO</h3>
+
+<h2>LORD NORTHCLIFFE</h2>
+
+<h3>IN GRATEFUL APPRECIATION</h3>
+
+<p class='tbrk'>&nbsp;</p>
+
+<hr />
+<h2><i>CONTENTS</i></h2>
+
+<div class="index">
+<ul>
+<li><span class="mono">CHAPTER</span></li>
+<li><span class="mono">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</span>&nbsp; &nbsp;<a href="#FOREWORD"><span class="smcap">Foreword</span></a></li>
+<li><span class="mono">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#I_The_Coming_War">I.</a></span>&nbsp; &nbsp;<span class="smcap">The Coming War</span></li>
+<li><span class="mono">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#II_England_Awake">II.</a></span>&nbsp; &nbsp;<span class="smcap">England Awake</span></li>
+<li><span class="mono">&nbsp;&nbsp;&nbsp;&nbsp;<a href="#III_American_Business_in_France">III.</a></span>&nbsp; &nbsp;<span class="smcap">American Business in France</span></li>
+<li><span class="mono">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#IV_The_New_France">IV.</a></span>&nbsp; &nbsp;<span class="smcap">The New France</span></li>
+<li><span class="mono">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#V_Saving_for_Victory">V.</a></span>&nbsp; &nbsp;<span class="smcap">Saving for Victory</span></li>
+<li><span class="mono">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#VI_The_Price_of_Glory">VI.</a></span>&nbsp; &nbsp;<span class="smcap">The Price of Glory</span></li>
+<li><span class="mono">&nbsp;&nbsp;&nbsp;&nbsp;<a href="#VII_The_Man_Lloyd_George">VII.</a></span>&nbsp; &nbsp;<span class="smcap">The Man Lloyd George</span></li>
+<li><span class="mono">&nbsp;&nbsp;&nbsp;<a href="#VIII_From_Pedlar_to_Premier">VIII.</a></span>&nbsp; &nbsp;<span class="smcap">From Pedlar to Premier</span></li>
+</ul>
+</div>
+
+<hr />
+<p><span class='pagenum'><a name="Page_7" id="Page_7">[Pg 7]</a></span></p>
+<h2><a name="FOREWORD" id="FOREWORD"></a><i>FOREWORD</i></h2>
+
+<p>For nearly three years Europe has been drenched with blood and rent with
+bitter strife. Millions of men have been killed or maimed: billions of
+dollars in property have gone up in smoke and ruin&mdash;all part of the
+mighty sacrifice laid on the Altar of the Great War.</p>
+
+<p>This tragic tumult must inevitably subside. The smoke of battle will
+clear: the scarred fields will mantle again with springtime verdure: the
+fighting hosts will once more find their way to peaceful pursuit. Time
+the Healer will wipe out the wounds of war.</p>
+
+<p>The world already wearies of the Crimson Canvas splashed with martial
+scene. Heroism has become the most commonplace of qualities: it takes a
+monster thrill to move a civilisation sick of destruction. With eager
+eye it looks forward to the era of regeneration. War ends some time.</p>
+
+<p>Business never ceases. Under the shock of mighty upheaval it has been
+dislocated<span class='pagenum'><a name="Page_8" id="Page_8">[Pg 8]</a></span> by the most drastic strain ever put upon the economic
+fabric. But it will march on long after Peace will have mercifully
+sheathed the Sword. Therefore the permanent world problem is the
+Business problem.</p>
+
+<p>This is why I made two trips to Europe: why I submit this little book in
+the hope that it may point the way to some realisation of the immense
+responsibilities which will inevitably crowd upon the world and more
+especially upon the United States.</p>
+
+<p>Peace will be as great a shock as War. Hence the need of Preparedness to
+meet the inevitable conflict for Universal Trade. We&mdash;as a nation&mdash;are
+as unready for this emergency as we are to meet the clash of actual
+physical combat. Commercial Preparedness is as vital to the national
+well being as the Training for Arms.</p>
+
+<p>Nor will Commerce be the only thing that we will have to reckon with.
+When you have heard the guns roar and watched horizons flame with fury
+and seen men go to their death smiling and unafraid; when the pitiless
+panorama of carnage has passed before you in terms of terror and
+tragedy, you realise that there is something human as<span class='pagenum'><a name="Page_9" id="Page_9">[Pg 9]</a></span> well as economic
+in the relentless Thing called War.</p>
+
+<p>It means that just as there was no compromise with dishonour in the
+approach to the Super-Struggle for which nations are pouring out their
+youth and fortune, so will there be no flinching in that coming contest
+for commercial mastery&mdash;the bloodless aftermath of History's deadliest
+and costliest war.</p>
+
+<p>We have reached a place in the World Trade Sun. Unless we are ready to
+hold it we will slip into the Shadow.</p>
+
+<p>We must prepare.</p>
+
+<p class='right'>I. F. M.</p>
+
+<hr />
+<p class='tbrk'>&nbsp;</p>
+
+<h1>THE WAR AFTER THE WAR</h1>
+
+<p class='tbrk'>&nbsp;</p>
+
+<hr />
+<p><span class='pagenum'><a name="Page_15" id="Page_15">[Pg 15]</a></span></p>
+<h2><a name="I_The_Coming_War" id="I_The_Coming_War"></a>I&mdash;<i>The Coming War</i></h2>
+
+<p>While the guns roar from the North Sea to the Mediterranean, and the
+greatest armed host that history has ever known is still locked in a
+life-and-death struggle on a dozen fronts, another war, more potent and
+permanent perhaps than the one which now engulfs Europe, lurks beyond
+the distant horizon of peace.</p>
+
+<p>Its fighting line will be the boundaries of all human needs; its dynamic
+purpose a heroic rehabilitation after stupendous loss. It will be the
+far-flung struggle for the rich prize of International Trade, waiting at
+the end of the Crimson Lane that sooner or later will have a turning.</p>
+
+<p>Embattled commercial groups will supplant embroiled nations; boycotts,
+discriminations and exclusions will succeed the strategies of line and
+trench; the animosities fought out to-day with shell and steel will have
+their heritage in ruthless rivalries.</p>
+
+<p>How shall we fare in this tumult of tariff<span class='pagenum'><a name="Page_16" id="Page_16">[Pg 16]</a></span> and treaty? Where shall we
+stand when the curtain of fire fades before a task of regeneration that
+will spell economic rebirth or disaster for millions? Will fiscal
+punishment be meted out to neutral and foe alike? Will reason rule or
+revenge dictate a costly reprisal in this war after the war?</p>
+
+<p>These are the questions that rise out of the dust and din of the
+colossal upheaval which is rending half of the world. Directly or
+indirectly they touch the whole American people, regardless of rank or
+wealth. The tide of war has rolled us far upon the shores of world
+affairs. We have prospered in the kinship of the nations. Will the ebb
+of peace leave us high and dry amid a mighty isolation?</p>
+
+<p>I went to England and France to study this problem at first hand. I
+interviewed Cabinet Ministers; I talked with lawmakers, soldiers,
+captains of capital, masters of industry, and plain, everyday business
+men. Often the talk was disturbed by shriek of shell or bomb of midnight
+Zeppelin marauder.</p>
+
+<p>Through all the travail of debt and death that rends the allied peoples
+runs the clear<span class='pagenum'><a name="Page_17" id="Page_17">[Pg 17]</a></span> current of determination to retrieve the immense loss.
+War is waste; some one must pay&mdash;we among the rest. Already the guns are
+being trained for the inevitable commercial battle, which, willingly or
+unwillingly, will bring us under fire. Let us examine the plan of
+campaign.</p>
+
+<p>But before going into the concrete details that mean so much to our
+future and our fortune, it is important to understand some very
+essential conditions.</p>
+
+<p>First and foremost is the uncertainty of the war itself. All
+prophecy&mdash;at best a dangerous thing&mdash;is purest speculation. No one can
+tell how long the duel will last; how badly the loser will be beaten;
+what the terms of peace will be. Yet out of these contingencies will
+emerge the strong hands that will redraw the trade map of the world.
+Whatever the outcome, the countries now fighting, especially the Allies,
+have definitely stated the principles that must govern&mdash;for a long time,
+at least&mdash;the whole realignment of commercial relations. Their way shall
+be the universal way.</p>
+
+<p>In the second place, be you Ally or Teuton and regardless of how you may
+feel about<span class='pagenum'><a name="Page_18" id="Page_18">[Pg 18]</a></span> the ethics of the Great Struggle, it must be remembered that
+behind the glamour as to whether it is waged to conserve human liberty,
+maintain the integrity of "scraps of paper" or to safeguard democracy,
+the larger fact remains that it is a war rooted in commercial jealousies
+and fanned by commercial aggressions.</p>
+
+<p>Now we come to the really vital point, and it is this: When the guns are
+hushed you will find that national and industrial defence among the
+warring countries will be one and the same thing. The Allies learned to
+their cost that the economic advance of Germany was merely part of her
+one-time resistless military machine. Her trade and her preparedness
+went conqueringly hand in hand. Henceforth that game will be played by
+all. England, for instance, will manufacture dyestuffs not only for her
+textile trades, but because coal-tar products are essential to the
+making of high explosives.</p>
+
+<p>Thus, Competition, which was once merely part of the natural progress of
+a country, will hereafter be a large part of the struggle for national
+existence.</p>
+
+<p>There is still another factor: No matter<span class='pagenum'><a name="Page_19" id="Page_19">[Pg 19]</a></span> who wins, peace must mean
+prosperity for everybody. For the victor it will take the form of an
+attempted stewardship of trade and navigation; for the vanquished it
+will be the dedication of a terrible energy to the twin restoration of
+pride and product.</p>
+
+<p>Now you begin to see why it is up to the United States to make ready for
+whatever business fate awaits her beyond the uncertain frontiers of
+to-morrow. Nor have we been without warning of what may be in store for
+us. Prohibitive tariffs, blacklists and boycotts, embargoes on mail and
+cargo, the exclusion from England and France of hundreds of our
+manufactured articles&mdash;all show which way the international trade winds
+may blow when the belligerents begin to take toll of their losses.
+Meantime, what are the facts?</p>
+
+<p>Take the case of England. Thirty years ago she was the workshop of the
+world. From the Tyne to the Thames her factories hummed with ceaseless
+industry. Her goods went wherever her ships steamed, and that meant the
+globe. Supreme in her insularity&mdash;at once her defence and her
+undoing&mdash;she became infected with the virus of con<span class='pagenum'><a name="Page_20" id="Page_20">[Pg 20]</a></span>tent. Her steel was
+the best steel; her wares led all the rest. "Take it or leave it!" was
+her selling maxim. When devices came along that saved labour and
+increased production she refused to scrap the old to make way for the
+new. Born, too, was the evil of restricted output. Moss began to grow on
+her vaunted industrial structure. England lagged in the trade
+procession.</p>
+
+<p>But as she lagged the assimilative German streamed in through her
+hospitable door. He served his apprenticeship in British mills; took
+home the secrets and methods of British art and craft. He geared them to
+cheap labour, harnessed product to masterful distribution, and became a
+World Power. Before long he had annexed the dye trade; was competing
+with British steel; was making once-cherished British goods.</p>
+
+<p>What the German did in England he duplicated elsewhere. The world of
+ideas was his field and, with insatiate hunger, he garnered them in. He
+cunningly acquired the sources of raw supply, especially the essentials
+to national defence; for he overlooked nothing. All was grist to his
+mills. He pitched his tents upon debatable trade lands.<span class='pagenum'><a name="Page_21" id="Page_21">[Pg 21]</a></span> His rivals
+called it economic penetration, because he invariably took root. For him
+it was merely good business.</p>
+
+<p>Then England suddenly realised that Germany had left her behind in the
+race for international commerce. Indifference lay at the root of this
+backsliding. It was easier and cheaper to buy the German-made product
+and reship it than to produce the same article at home. Sloth hung like
+a chain on English energy. What did it matter? No forest of bayonets
+hemmed her in; she was still Mistress of the Seas.</p>
+
+<p>Meantime Germany dripped with efficiency and ached with expansion. Her
+amazing teamwork between state and business, stimulated by an interested
+finance, drove her on to a place in the sun. The shadows seemed far away
+when the great war crashed into civilisation. Then England woke to the
+folly of her blindness. The mystery of coal-tar products was shut up in
+a German laboratory; the secrets of tungsten, necessary to the toughest
+steel, were imprisoned in a Teutonic mill; and so on down a long list of
+products vital to industry and defence.<span class='pagenum'><a name="Page_22" id="Page_22">[Pg 22]</a></span></p>
+
+<p>Even those early and tragic reverses of the war did not stir the stolid
+British bulk. Men fought for a chance to fight; restriction still
+oppressed factory output. Red tape vied with tradition to block the path
+of military and industrial preparation.</p>
+
+<p>Then the Lion stirred; the sloth fell away; men and munitions were
+enlisted; the strong hand was put on labour tyranny; conscription
+succeeded the haphazard voluntary system. Britain got busy and she has
+buzzed ever since.</p>
+
+<p>When the kingdom had become a huge arsenal; when the old sex differences
+vanished under the touchstone of a common peril; when the first khaki
+host swept to its place in the battle line, and the grey fleets were
+once more queens of the seas, England turned to the task of commercial
+rebuilding, once neglected, but thenceforth to be part and parcel of
+British purpose.</p>
+
+<p>Animating this purpose, stirring it like a vast emotion, was the New
+Battle Cry of Empire&mdash;the kindling Creed of United Dominions,
+consecrated to the economic mastery of the world.</p>
+
+<p>But this revival was not an overnight per<span class='pagenum'><a name="Page_23" id="Page_23">[Pg 23]</a></span>formance. If you know England
+you also know that it takes a colossal jolt to stir the British mind.
+The war had been in full swing for over a year and the countryside was
+an armed camp before the realisation of what might happen commercially
+after the war soaked into the average islander's consciousness.</p>
+
+<p>Under the impassioned eloquence of Lloyd George the munition workers had
+been marshalled into an inspired working host; with the magic of
+Kitchener's name, the greatest of all voluntary armies came into being.
+But it remained for Hughes, of Australia, to point out the fresh path
+for the feet of the race.</p>
+
+<p>Who is Hughes, of Australia? You need not ask in England, for the story
+of his advent, the record of his astounding triumph, the thrilling
+message that he left implanted in the British breast, constitute one of
+the miracles of a war that is one long succession of dramatic episodes.
+This Colonial Prime Minister arrived unknown: he left a popular hero.</p>
+
+<p>Thanks to him, Australia was prepared for war; and when the Mother
+Lioness sent<span class='pagenum'><a name="Page_24" id="Page_24">[Pg 24]</a></span> out the world call to her cubs beyond the seas there was
+swift response from the men of bush and range. The world knows what the
+Anzacs did in the Dardanelles; how they registered a monster heroism on
+the rocky heights of Gallipoli; gave a new glory to British arms.</p>
+
+<p>England rang with their achievements. What could she do to pay tribute
+to their courage? Hughes was their national leader and spokesman; so the
+Political Powers That Be said:</p>
+
+<p>"Let us invite the Premier to sit in the councils of the empire and
+advise us about our future trade policy."</p>
+
+<p>Already Hughes had declared trade war on Germany in Australia. Under his
+leadership every German had been banished from commonwealth business; by
+a special act of Parliament the complete and well-nigh war-proof
+Teutonic control of the famous Broken Hill metal fields had been
+annulled. He stood, therefore, as a living defiance to the renewal of
+all commercial relations with the Central Powers. But he went further
+than this: He decreed trade extermination of the enemy&mdash;merciless war
+beyond the war.<span class='pagenum'><a name="Page_25" id="Page_25">[Pg 25]</a></span></p>
+
+<p>With his first speech in England Hughes created a sensation. Before he
+came commercial feeling against Germany ran high. Hughes crystallised it
+into a definite cry. He said what eight out of every ten men in the
+street were thinking. His voice became the Voice of Empire. Up and down
+England and before cheering crowds he preached the doctrine of trade war
+to the death on Germany. He denounced the laxness that had permitted the
+"German taint to run like a cancer through the fair body of English
+trade"; he urged complete economic independence of the Dominions. His
+persistent plea was, "We must have the fruits of victory"; and those
+fruits, he declared, comprised all the trade that Germany had hitherto
+enjoyed, and as much more as could be lawfully gained.</p>
+
+<p>He urged that the blood brotherhood of empire, quickened by that
+dramatic S.O.S. call for men across the sea and cemented by the common
+trench hazard, be followed by a union of empire after the war that
+should be self-sufficient. Behind all this eloquent talk of protection
+and prohibition lay the first real menace to America's new<span class='pagenum'><a name="Page_26" id="Page_26">[Pg 26]</a></span> place as a
+world trade power. It was the opening call to arms for the war after the
+war.</p>
+
+<p>Hughes did more than set England to thinking in imperial terms. He upset
+most of the calculations of the Powers That Be who invited him. They
+expected an amiable, able and plastic counsellor; they got an oratorical
+live wire, who would not be ruled, and who shocked deep-rooted
+free-trade convictions to the core. He helped to launch a whole new era
+of thought and action; and the next chapter of its progress was now to
+be recorded under circumstances pregnant with meaning for the whole
+universe of trade.</p>
+
+<p>The second winter of war had passed, and with it much of the dark night
+that enshrouded the Allies' arms. On land and sea rained the first blows
+of the great assaults that were to make a summer of content for the
+Entente cause. Its arsenals teemed with shells; its men were fit;
+victory, however distant, seemed at last assured. The time had come to
+prepare a new kind of drive&mdash;the combined attack upon enemy trade and
+any other that happened to be in the way.<span class='pagenum'><a name="Page_27" id="Page_27">[Pg 27]</a></span></p>
+
+<p>Thus it came about that on a brilliant sun-lit day last June twoscore
+men sat round a long table in a stately room of a palace that overlooked
+the Seine, in Paris. Eminent lawmakers&mdash;Hughes, of Australia, among
+them&mdash;were there aplenty; but few practical business men.</p>
+
+<p>On the walls hung the trade maps of the world; spread before them were
+the red-dotted diagrams that showed the water highways where traffic
+flowed in happier and serener days. For coming generations of business
+everywhere it was a fateful meeting because the now famous Economic
+Conference of the Allies was about to reshape those maps and change the
+channels of commerce.</p>
+
+<p>All the while, and less than a hundred miles away, Verdun seethed with
+death; still nearer brewed the storm of the Somme.</p>
+
+<p>These men were assembled to fix the price of all this blood and
+sacrifice, and they did. In what has come to be known as the Paris Pact
+they bound themselves together by economic ties and pledged themselves
+to present a united economic front. They unfurled the banner of
+aggressive reprisal with the<span class='pagenum'><a name="Page_28" id="Page_28">[Pg 28]</a></span> sole object of crushing the one-time
+business supremacy of their foes.</p>
+
+<p>The chief recommendations were: To meet, by tariff discrimination,
+boycott or otherwise, any individual or organised trade advance of the
+Central Powers&mdash;already Germany, Austria, Turkey and Bulgaria have
+reached a commercial understanding; to forego any "favoured-nation"
+relation with the enemy for an indefinite period; to conserve for
+themselves, "before all others," their natural resources during the
+period of reconstruction; to make themselves independent of enemy
+countries in the raw materials and manufactured products essential to
+their economic well-being; and to facilitate this exchange by
+preferential trade among themselves, and by special and state subsidies
+to shipping, railroads and telegraphs. Another important decree
+prohibits the enemy from engaging in certain industries and professions,
+such as dyestuffs, in allied countries when these industries relate to
+national defence or economic independence.</p>
+
+<p>In short, self-sufficiency became the aim of the whole allied group, to
+be achieved<span class='pagenum'><a name="Page_29" id="Page_29">[Pg 29]</a></span> without the aid or consent of any other nation or group of
+nations, be they friends or foes.</p>
+
+<p>Here, then, is the strategy that will rule after the war. A huge allied
+monopoly is projected&mdash;a sort of monster militant trust, with cabinets
+of ministers for directorates, armies and navies as trade scouts, and
+whole roused citizenships for salesmen.</p>
+
+<p>Throughout this new Bill of World Trade Rights there is scant mention of
+neutrals&mdash;no reference at all to the greatest of non-belligerent
+nations. Yet the document is packed with interest, fraught even with
+highest concern, for us. Upon the ability to be translated into
+offensive and defensive reality will depend a large part of our future
+international commercial relations.</p>
+
+<p>Is the Paris Pact practical? Will it withstand the logical pressure of
+business demand and supply when the war is ended? How will it affect
+American trade?</p>
+
+<p>To try to get the answer I talked with many men in England and France
+who were intimately concerned. Some had sat in the conference; others
+had helped to shape its approach; still others were dedicated to its<span class='pagenum'><a name="Page_30" id="Page_30">[Pg 30]</a></span>
+far-spreading purpose. I found an astonishing conflict of opinion. Even
+those who had attended this most momentous of all economic conferences
+were sceptical about complete results. Yet no one questioned the intent
+to smash enemy trade. Will our interests be pinched at the same time?</p>
+
+<p>Regardless of what any European statesman may say to the contrary, one
+deduction of supreme significance to us arises out of the whole
+proposition. Summed up, it is this:</p>
+
+<p>Mutual preference by or for the members of either of the great European
+alliances automatically creates a discrimination against those outside!
+Whether we face the Teuton or the Allies' group&mdash;or both&mdash;in the grand
+economic line-up, we shall have to fight for commercial privileges that
+once knew no ban.</p>
+
+<p>There are two well-defined beliefs about the practical working out of
+the pact as a pact. Let us take the objections first. They find
+expression in a strong body of opinion that the whole procedure is both
+unhuman and uneconomic&mdash;a campaign document, as it were, conceived in
+the heat and passion of<span class='pagenum'><a name="Page_31" id="Page_31">[Pg 31]</a></span> a great war, projected for political effect in
+cementing the allied lines. In short, it is what business men would call
+a glorified and stimulated "selling talk," framed to sell good will
+between the nations that now propose to carry war to shop and mill and
+mine.</p>
+
+<p>"But," as a celebrated British economist said to me in London, "while
+all this talk of Economic Alliance sounds well and is serving its
+purpose, the fact must not be overlooked that, though war ends, business
+keeps right on. Self-interest will dictate the policy that pays the
+best." This is a typical comment.</p>
+
+<p>Now we get to the meat of the matter: By the terms of the pact half a
+dozen important nations&mdash;to say nothing of the smaller fry&mdash;are bound to
+a hard-and-fast trade agreement. Business, in brief, is projected in
+terms of nations.</p>
+
+<p>Go behind this new battle front and you will find that it conflicts with
+an uncompromising commercial rule. Why? Simply because, so far as
+business is concerned, nations may propose, but human beings dispose.
+Individuals, not countries, do business! Being human, these individuals
+are<span class='pagenum'><a name="Page_32" id="Page_32">[Pg 32]</a></span> apt to follow the line of least resistance. Hence, the best-laid
+plans for imposing international industrial teamwork are likely to
+founder on those weaknesses of human nature that begin and end in the
+pocketbook.</p>
+
+<p>After the Franco-Prussian War of 1870-71, and while the Peace of
+Versailles was being negotiated, commercial travellers of each nation,
+laden with samples, filled the border villages, ready to dash across the
+frontier and open accounts. Of course no one dreams that such history
+will repeat itself after the present war; but there are many persons in
+England and France to-day who contend that the business needs of peace
+will be stronger than the costly hang-over of wartime passions.</p>
+
+<p>Trade, after all, is a Colossus that rests with one foot upon Necessity
+and the other foot upon Convenience.</p>
+
+<p>Will the Allies be such valued commercial helpmates to each other?
+Perhaps not. When this war is over the fighting countries will be
+impoverished by years of drain and waste. As a result, they will be
+poorer customers for each other, but very sharp com<span class='pagenum'><a name="Page_33" id="Page_33">[Pg 33]</a></span>petitors.
+International trade is merely an exchange of goods for goods. You cannot
+sell without buying, and vice versa. No groups of nations can live by
+taking in each other's washing. They are bound to get outside linen.
+When peace comes we shall have the lending and purchasing power of the
+world. Can anybody afford to shut us out?</p>
+
+<p>Again: Can the Allies present a united front or carry on a uniform line
+of conduct? Will not their interests overlap and cause an inevitable
+conflict, even when intentions are of the very best?</p>
+
+<p>France, for example, competes with England in chemicals, surgical
+instruments, high-speed tools, scores of things; Russia's competitors in
+wheat are not Germany, but Canada, India and Australia; Italy and France
+are rivals for the same wine markets. Russia for years has kept down the
+high cost of her living by buying cheap German goods at her front door
+and having her projects financed by German capital. Will she face
+bankruptcy by going hundreds&mdash;even thousands&mdash;of miles out of her way
+and paying more for products? England for years has<span class='pagenum'><a name="Page_34" id="Page_34">[Pg 34]</a></span> made huge profits
+out of the re-export of Teutonic articles, thanks to the grace of free
+trade and huge carrying power. Is she likely to forego all this?</p>
+
+<p>In the last analysis Propinquity and the Purse are the Mothers of Trade
+Alliance.</p>
+
+<p>Finally, will not any organised exclusion of German products, coupled
+with a definite and organised campaign to throttle German trade the
+world over, throw the business of the Kaiser's country smack into the
+lap of the United States? Sober reflection over these possibilities may
+stay economic reprisal.</p>
+
+<p>On the other hand, there are many ways by which even a near translation
+of the economic pact into actuality may work hardship&mdash;even disaster&mdash;to
+American commercial interests. No matter which way we turn when peace
+comes we shall face the proverbial millstones in the shape of two great
+alliances. One is the Allied Group, jealous of our new wealth and world
+power, bitter with the belief that we have coined gold out of agony; the
+other is the Teutonic Union, smarting because of our aid to its
+enemies,<span class='pagenum'><a name="Page_35" id="Page_35">[Pg 35]</a></span> stinging under reverses, mad with a desire to recuperate.</p>
+
+<p>Examine our trade relations with warring Europe and you see how
+hazardous a shift in old-time relations would be. To the fighting
+peoples and their colonies in normal times we send nearly seventy-eight
+per cent of our exports, and from them we derive seventy per cent of our
+exports. The Allies alone, principally England and her colonies, get
+sixty-three per cent of these exports and send us fifty-four per cent of
+all we get from foreign lands.</p>
+
+<p>As the National Foreign-Trade Council of the United States points out:
+"Any sweeping change of tariff, navigation or financial policy on the
+part of either group of the Allies, and particularly on the part of the
+Entente Allies, may seriously affect the domestic prosperity of the
+United States, in which foreign trade is a vital element."</p>
+
+<p>Why is this foreign trade so vital? Because, during these last two years
+of world upheaval we have rolled up the immense favourable trade balance
+of over three billion dollars. In peace time this would be paid for in
+merchandise. But fighting<span class='pagenum'><a name="Page_36" id="Page_36">[Pg 36]</a></span> Europe's industries, with the exception of a
+part of England's, are mobilised for munitions. Therefore, these goods
+have been paid for largely in gold.</p>
+
+<p>This gold is now part of our basis of credit. When the war ends Europe
+will make every effort that ingenuity, backed up by trade resource, can
+devise to get that gold back. One way is through loans from us; the
+other is by exports to us. Now you see why we must maintain our foreign
+commerce.</p>
+
+<p>Our huge gold reserve hides another menace: The war demands for our
+commodities, paid for with the yellow metal, have increased the cost of
+production; and it will stay up. This will lead to an unequal
+competition with the cheap labour markets of Europe when the war is
+over. Both groups of Allies will be able to undersell us.</p>
+
+<p>Turn to the raw materials and you encounter a further danger in the
+economic pact. If the Allies develop their own sources, it will cut down
+our export of cotton, copper and oil. If they cannot develop sufficient
+sources for self-supply they may, through co-operative buying outside<span class='pagenum'><a name="Page_37" id="Page_37">[Pg 37]</a></span>
+their dominions, satisfy their needs. In the third place, they may
+stimulate, through tariff or shipping concessions, or by
+subsidies&mdash;which are much talked of in Europe to-day&mdash;a preference for
+their own manufactures over American products in both allied and neutral
+markets.</p>
+
+<p>Take navigation: England controls an immense shipping. As a matter of
+fact, outside the three-mile limit, she practically owns the waters of
+the world. If she makes lower rates for her allies, or others to whom
+she gives preference, where shall we be in our chronic and unpardonable
+dependence upon foreign bottoms? Here is where we shall pay the price
+for neglecting our merchant marine.</p>
+
+<p>Still another menace to our trade lies in preferential alliances between
+Mother Countries and their colonies, which is part of the projected
+programme. Our next-door neighbour, Canada, has just given an
+illuminating instance of what may be in store for us. A Co-operative
+Export Association has been formed in the Dominion to get business
+throughout the British Empire and the other allied nations. In the
+circular announcing<span class='pagenum'><a name="Page_38" id="Page_38">[Pg 38]</a></span> its organisation it declares that "the products of
+Canada will be preferred against the products of her great neutral
+competitor, the United States, who has stayed outside of the war and has
+borne no sacrifice of life and money made by the allied countries."</p>
+
+<p>Return to the economic pact again and you find that it continues to
+bristle with dangerous possibilities for us. You will recall that one of
+the clauses forbids the resumption of a favoured-nation arrangement with
+enemy countries for a period "to be fixed by mutual agreement." This may
+be for an indefinite time.</p>
+
+<p>Now the danger here lies in the European interpretation of the
+favoured-nation idea. To quote an authority: "Most of these countries
+have treaties under which each must grant most-favoured-nation treatment
+to the other; and this means that a reduction in duties granted to one
+country is automatically extended to all other countries with whom such
+treaties exist. The result is that the lowest rate in any treaty
+becomes, with exception, the rate extended to all countries."</p>
+
+<p>We have the favoured-nation relation with<span class='pagenum'><a name="Page_39" id="Page_39">[Pg 39]</a></span> many European countries, and
+herein lies the possible danger: The war automatically annulled all
+treaties between belligerents. When the day of treaty making comes again
+shall we suffer for the sins of friend and foe in the rearrangement of
+international trade and lose some precious commercial privileges? It is
+worth thinking about.</p>
+
+<hr />
+<p><span class='pagenum'><a name="Page_40" id="Page_40">[Pg 40]</a></span></p>
+<h2><a name="II_England_Awake" id="II_England_Awake"></a>II&mdash;<i>England Awake</i></h2>
+
+
+<p>Meantime, regardless of how the economic pact works out, England's
+policy is "Deeds, not Words," as she prepares for the time when normal
+life and business succeed the strain and frenzy of fighting days.</p>
+
+<p>No man can range up and down the British Isles to-day without catching
+the thrill of a galvanic awakening, or feeling an imperial heartbeat
+that proclaims a people roused and alive to what the future holds and
+means. The kingdom is a mighty crucible out of which will emerge a new
+England determined to come back to her old industrial authority. It is
+with England that our commerce must reckon; it is English competition
+that will grapple with Yankee enterprise wherever the trade winds blow.</p>
+
+<p>There are many reasons why. "For England," as one man has put it,
+"victory must mean prosperity. However triumphant she may be in arms,
+her future lies in a preeminence in world industries. Through it<span class='pagenum'><a name="Page_41" id="Page_41">[Pg 41]</a></span> she
+will rise as an empire or sink to a second-rate nation."</p>
+
+<p>In the second place, as all hope of indemnity fades, England realises
+that she will not only have to pay all her own bills but likewise some
+of the bills of her allies. Already her millions have been poured into
+the allied defence; many more must follow.</p>
+
+<p>Hence, the relentless energy of her throbbing mills; the searching
+appraisal of her resources; the marshalling of all her genius of trade
+conquest. Dominating all this is the kindling idea of a self-contained
+empire, linked with the slogan: "Home Patronage of Home Product." The
+war found her unprepared to fight; she is determined that peace shall
+see her fit for economic battle.</p>
+
+<p>This is what she is doing and every act has a meaning all its own for
+us. Take Industry: Forty-eight hundred government-controlled factories,
+working day and night, are sending out a ceaseless flood of war
+supplies. The old bars of restricted output are down; the old sex
+discrimination has faded away. Women are doing men's work, getting men's
+pay, making themselves useful and necessary cogs in the productive
+ma<span class='pagenum'><a name="Page_42" id="Page_42">[Pg 42]</a></span>chine. They will neither quit nor lose their cunning when peace
+comes.</p>
+
+<p>I have watched the inspiring spectacle of some of these factories, have
+walked through their forest of American-made automatics, heard the hum
+of American tools as they pounded and drilled and ground the instruments
+of death. What does it signify? This: that quantity output of shot and
+shell for war means quantity output of motors and many other products
+for peace. You may say that quantity output is a matter of temperament
+and that the British nature cannot be adapted to it; but speeded-up
+munitions making has proved the contrary. The British workman has
+learned to his profit that it pays to step lively. High war wages have
+accustomed him to luxuries he never enjoyed before, and he will not give
+them up. Unrestricted output has come to stay.</p>
+
+<p>Five years ago the efficiency expert was regarded in England as an
+intruder and a quack; to use a stop watch on production was high crime
+and treason. To-day there are thousands of students of business science
+and factory management. In the spinning<span class='pagenum'><a name="Page_43" id="Page_43">[Pg 43]</a></span> district girls in clogs sit
+alongside their foremen listening to lectures on how to save time and
+energy in work. Scores of old establishments are being reborn
+productively. There is the case of a famous chocolate works that before
+the war rebuffed an instructor in factory reorganisation. Last year it
+saw the light, hired an American expert, and to-day the output has been
+increased by twenty-five per cent.</p>
+
+<p>The infant industries, growing out of the needs of war and the desire of
+self-sufficiency, are resting on the foundations of the new creed.
+"Speed up!" is the industrial cry, and with it goes a whole new scheme
+of national industrial education. The British youth will be taught a
+trade almost with his A-B-C's.</p>
+
+<p>Formerly in England the standardisation of plan and product was almost
+unknown. For example, no matter how closely ships resembled each other
+in tonnage, structure or design, a separate drawing was made for each.
+Now on the Clyde the same specifications serve for twenty vessels.
+England has gone into the wholesale production; and what is true of
+ships in the stress of hungry<span class='pagenum'><a name="Page_44" id="Page_44">[Pg 44]</a></span> war demand will be true of scores of
+articles for trade afterward. The old rule-of-thumb traditions that
+hampered expansion have gone into the discard, along with voluntary
+military service and the fetish of free trade.</p>
+
+<p>Typical of the new methods is the standardisation of exports, which have
+increased steadily during the past year. In a room of the Building of
+the Board of Trade, down in Whitehall, and where the whole trade
+strategy of the war is worked out, I saw a significant diagram, streaked
+with purple and red lines, which shows the way it is done. The purple
+indicated the rosters of the great industries; the red, the number of
+men recruited from them for military service. No matter how the battle
+lines yearn for men, the workers in the factories that send goods across
+the sea are kept at their task. This diagram is the barometer. For
+exports keep up the rate of exchange and husband gold.</p>
+
+<p>England is creating a whole new line of industrial defence. The
+manufacture of dyestuffs will illustrate: This process, which originated
+in England, was permitted to pass to the Germans, who practically got a
+world monopoly in it. Now England is<span class='pagenum'><a name="Page_45" id="Page_45">[Pg 45]</a></span> determined that this and similar
+dependence must cease.</p>
+
+<p>For dyemaking she has established a systematic co-operation among state,
+education and trade. In the University of Leeds a department in colour
+chemistry and dyeing has been established, to make researches and to
+give special facilities to firms entering the industry, all in the
+national interest. A huge, subsidised mother concern, known as British
+Dyes, Limited, has been formed, and it will take the place of the great
+dye trust of Germany, in which the government was a partner.</p>
+
+<p>This procedure is being repeated in the launching of an optical-glass
+industry; this trade has also been in Teutonic hands. I could cite many
+other instances, but these will show the new spirit of British
+commercial enterprise and protection.</p>
+
+<p>Everywhere nationalisation is the keynote of trade activity. Coal
+furnishes an instance: The collieries of the kingdom not only stoke the
+fires of myriad furnaces but drive the ships of a mighty marine. Through
+her control of coal England has one whip hand over her allies, for many
+of<span class='pagenum'><a name="Page_46" id="Page_46">[Pg 46]</a></span> the French mines are in the occupied districts, and Italy's supply
+from Germany has stopped. Coal means life in war or peace. Now England
+proposes a state control of coal similar to that of railroads.</p>
+
+<p>It spells fresh power over the neutral shipping that coals at British
+ports. If the government controls the coal it will be in a position to
+stipulate the use that the consumer shall make of it, and require him to
+call for his return cargo at specified ports. Such supervision in war
+may mean similar domination in peace&mdash;another bulwark for British
+control of the sea.</p>
+
+<p>Throughout England all trade facilities are being broadened and
+bettered. The local Chambers of Commerce, whose chief function for years
+was solemnly to pass resolutions, have stirred out of their slumbers.
+The Birmingham body has formed a House of Commerce to stimulate and
+develop the commerce of the capital of the Midlands.</p>
+
+<p>This stimulation at home is accompanied by a programme of trade
+extension abroad. The Board of Trade has granted a licence to the
+Latin-American Chamber of Commerce in Great Britain, formed to pro<span class='pagenum'><a name="Page_47" id="Page_47">[Pg 47]</a></span>mote
+British trade in Central and South America and Mexico. Sections of the
+chamber are being organised for each of the important trades and
+industries in the kingdom, and committees named to enter into
+negotiations with every one of the Latin-American republics, where
+offices will be established in all important towns.</p>
+
+<p>The Board of Trade has also learned the lesson of co-operation for
+foreign trade. As one result, British syndicates, composed of small
+manufacturers, who share the overhead cost, are forming to open up new
+markets the world over. These syndicates correspond with the familiar
+German Cartel, which did so much to plant German products wherever the
+sun shone.</p>
+
+<p>England, too, has wiped out one other block to her trade expansion: For
+years many of her consuls were naturalised Germans. Many of them were
+trustworthy public servants. Others, true to the promptings of birth,
+diverted trade to their Fatherland. To-day the Consular Service is
+purged of Teutonic blood. It is one more evidence of the gospel of
+"England for the English!"</p>
+
+<p>All this new trade expansion cannot be<span class='pagenum'><a name="Page_48" id="Page_48">[Pg 48]</a></span> achieved without the real sinew
+of war, which is capital. Here, too, England is awake to the emergency.
+Typical of her plan of campaign is the projected British Trade Bank,
+which will provide facilities for oversea commercial development, and
+which will not conflict with the work ordinarily done by the
+joint-stock, colonial and British foreign banks. It will do for British
+foreign trade what the huge German combinations of capital did so long
+and so effectively for Teuton commerce. Furthermore, it will make a
+close corporation of finance and trade, with the government sitting in
+the board of directors and lending all the aid that imperial support can
+bestow.</p>
+
+<p>The bank will be capitalised at fifty million dollars. It will not
+accept deposits subject to call at short notice, which means constant
+mobilisation of resources; it will open accounts only with those who
+propose to make use of its oversea machinery; it will specialise in
+credits for clients abroad, and it will become the centre of syndicate
+operations. One of its chief purposes, I might add, will be to enable
+the British manufacturer and exporter to assume profitably the<span class='pagenum'><a name="Page_49" id="Page_49">[Pg 49]</a></span> long
+credits so much desired in foreign trade.</p>
+
+<p>From the confidential report of its organisation let me quote one
+illuminating paragraph which is full of suggestion for American banking,
+for it shows the new idea of British preparedness for world business.
+Here it is:</p>
+
+<p>"Nearly as important as the Board would be the General Staff. It is fair
+to assume that women will in the future take a considerable share in
+purely clerical work, and this fact will enable the institution to take
+fuller advantage of the qualifications of its male staff to push its
+affairs in every quarter of the globe. Youths should not be engaged
+without a language qualification, and after a few years' training they
+should be sent abroad. It could probably be arranged that associated
+banks abroad would agree to employ at each of their principal branches
+one of the Institution's clerks, not necessarily to remain there for an
+indefinite period, but to get a knowledge of the trade and
+characteristics of the country. Such clerks might in many cases sever
+their connection with the banks to which they were appointed<span class='pagenum'><a name="Page_50" id="Page_50">[Pg 50]</a></span> and start
+in business on their own account. They would, however, probably look
+upon the institution as their 'Alma Mater,' Every endeavour should be
+made to promote <i>esprit de corps</i>; and where exceptional ability is
+developed it should be ungrudgingly rewarded. If industry is to be
+extended it is essential that British products should be <i>pushed</i>; and
+manufacturers, merchants and bankers must combine to push them. It is
+believed that this pushing could be assisted by the creation of a body
+of young business men in the way above described."</p>
+
+<p>The scope and purpose of this British Trade Bank suggest another East
+India Company with all the possibilities of gold and glory which
+attended that romantic eighteenth-century enterprise. Perhaps another
+Clive or a second Hastings is somewhere in the making.</p>
+
+<p>That the British Government proposes to follow the German lead and
+definitely go into business&mdash;thus reversing its tradition of aloofness
+from financial enterprise&mdash;is shown in the new British and Italian
+Corporation, formed to establish close economic relations between
+Britain and Italy. It<span class='pagenum'><a name="Page_51" id="Page_51">[Pg 51]</a></span> starts a whole era in British banking, for it
+means the subsidising of a private undertaking out of national funds.</p>
+
+<p>It embodies a meaning that goes deeper and travels much farther than
+this. Up to the outbreak of the great war Germany was the banker of
+Italy. Cities like Milan and Rome were almost completely in the grip of
+the Teutonic lender, and his country cashed in strong on this surest and
+hardest of all dominations. This was the one big reason why the Italian
+declaration of war against Germany was so long delayed. With this new
+banking corporation England not only supplants the German influence but
+forges the economic irons that will bind Italy to her.</p>
+
+<p>The capital of the British and Italian Corporation is nominally only
+five million dollars. The government, however, agrees to contribute
+during each of the first ten years of its existence the sum of two
+hundred and fifty thousand dollars. Though imperial stimulation of trade
+is one of its main objects, this institution is not without its larger
+political value. As this and many other similar enterprises show,
+politics and world<span class='pagenum'><a name="Page_52" id="Page_52">[Pg 52]</a></span> trade, so far as Great Britain is concerned, will
+hereafter be closely interwoven.</p>
+
+<p>Throughout all this British organisation runs the increasing purpose of
+an Empire Self-Contained. Whether that phase of the Paris Pact which
+calls for development and mobilisation of natural resources sees the
+light of reality or not, Britain is determined to take no chances for
+her own. She is scouring and searching the world for new fields and new
+supplies. She is planning to increase her tea and coffee growing in
+Ceylon and make cotton plantations of huge tracts in India and Africa.
+The control of the metal fields of Australia has reverted to her hands;
+she will get tungsten and oil from Burma. It took the war to make her
+realise that, with the exception of the United States, Cuba and Hawaii,
+all the sugar-cane areas of the world are within the imperial confines.
+They will now become part of the Empire of Self-Supply. Even a partial
+carrying out of this far-flung plan is bound seriously to affect our
+whole export business.</p>
+
+<p>You have seen how this self-contained idea may work abroad. Go back to
+Eng<span class='pagenum'><a name="Page_53" id="Page_53">[Pg 53]</a></span>land and you find it forecasting an agricultural revolution that may
+be one of the after-war miracles.</p>
+
+<p>For many years England has raised about twenty per cent of her wheat
+supplies. One reason was her dependence on grass instead of arable land;
+another was the inherent objection of the British farmer to adopt
+scientific methods of soil cultivation or engage in co-operative
+marketing. The old way was the best way; he wanted to go "on his own."</p>
+
+<p>The war has opened his eyes, and likewise the eyes and purse of the
+ultimate consumer. Denmark did some of this awakening. England depended
+upon her for enormous supplies of bacon, cheese, butter and eggs. When
+the war broke out and the ring of steel hemmed Germany in, the
+speculative prices offered by the Fatherland were too much for the
+little domain. Holland also "let down" her old customer, poured her food
+into Germany, and fattened on immense profits. Norway and Sweden, which
+were also important sources of more or less perishable British food
+supplies, have done the same thing. When peace comes you<span class='pagenum'><a name="Page_54" id="Page_54">[Pg 54]</a></span> may be sure
+that England will have a reckoning.</p>
+
+<p>This scarcity of food, coupled with the incessant sinking of supply
+ships by enemy submarines, the rigid censorship of imports, and all
+those other factors that bring about the high cost of war, has made the
+Englishman sit up and take notice of his agricultural plight.</p>
+
+<p>"We must grow more of our food," is the new determination. To achieve it
+plans for collective marketing, for intensive farming, for co-operative
+land-credit banks, are being made. The gentleman farmer will become a
+working farmer.</p>
+
+<p>England's gospel of self-sufficiency has a significance for us that
+extends far beyond her growing independence in foodstuffs and raw
+materials. It is fashioning a weapon aimed straight at the heart of our
+overseas industrial development.</p>
+
+<p>Most people who read the newspapers know that many articles of American
+make, ranging from bathtubs to motor cars, have been excluded from
+England. The reasons for this&mdash;which are all logical&mdash;are the necessity
+for cutting down imports to protect<span class='pagenum'><a name="Page_55" id="Page_55">[Pg 55]</a></span> the trade balance and keep the gold
+at home; the need of ship tonnage for food and war supplies; and the
+campaign to curtail luxury.</p>
+
+<p>Admirable as are these reasons, there is a growing feeling among
+Americans doing business in England that this wartime prohibition, which
+is part of the programme of military necessity, is the prelude to a more
+permanent, if less drastic, exclusion when peace comes.</p>
+
+<p>Habit is strong with Englishmen, and the shrewd insular manufacturer has
+been quick to see the opportunities for advancement that lie in this
+closed-door campaign.</p>
+
+<p>"Get the consumer out of the habit of using a certain American product
+during the war," he argues, "and when the war is over&mdash;even before&mdash;he
+will be a good 'prospect' for the English substitute."</p>
+
+<p>Here is a concrete story that will illustrate how the exclusion works
+and what lies behind:</p>
+
+<p>Last summer a certain well-known American machine, whose gross annual
+business in Great Britain alone amounts to more than half a million
+dollars a year, was suddenly denied entrance into the kingdom. When<span class='pagenum'><a name="Page_56" id="Page_56">[Pg 56]</a></span> the
+managing director protested that it was a necessity in hundreds of
+British ships he was told that it made no difference.</p>
+
+<p>"But what are the reasons for exclusion?" he asked.</p>
+
+<p>"We don't want English money to go out of England," was the reply.</p>
+
+<p>"Then we shall not only bank all our receipts here but will bring over
+one hundred thousand pounds more," came from the director.</p>
+
+<p>It had no effect.</p>
+
+<p>"Is it tonnage?" was the next query.</p>
+
+<p>"Yes," said the official.</p>
+
+<p>"Then we shall ship machines in our president's yacht," was the ready
+response.</p>
+
+<p>This staggered the official. After a long discussion the director
+received permission to bring in what machines were on the way; and,
+also, he got a date for a second hearing.</p>
+
+<p>Meantime he adapted a type of machine to the needs of a certain
+department in the Board of Trade, sold two, and got them installed and
+working before he next appeared before the Trade Censors, who, by the
+way, knew absolutely nothing at all about<span class='pagenum'><a name="Page_57" id="Page_57">[Pg 57]</a></span> the article they were
+prohibiting. The first question popped to him was:</p>
+
+<p>"Are machines like yours made in England?"</p>
+
+<p>"Yes," replied the director; "but they have never been practical or
+commercial."</p>
+
+<p>Then he produced the record of the machines he had sold to the
+government. Each one saved the labour of eight persons and considerable
+office space. This made a distinct impression and the company got
+permission to import two hundred tons of their product. But not even an
+application for more can be filed until the first of next year. Only the
+dire necessity for this article, coupled with the fact that it is
+without British competition, got it over.</p>
+
+<p>I cite this incident to show what many Americans in England believe to
+be one of the real reasons behind the prohibition, which, summed up, is
+simply this: England is trying to keep out everything that competes with
+anything that is made in England or that can be made in England!</p>
+
+<p>For some time after the war began our motor cars went in free. Then
+followed an ad-valorem duty of thirty-three and a third<span class='pagenum'><a name="Page_58" id="Page_58">[Pg 58]</a></span> per cent.
+Despite this handicap, agents were able to sell American machines, which
+were both popular and serviceable. The tariff was imposed ostensibly to
+cut down imports, but mainly to please the British motor manufacturers,
+who claimed that the surrender of their factories to the government for
+making munitions left the automobile market at the mercy of the American
+product, which meant loss of goodwill.</p>
+
+<p>Subsequently a complete embargo was placed on the entry of American
+pleasure cars and the business practically came to a standstill. What is
+the result? Let the agent of a well-known popular-priced American car
+tell his story.</p>
+
+<p>"Before the war and up to the time of the embargo," he said, "I was
+selling a good many American automobiles. With the embargo on cars also
+came a prohibition of spare parts. It was absolutely impossible to get
+any into the country. Many of my customers wanted replacements, and,
+when I could not furnish them, they abandoned the cars I sold them and
+bought English-made machines whose parts could be replaced."</p>
+
+<p>All through the motor business in Eng<span class='pagenum'><a name="Page_59" id="Page_59">[Pg 59]</a></span>land I found a strong disposition
+on the part of the British manufacturer and dealer to create a market
+for his own car as soon as the war is over. Some even talked of a large
+output of low-priced machines to meet the competition of the familiar
+car that put the automobile joke on the map. The only American comeback
+to this growing prejudice is to build factories or assembling plants
+within the British Isles. This will save excessive freight rates, keep
+down the costly-tariff "overhead," and get the benefit of all the
+goodwill accruing from the employment of British labour.</p>
+
+<p>A by-product of British exclusion is the inauguration of a
+Made-in-England campaign. Buy a hat in Regent Street or Oxford Street
+and you see stamped on the inside band the words, "British Manufacture."
+This English crusade is more likely to succeed than our Made-in-U.S.A.
+attempt, for the simple reason that the government is squarely behind
+it.</p>
+
+<p>This same spirit dominates newspaper publicity. You find a British
+fountain pen glowingly proclaimed in a big display advertisement,
+illustrated with the picture of<span class='pagenum'><a name="Page_60" id="Page_60">[Pg 60]</a></span> men trundling boxes of gold down to a
+waiting steamer. Alongside are these words:</p>
+
+<p>"The man who buys a foreign-made fountain pen is paying away gold, even
+if the money he hands across the counter is a Treasury note. The British
+shop may get the paper; the foreign manufacturer gets gold for all the
+pens he sends over here. What is the sense of carrying an empty
+sovereign-purse in one pocket if you put a foreign-made fountain pen in
+another?"</p>
+
+<p>Behind all this British exclusion is an old prejudice against our wares.
+There has never been any secret about it. I found a large body of
+opinion headed by brilliant men who have bidden farewell to the
+Hands-Across-the-Sea sentiment; who have little faith in the theory that
+blood is thicker than water when it comes to a keen commercial clash.</p>
+
+<p>What of the human element behind the whole British awakening? Will
+organised labour, an ancient sore on the British body, rise up and
+complicate these well-laid schemes for economic expansion? As with the
+question of practicability of the Paris Pact, there is a wide difference
+of opinion.<span class='pagenum'><a name="Page_61" id="Page_61">[Pg 61]</a></span></p>
+
+<p>On one hand, you find the air full of the menace of post-war
+unemployment and the problem of replacing the woman worker by the man
+who went away to fight. To offset this, however, there will be the
+undoubted scarcity of male help due to battle or disease, and the
+inevitable emigration of the soldier, desirous of a free and open life,
+to the Colonies.</p>
+
+<p>On the other hand, there is the conviction that unrestricted output,
+having registered its golden returns, will be the rule, not the
+exception, among the English artisans. England's frenzied desire for
+economic authority proclaims a job for everybody.</p>
+
+<p>I asked a member of the British Cabinet, a man perhaps better qualified
+than any other in England to speak on this subject, to sum up the whole
+after-war labour situation, as he saw it, and his epigrammatic reply
+was:</p>
+
+<p>"After the war capital will be ungrudging in its remuneration to labour;
+and labour, in turn, must be ungrudging in its output."</p>
+
+<p>No one doubts that after the war the British worker will have his full
+share of profits.<span class='pagenum'><a name="Page_62" id="Page_62">[Pg 62]</a></span> As one large manufacturer told me: "We have so gotten
+into the habit of turning our profits over to the government that it
+will be easy to divide with our employees." Here may be the panacea for
+the whole English labour ill.</p>
+
+<p>But, whatever may be the readjustment of this labour problem, one thing
+is certain: Peace will find a disciplined England. The five million men,
+trained to military service, will dominate the new English life; and
+this means that it will be orderly and productive.</p>
+
+<p>With this discipline will come a democracy&mdash;social and industrial&mdash;such
+as England has never known. The comradeship between peer and valet,
+master and man, born of common danger under fire, will find renewal, in
+part at least, when they go back to their respective tasks. This wiping
+out of caste in shop, mill and counting room will likewise remove one of
+the old barriers to the larger prosperity.</p>
+
+<p>England wants the closest trade relations with her Dominions. But will
+the Colonies accept the idea of a fiscal union of empire, which
+practically means intercolonial free<span class='pagenum'><a name="Page_63" id="Page_63">[Pg 63]</a></span> trade? Or will they want to
+protect their own industries, even against the Mother Country? Like the
+French, they are willing to risk life and limb for a cause, but they
+likewise want to guard jealously their purse and products. They have not
+forgotten the click when Churchill locked the home door against them.</p>
+
+<p>This leads to the question that is agitating all England: Will peace
+bring tariff reform? Both English and American economic destiny will be
+affected by the decision, whatever it may be.</p>
+
+<p>Canvass England and you encounter a widespread movement that means, as
+the advocates see it, a broadening of the home market; security for the
+infant "key" industries; a safeguard for British labour&mdash;in short, the
+end of the old inequality of a Free England against a Protected Germany.</p>
+
+<p>Protection in England, hitched to a world-wide freeze-out business
+campaign against Germany, would doubtless divert a whole new
+international discount business to New York. German exporters under
+these circumstances might refuse payments from their other customers on
+London, demanding<span class='pagenum'><a name="Page_64" id="Page_64">[Pg 64]</a></span> bills on New York instead. To hold this business,
+however, we should need direct banking and cable connections with all
+the grand divisions of trade, adequate sea-carrying power, dollar
+credits, and a government friendly to business.</p>
+
+<p>Then, there is the middle English ground which demands a "tariff for
+revenue only," and subsidy&mdash;not protection&mdash;for the new industries.</p>
+
+<p>Combating all this is the dyed-in-the-bone free trader, who points to
+the fact that free trade made England the richest of the Allies and gave
+her control of the sea. "How can a nation that is one huge seaport, and
+which lives by foreign trade, ever be a protectionist?" he asks.</p>
+
+<p>If he has his way we shall have to struggle harder for our share of
+universal business. More than this, it will block what is likely to be
+one of Germany's schemes for rehabilitation. Here is the possible
+procedure:</p>
+
+<p>Germany's financial position after the war will be badly strained. She
+can be saved only by an effective export policy. To do this she must
+seek all possible neutral mar<span class='pagenum'><a name="Page_65" id="Page_65">[Pg 65]</a></span>kets; and to get them quickly she will
+offer broad&mdash;even extravagant&mdash;reciprocity programmes. They may conflict
+with the proposed Franco-British programmes of protection and embargo
+against neutral trade interests.</p>
+
+<p>But if the Franco-British programme leaves the allied markets for goods
+and money open, as before the war, the German reciprocity scheme will
+fail of its effect by the sheer force of natural competition. Hence
+England can throttle the re-establishment of German credit by a free and
+liberal trade policy, open to all the world. Though poor, after the war
+she can actually be stronger, in view of her great army and navy, her
+new individual efficiency, and renewed commercial vitality.</p>
+
+<p>Will all this keep Germany out? There are many people, even in England,
+who think not. Already Germans by the thousands are becoming naturalised
+citizens of Holland, Spain, Switzerland and Denmark; building factories
+there and shipping the product into the enemy strongholds, stamped with
+neutral names. Much of the "Swiss" chocolate you buy in Paris was made
+by Teutonic hands.<span class='pagenum'><a name="Page_66" id="Page_66">[Pg 66]</a></span></p>
+
+<p>A French manufacturer who bought a grinding machine in Zurich the other
+day thought it looked familiar; and when he compared it with a picture
+in a German catalogue he found it was the identical article, made in
+Germany, which had been offered to him by a Frankfort firm six months
+before the war began. Only certificates of origin will bar out the
+German product.</p>
+
+<p>Amid the hatred that the war has engendered, England wonders at the
+price she will pay for German exclusion. Men like Sir John Simon
+solemnly assert in Parliament: "In proportion as we divert German trade
+after the war we throw the trade of the Central European Powers more and
+more into the hands of America, with the result that, unhappily, if we
+became involved in another European war we should not be able to count
+on the friendly neutrality which America has shown in this war." Others
+inquire: "What of the future trade of India, the great part of whose
+cotton crop before the war went to Central Europe?"</p>
+
+<p>Sober-minded and farseeing men, in England and elsewhere, believe that,
+despite the<span class='pagenum'><a name="Page_67" id="Page_67">[Pg 67]</a></span> ravage of her men and trade, Germany will come back
+commercially.</p>
+
+<p>"You must not forget," said one of them, "that, no matter how badly she
+is beaten, Germany will still be a going business concern. She will have
+an immense plant; her genius of efficiency and organisation cannot be
+killed. Through her magnificent industrial education system she has
+trained millions of boys to take the vacant stools and stands in shop
+and mill. England and France have no such reserves. Besides, if we
+pauperise Germany, no one&mdash;not even Belgium&mdash;will get a pound of
+indemnity."</p>
+
+<p>You have now seen the moving picture of half a world in process of
+significant change, wrought by clash of arms, and facing a complete
+economic readjustment with peace. Whether the Paris Pact is practical or
+visionary, no matter if England is free trade or protectionist,
+regardless of Germany's ability to find herself industrially at once,
+one thing we do know&mdash;the end of the war will find the Empire of World
+Trade molten and in the remaking.</p>
+
+<p>Fresh paths must be shaped; the race will be to the best-prepared.
+Whatever our posi<span class='pagenum'><a name="Page_68" id="Page_68">[Pg 68]</a></span>tion, be it neutral or belligerent&mdash;and no man can
+tell which now&mdash;we shall face a supreme test of our resource and our
+readiness. What can we do to meet this crisis, which will mean continued
+prosperity or costly reaction?</p>
+
+<p>Many things; but they must be done now, when immunity from actual
+conflict gives us a merciful leeway. More than ever before, we shall
+face united business fronts. Therefore, co-operation among competitors
+is necessary to a successful foreign trade.</p>
+
+<p>Since the coming trade war will rage round tariffs, it will be well to
+heed the resolution recently adopted by the National Foreign-Trade
+Council: "That the American tariff system, whatever be its underlying
+principle, shall possess adequate resources for the encouragement of the
+foreign trade of the United States by commercial treaties or agreements,
+or executive concessions within defined limits, and for its protection
+from undue discrimination in the markets of the world." In short, we
+must have a flexible and bargaining tariff.</p>
+
+<p>We must train our men for foreign-trade fields; they must know alien
+languages as<span class='pagenum'><a name="Page_69" id="Page_69">[Pg 69]</a></span> well as needs; we must perfect processes of packing that
+will deliver goods intact. With these goods, we must sell goodwill
+through service and contact. Secondhand-business getting will have no
+place in the new rivalry.</p>
+
+<p>Our money, too, must go adventuring, and courage must combine with
+capital. Our dawning international banking system, which first saw the
+light in South America, needs world-wide expansion. Dollar credit will
+be a world necessity if we capitalise the opportunity that peace may
+bring us. No financial aid should be so welcome as ours, because it is
+nonpolitical.</p>
+
+<p>This trade machinery will be inadequate if we have no merchant marine.
+Chronic failure to heed the warning for a national shipping will make
+our dependence upon foreign holds both acute and costly.</p>
+
+<p>Our trade needs more than a government professedly friendly to business.
+It requires a definite co-operation with business. An advisory board of
+practical men of commercial affairs would be of more constructive
+benefit to the country than all the lawmakers combined.</p>
+
+<p>Here, then, is the protection against or<span class='pagenum'><a name="Page_70" id="Page_70">[Pg 70]</a></span>ganised European economic
+aggression, the armour for the inevitable trade conflict. Unless we gird
+it on, we shall be onlookers instead of participants.</p>
+
+<hr />
+<p><span class='pagenum'><a name="Page_71" id="Page_71">[Pg 71]</a></span></p>
+<h2><a name="III_American_Business_in_France" id="III_American_Business_in_France"></a>III&mdash;<i>American Business in France</i></h2>
+
+<p>Two Americans met by chance one day last summer at a little table in
+front of the Caf&eacute; de la Paix in Paris. One had arrived only a month
+before; the other was an old resident in France. After the fashion of
+their kind they became acquainted and began to talk. Before them passed
+a picturesque parade, brilliant with the uniforms of half a dozen
+nations, and streaked with the symbols of mourning that attested to the
+ravage of war.</p>
+
+<p>"There is something wrong with these Frenchmen," said the first
+American.</p>
+
+<p>"How is that?" asked his companion.</p>
+
+<p>"It's like this," was the reply. "I have sold goods from the Atlantic to
+the Pacific, and yet I can get nowhere over here. I give these fellows
+the swiftest line of selling talk in the world and it makes no
+impression."</p>
+
+<p>"How well do you speak French?" queried his new-found acquaintance.<span class='pagenum'><a name="Page_72" id="Page_72">[Pg 72]</a></span></p>
+
+<p>"Not at all."</p>
+
+<p>"Have you studied the ways and needs of the Frenchman?"</p>
+
+<p>"Of course not. I've got something they want and they ought to take it."</p>
+
+<p>The man who had long lived in France was silent for a moment. Then he
+said:</p>
+
+<p>"The fault is not with the Frenchman, my friend. Think it over." He did,
+and with reflection he changed his method. He put a curb on strenuosity;
+started to study the French temperament; he began to see why he had not
+succeeded.</p>
+
+<p>This incident illumines one of the strangest and most inconsistent
+situations in our foreign trade. By a curious irony we have failed to
+realise our commercial destiny in the one Allied Nation where real
+respect and affection for us remain. France&mdash;a sister Republic&mdash;is bound
+to us by sentimental ties and the kinship of a common struggle for
+liberty. Her people are warm-hearted and generous and <i>want</i> to do
+business with us.</p>
+
+<p>Yet, as long and costly experience shows, we have almost gone out of our
+way to clash with their customs and misunderstand their motives. In
+short, we have neglected a great<span class='pagenum'><a name="Page_73" id="Page_73">[Pg 73]</a></span> opportunity to develop a permanent and
+worth-while export business with them. It was bad enough before the war.
+Events since the outbreak of the monster conflict have emphasised it
+more keenly.</p>
+
+<p class='tbrk'>&nbsp;</p>
+
+<p>Why have Americans failed so signally in France? There are many reasons.
+First of all, their whole system of selling has been wrong.</p>
+
+<p>For years many of our manufacturers were represented in Paris and
+elsewhere in France by German agents, who also represented producers in
+their own country. The energetic Teuton did not hesitate to install an
+American machine or a line of American goods. But what happened? When
+the machine part wore out or the stock of goods was exhausted, there was
+seldom any American product on hand to meet the swift and sometime
+impatient demand for replacement or renewal. By a strange "coincidence"
+there was always an abundant supply of German material available. The
+German salesman always saw to that. Necessity knows no nationality. The
+result invariably was that German output supplanted the Amer<span class='pagenum'><a name="Page_74" id="Page_74">[Pg 74]</a></span>ican. The
+Frenchman did not want to be caught the second time.</p>
+
+<p>This prompt renewal created an immense goodwill for German goods. Right
+here is one of the first big lessons for the American exporter to learn,
+no matter what country he expects to sell in. It lies in keeping goods
+"on the shelf," and being able to meet emergency demand.</p>
+
+<p>The Frenchman in trade is a sort of Missourian. He must be "shown." He
+shies at samples; distrusts drawings. He likes to go into a warehouse
+and look over stocks; it gives him satisfaction to pick and choose. He
+is the most fastidious buyer in the world and he likes to do things his
+own way. Any attempt to ram foreign methods&mdash;either in buying or
+selling&mdash;down his sensitive throat is bound to react.</p>
+
+<p>Here is a case in point: The General Representative in France of a large
+American manufacturing concern decided to engage some French salesmen.
+He was a shark on business system; he fairly oozed with "scientific
+salesmanship"; he decided to gird his Gallic emissaries with the most
+improved American selling methods. So he prepared<span class='pagenum'><a name="Page_75" id="Page_75">[Pg 75]</a></span> an elaborate "What I
+did" schedule for them. Into it was to be written every evening the
+complete record of the business day.</p>
+
+<p>When he handed one of these blanks to his leading French salesman, that
+gentleman shrugged his shoulders and said:</p>
+
+<p>"It eez imposseeble."</p>
+
+<p>When the American became insistent all the French salesmen resigned in a
+body. This objection was purely temperamental. If there is one thing
+above all others that puts a Frenchman into panic it is publicity of his
+personal affairs. He believes that the greatest crime in the world is to
+be found out, whether in business or in love. There was nothing perhaps
+to hide in a biography of his daily work, but it was the wrong tack to
+take.</p>
+
+<p>In the same way militant and masterful salesmanship also fails. A man
+may be a crack seller in Kansas City, Denver, and all points West, but
+he finds to his sorrow that his dynamic process goes straight over the
+head of a Frenchman. He refuses to be driven; he wants time for mature
+reflection and an opportunity to talk the thing over with his wife.<span class='pagenum'><a name="Page_76" id="Page_76">[Pg 76]</a></span></p>
+
+<p>This irritating attempt to force uncongenial methods on French buyers is
+duplicated in a corresponding lack of plain everyday intelligence in
+meeting the simplest French requirements.</p>
+
+<p>Indeed, the omissions of Americans are wellnigh incredible. Take the
+matter of postage to France. The head of a great French concern made
+this statement to me in sober earnestness: "Won't you be good enough to
+beg American manufacturers to put their office boys through a course of
+instruction in postal rates between Europe and the United States?"</p>
+
+<p>When I asked him the reason he said: "We sometimes get twenty letters
+from America in one mail and each comes under a two cent stamp. This has
+been going on for years despite our repeated protest about it. Some
+months my firm was required to pay from ten to fifteen dollars in excess
+postage."</p>
+
+<p>Now the amount of money involved in this transaction is the slightest
+feature: it is the chronic laxity and carelessness of the American
+business man that gets on the Frenchman's nerve.<span class='pagenum'><a name="Page_77" id="Page_77">[Pg 77]</a></span></p>
+
+<p>Here is another case in point: A well known French firm has been writing
+weekly letters for the past eighteen months to a New England factory
+trying to persuade the Manager to mark his export cases with a stencil
+plate and in ink rather than with a heavy lead pencil, as the latter
+marking is almost obliterated by the time the shipment arrives at Havre.
+In fact, this French firm went to the extent of sending a stencil and
+brush to New England to be used in marking the firm's cases. But the old
+pencil habit is too strong and a weekly hunt has to be instituted on the
+French docks for odd cases containing valuable consignments of machine
+tools. Vexatious delays result. It is just one more nail that the
+heedless American manufacturer drives into the coffin of his French
+business.</p>
+
+<p>These incidents and many more that I could cite, are merely the
+approach, however, to a succession of mistakes that make you wonder if
+so-called Yankee enterprise gets stage fright or "cold feet" as soon as
+it comes in contact with French commercial possibilities. Let me now
+tell the prize story of neglected trade opportunity.<span class='pagenum'><a name="Page_78" id="Page_78">[Pg 78]</a></span></p>
+
+<p>Last spring the American Commercial Attache in Paris made a speech at a
+dinner in Philadelphia. He painted such a glowing picture of trade
+prospects in France that the head of one of the greatest hardware
+concerns in America, who happened to be present, came to him afterwards
+with enthusiasm and said: "We want to get some of that foreign business
+you talked about and we will do everything in our power to land it. Help
+us if you can."</p>
+
+<p>The Attache promised that he would and returned to his post in Paris. He
+studied the hardware situation and found a tremendous need for our
+goods. He was about to make a report to the hardware manufacturer when
+an alert upstanding young American breezed into his office and said:</p>
+
+<p>"I have been looking into the hardware situation here and I find that
+there is a big chance for us. In fact, I have already booked some fat
+orders. Will you put me in touch with the right people in America to
+handle the business?"</p>
+
+<p>"Certainly," replied the Attache. "I know just the firm you are looking
+for." He recalled the enthusiastic remarks of the man<span class='pagenum'><a name="Page_79" id="Page_79">[Pg 79]</a></span> who came to him
+after the Philadelphia speech, so he said: "Write to the Blank Hardware
+Company in &mdash;&mdash;, and I am sure you will get quick action."</p>
+
+<p>"No," said the enterprising young American, "I will cable." He
+immediately got off a long wire telling what orders he had and giving
+gilt edge banking references.</p>
+
+<p>Quite naturally he expected a cable reply, but he was too optimistic.
+Day after day passed amid a great silence from America. At the end of
+two weeks he received a <i>letter</i> from the Export Manager of the firm who
+said, among other things: "We are not prepared to quote any prices for
+the French trade now. We have decided to wait with any extension of our
+foreign business until after the war. Meanwhile you might call on our
+agent in Paris who may be able to do something for you."</p>
+
+<p>The young American dashed up to the agent's warehouse. The agent was an
+old man becalmed in a sea of empty space. All his young men were off at
+the front; a few grey beards aided by some women comprised his working
+staff.</p>
+
+<p>"I have no American hardware in stock,"<span class='pagenum'><a name="Page_80" id="Page_80">[Pg 80]</a></span> he said, "but I may be able to
+get you some English or Swiss goods." This did not appeal to the young
+American. He is now making a study of Russian finance.</p>
+
+<p>Full brother to this episode is the experience of another American in
+Paris who found out that there was great need among French women for
+curling irons. Despite war, sacrifice and sudden death, the French woman
+is determined to look her best. Besides, she is earning more money than
+ever before and buying more luxuries. Knowing these facts, the Yankee
+sent the following cable to a well known concern in the Middle West:</p>
+
+<p>"Rush fifty thousand dollars' worth of curling irons. Cable acceptance."
+He also cabled his financial references which would have started a bank.</p>
+
+<p>He, too, was doomed to disappointment. After a fortnight came the usual
+letter from America containing the now familiar phrase: "See Blank
+Blank, our Paris representative. He may be able to take care of you."</p>
+
+<p>Manfully he went to see Monsieur Blank<span class='pagenum'><a name="Page_81" id="Page_81">[Pg 81]</a></span> Blank, who not only had no
+curling irons but refused to display the slightest interest in them.</p>
+
+<p>Still another American took an order for some kid skins, intended for
+the manufacture of fine shoe uppers. By the terms of the agreement they
+were to be three feet in width. The money for them amounting to $30,000
+was deposited in a New York bank before shipment.</p>
+
+<p>When the skins reached Paris they were found to be heavy, coarse leather
+and measuring five feet in width. They were absolutely useless for the
+desired purpose. The average French buyer, however, is not a welcher. He
+accepted the undesirable stuff, but with a comment in French that,
+translated into the frankest American, means, "Never again!"</p>
+
+<p>All this oversight is aided and abetted by a twin evil, a lack of
+knowledge of the French language. Here you touch one of the chief
+obstacles in the way of our foreign business expansion everywhere. It
+has put the American salesman at the mercy of the interpreter, and since
+most interpreters are crooks, you can readily see the handicap un<span class='pagenum'><a name="Page_82" id="Page_82">[Pg 82]</a></span>der
+which the helpless commercial scout labours. A concrete episode will
+show what it costs:</p>
+
+<p>A certain American firm, desirous of establishing a more or less
+permanent connection in France, sent over one of its principal officers.
+This man could not speak a word of French, so he secured the services of
+a so-called "interpreter guide." It was proposed to select a
+representative for the company from among a number of firms in a certain
+large French seaport. The firm chosen was to receive and pay for
+consignments through a local bank and act generally for the American
+company.</p>
+
+<p>Friend "interpreter guide" said he knew all the big business houses in
+the city, so he selected a firm which the American accepted without
+making the slightest investigation. A bank agreed to take care of the
+shipments and the whole transaction was quickly concluded. The American
+grabbed the papers in the case (and I might add without the formality of
+having them examined by a third party) and left France immensely
+impressed with the ease and swiftness with<span class='pagenum'><a name="Page_83" id="Page_83">[Pg 83]</a></span> which business could be
+transacted with that country.</p>
+
+<p>But there was an unexpected and unfortunate sequel to this performance.
+A few months later another officer of this American company came
+post-haste to France to straighten out an ugly tangle. It developed that
+the French firm chosen by the "interpreter guide" was not of the highest
+standing: that the interpreter, for reasons and profits best known to
+himself, had entirely misrepresented the conversation, that instead of
+paying four per cent for services, the American firm was really paying
+about ten. The whole transaction had to be called off and a new one
+instituted at considerable expense of time and money.</p>
+
+<p>Another American came to Paris without knowing the language, used an
+interpreter every day for nine weeks, and was unable to place a single
+order. Yet in this time he spent enough money on his language
+intermediary to pay the rent of a suitable office in Paris for a whole
+year.</p>
+
+<p>The dependence of Americans with important interests or commissions upon
+interpreters is well nigh incredible. On the<span class='pagenum'><a name="Page_84" id="Page_84">[Pg 84]</a></span> steamer that took me to
+France last summer was the new Continental Manager of a large American
+manufacturing company. I assumed, of course, that he could speak French.
+A few days after I arrived in Paris I met him in the Boulevard des
+Italiens in the grip of a five franc a day interpreter. He told me with
+great enthusiasm that an interpreter was "the greatest institution in
+the world." In six months he will probably reverse his opinion.</p>
+
+<p>The lesson of this lack of knowledge of French as applied to
+salesmanship is this: That while the average Frenchman is greatly
+flattered when you tell him that his English is good, he prefers to talk
+business in his own vernacular. He thinks and calculates better in
+French. Frequently when you engage him in conversation in English and
+the question of business comes up, you find that he instinctively lapses
+into his mother tongue.</p>
+
+<p>I was talking one day with Monsieur Ribot, the French Minister of
+Finance, whose English is almost above reproach, and who maintained the
+integrity of his English through a long conversation. But the moment I
+asked him a question about the pro<span class='pagenum'><a name="Page_85" id="Page_85">[Pg 85]</a></span>posed bond issue, he shifted into
+French and kept that key until every financial rock had been passed.</p>
+
+<p>In short, you find that if you want to do business in France, you must
+know the French language. It is one of the keys to an understanding of
+the French temperament.</p>
+
+<p>Even when Americans do become energetic in France, they sometimes fail
+to fortify themselves with important facts before entering into hard and
+fast transactions. As usual, they pay dearly for such omissions. This
+brings us to what might be called The Great American Deluge which
+overwhelmed not a few Yankee pocketbooks and left their owners sadder
+and saner.</p>
+
+<p>Fully to understand this series of events, you must know that since the
+beginning of the war the question of an adequate French coal supply has
+been acute. Indeed, for a while the country faced a real crisis. Many of
+her mines are in the hands of the Germans and she was forced to turn to
+England for help. Not only has the English price risen, but to it must
+be added the high cost of transportation, the heavy war risk, and<span class='pagenum'><a name="Page_86" id="Page_86">[Pg 86]</a></span> all
+those other details that enter into such negotiations.</p>
+
+<p>France had to have coal and various enterprising Americans got on the
+job. At least, they thought they were enterprising. Before they got
+through, they wished that they had not been so headlong as the following
+tale, now to be unfolded, will indicate.</p>
+
+<p>A group of New York men made a contract to deliver three shiploads of
+coal at Bordeaux at a certain price. <i>After</i> they had signed the
+contract, freight rates from Baltimore to the French port almost
+doubled. This was the first of their troubles. When their vessel finally
+reached Bordeaux, the dock was so crowded with ships unloading war
+munitions that they could not get pier space. In France demurrage begins
+the moment a ship stops outside of port. The net result was that these
+vessels were held up for nearly two weeks and the high price of
+transportation coupled with the very large demurrage practically wiped
+out all the profits.</p>
+
+<p>Another group of Americans made a contract to deliver coal to a French
+railway "subject to call." Without taking the trou<span class='pagenum'><a name="Page_87" id="Page_87">[Pg 87]</a></span>ble to inquire just
+what "subject to call" meant in France, they signed and sealed the
+bargain. Then they discovered that the railroad wanted the coal
+delivered in irregular instalments. Meanwhile the consignors had to
+store the coal in French yards where space to-day is almost as valuable
+as a corner lot on Broadway. They were glad to pay a cash bonus and
+escape with their skin.</p>
+
+<p>Still another group made a contract with the Paris Gas Company for a
+large quantity of coal. They discovered later that the company expected
+the coal to be delivered to their bins in Paris.</p>
+
+<p>"But the American plan is to sell coal f.o.b. Norfolk," said the
+spokesman.</p>
+
+<p>"We are sorry," replied the Frenchmen, "but the coal must be delivered
+to us in Paris. The English have been doing it for forty years, and if
+you expect to do business with us you must do likewise."</p>
+
+<p>When the Americans demurred the company held them to their contract.</p>
+
+<p>This last episode shows one of the great defects in the American system
+of doing business abroad. We insist upon the f.o.b. arrangement, that
+is, the price at the Amer<span class='pagenum'><a name="Page_88" id="Page_88">[Pg 88]</a></span>ican point of shipment. The foreigner, and
+especially the Frenchman, wants a c.i.f. price which includes cost,
+insurance and freight and which puts the article down at his door. The
+German and English shippers, and particularly the former, have made this
+kind of shipment part of their export creed, and it is one reason why
+they have succeeded so wonderfully in the foreign field.</p>
+
+<p>The Great American Coal Deluge also precipitated a flood of miserable
+titled ladies all selling coal for "well known American companies." Most
+of them were clever American women, married, or thinking they were
+married, to Italian or French noblemen. Their chief effort was to get a
+cash advance payment to bind the contract. Such details as price,
+transportation, credit, and other essentials were unimportant.</p>
+
+<p>Here is a little story which shows how these women did business and
+undid American good will.</p>
+
+<p>One day last August, the telephone rang in the office of the General
+Manager of a long established American concern in Paris. A woman was at
+the other end.</p>
+
+<p>"Is this Mr. Blank?"<span class='pagenum'><a name="Page_89" id="Page_89">[Pg 89]</a></span></p>
+
+<p>"Yes."</p>
+
+<p>"I am Countess A. and I have a letter of introduction for you."</p>
+
+<p>"Yes."</p>
+
+<p>"I represent several large American coal companies and have secured a
+large order for Italy."</p>
+
+<p>"Yes."</p>
+
+<p>"Can you tell me how I can get the coal to Italy?"</p>
+
+<p>"Yes."</p>
+
+<p>"Splendid! But how?"</p>
+
+<p>"By boats."</p>
+
+<p>"Oh, yes, I know, but have you got the boats and can I get them? I have
+the order, you see, and that is the main thing."</p>
+
+<p>"But, madam," asked the man, "have you cabled your company in America
+about the contract?"</p>
+
+<p>"No," answered the woman. "What's the use of doing that. I have no money
+to spend on cables. Besides, I have full power to act. The price is all
+right and the buyers are ready to sign but they want to put into the
+agreement some silly business about delivery and I am asking you to help
+me get the boats."<span class='pagenum'><a name="Page_90" id="Page_90">[Pg 90]</a></span></p>
+
+<p>"Come and see me," said the Manager.</p>
+
+<p>The woman promised to call the next morning, but she never came. Just
+what she had in mind the Manager could never quite tell. But one thing
+was proved in this and similar activities: The "Countess" and most of
+her sisters who have been trying to put over coal and other contracts in
+Paris, have little or no real authorisation for their performances, and
+the principal result has been to prejudice French and Italian buyers
+against us.</p>
+
+<p>In seeking to make French contracts, some of these adventurers (and they
+include both sexes) make the most extravagant claims. One group
+circulated a really startling prospectus. At the top was the imposing
+name of the corporation with a long list of branches in every part of
+the world. Then followed a list of names of individuals and firms with
+their assets supposed to be part and parcel of the corporation. One man
+whose name I had never heard before and who was set down as a
+Pittsburgher, was accredited with assets of $250,000,000. Under other
+individual and firm resources ranged from one to twenty-five million.
+The<span class='pagenum'><a name="Page_91" id="Page_91">[Pg 91]</a></span> list included the name of a great American retail merchant, without
+his consent I might add, but the promoters had cunningly misspelled his
+name, which kept them within the pale of the law. The total assets of
+these "concerns personally responsible for all orders entrusted" was
+precisely $340,000,000. In spite of this dazzling array of
+misinformation, let it be said to the credit of the French buyer that he
+failed to fall for the glittering bait.</p>
+
+<p>The more you go into the reasons why so many of our business men have
+failed in France, the more you find out that plain everyday business
+organisation seems to be conspicuously absent. Take, for example, the
+question of credit. The average American doing business in France
+proceeds in the assumption that every Frenchman is dishonest. This being
+his theory, he either exacts cash in advance or sells "cash against
+documents." Such a procedure galls the Frenchman who is accustomed to
+long credit from English, German, Swiss and Spanish manufacturers and
+merchants.</p>
+
+<p>Of course, behind all these American errors in judgment and tact is a
+lack of or<span class='pagenum'><a name="Page_92" id="Page_92">[Pg 92]</a></span>ganised credit information. To illustrate:</p>
+
+<p>When I was in London, the English Managing Director of one of the
+greatest of Wall Street Banks received an inquiry from his home office
+for information about the Compagnie Generale Transatlantique (the French
+Line). The amazing thing was that this bank, that prides itself on its
+world-wide information, had no data regarding the leading steamship line
+between England and France. You may be sure that the Credit Lyonnais or
+any other French banking institution has a complete record of the
+American Line.</p>
+
+<p>Not long ago, one of the largest banks in Chicago refused to extend
+credit to a French concern, although the French Government backed up the
+purchase. This concern had occasionally done business with a New York
+Trust Company in the Rue de la Paix, whose French Manager was a live,
+virile, far-seeing young American. The President of the French Company
+laid his case before him. Quick as a flash he said:</p>
+
+<p>"All right! If they won't guarantee it, I will, and on my own
+responsibility."</p>
+
+<p>Whereupon he put the deal through. It<span class='pagenum'><a name="Page_93" id="Page_93">[Pg 93]</a></span> was the kind of swift, dramatic
+performance that appeals to the Frenchman. The net result was that the
+service has come back a hundredfold to the Trust Company.</p>
+
+<p>The idea prevailing in America that French firms are not worthy of
+credit is a matter of great surprise all over Europe. Here is the way an
+Englishman whose firm has done business in France for fifty years, sized
+up the situation:</p>
+
+<p>"There are no better contracts in the world than those entered into in
+France. Americans who have had little experience in such matters may
+find the negotiations leading up to the signing of a French contract
+somewhat tedious, but we do not mind this and one is so completely
+protected by the laws of the country, that losses are almost unknown.</p>
+
+<p>"Not long ago we had a case in point. A purchaser of lathes who had
+already made an advance payment, received his machines and then by
+various excuses put off the final payments for the remainder from week
+to week. We waited four weeks and then made our complaint to the judge
+at the tribunal. Two days later the judge ordered the delinquent<span class='pagenum'><a name="Page_94" id="Page_94">[Pg 94]</a></span> firm
+to pay up in full and we received our money the very same day. How long
+do you think a New York court would have taken to decide a simple
+question of business of this kind? The fact is that in spite of the war,
+French credit remains to-day as good as any you can find."</p>
+
+<p>On top of their resentment over our lack of confidence in their credit
+is the added feeling which has cropped up since the beginning of the war
+over the way American manufacturers have ignored many of their French
+contracts. A French manufacturer summed it up in this way:</p>
+
+<p>"There is no doubt that some American manufacturers who had signed
+contracts for the delivery of machinery in France, deliberately sold
+these machines at home at higher prices. It has created a very bad
+impression and I am afraid that henceforth your salesmen will find it
+much harder to operate in my country.</p>
+
+<p>"The trouble is that Americans have been spoiled by too many orders.
+Before the war they were all crying out for business. Now that they have
+everything their own way, they have become independent and arrogant.<span class='pagenum'><a name="Page_95" id="Page_95">[Pg 95]</a></span>
+With the ending of the war, all this will change, for the French are not
+likely to forget some of the bitter lessons they have learned.
+Henceforth they will profit by them."</p>
+
+<p>One reason for our laxity all up and down the French business line is
+that the American has never taken the French export business any too
+seriously. On the other hand, stern necessity has been the driving force
+behind the English and German manufacturer. The American, too, has made
+the great mistake of assuming that the foreigner, and especially the
+Frenchman, is not always serious-minded and to be depended upon. If he
+wants his mind disabused in this matter, let me suggest that he see him
+at war. He will realise that the superb spirit of aggression and
+organisation that mark him now is bound to last when peace comes.</p>
+
+<p>You must not get the impression from this long list of American business
+calamity that all our endeavour has failed in France. Those few great
+American corporations who have planted the flag of our commercial
+enterprise wherever the trade winds blow, have<span class='pagenum'><a name="Page_96" id="Page_96">[Pg 96]</a></span> long and successfully
+held up their end throughout the Republic. So, too, with some
+individuals. The story of what one New Yorker did is an inspiring and
+perhaps helpful lesson in the right way to do business in France.</p>
+
+<p>This man is resolute and resourceful: he speaks French fluently and he
+was familiar with the foreign trade field. With the outbreak of war he
+did not lose his head and try to get business indiscriminately. Instead,
+he made a careful survey of the field; he did not listen to the optimist
+who said it would be a short war: his instinct told him, on the
+contrary, that it would be a long one. "What will France need more than
+anything else?" he asked himself.</p>
+
+<p>He realised that most of all France would need machine tools. He got the
+cables busy assembling goods, and by every known route he brought them
+to France. When he had a warehouse full of material, he began to sell.
+He not only had what the French were hungering for, but he had them to
+deliver overnight. While his colleagues were frantically trying to get
+their stuff in, he was get<span class='pagenum'><a name="Page_97" id="Page_97">[Pg 97]</a></span>ting all the business. The French like the
+man who makes good.</p>
+
+<p>This man met their expectations and to-day he stands at the top of the
+selling heap.</p>
+
+<p>More than this, he is building a factory on the outskirts of Paris where
+he will make and assemble his product. Ask him the reason why he is
+doing this, and he will tell you:</p>
+
+<p>"First, it means good will; second, we will get the benefit of native
+and cheap labour; third, we will be able to replace parts at once; and,
+fourth, we will get inside the wall of the Economic Alliance."</p>
+
+<hr />
+<p><span class='pagenum'><a name="Page_98" id="Page_98">[Pg 98]</a></span></p>
+<h2><a name="IV_The_New_France" id="IV_The_New_France"></a>IV&mdash;<i>The New France</i></h2>
+
+<p>No matter how we heed the example of the few progressive Americans who
+have successfully planted their business interests in France, we will
+face a new handicap when the war ends. As in England, we will be bang up
+against an industrial awakening that will mark an epoch. Coupled with
+this revival will be an efficiency born of the war needs that will act
+as a tremendous speeder-up.</p>
+
+<p>In France this galvanised industrial life will be stimulated by a
+brilliant imagination wholly lacking in the English temperament. It will
+go a long way toward opening up fresh fields of labour and distribution.</p>
+
+<p>Self-sufficiency will be the keynote. The automobile is a striking
+instance. We had established a very promising motor market (and
+especially with moderate-and low-priced cars) among the French. When the
+Government assumed control of the French automobile factories and
+changed their output to war munitions, the two great automo<span class='pagenum'><a name="Page_99" id="Page_99">[Pg 99]</a></span>bile
+syndicates protested that the cutting off of the French motor supply
+would mean an immense loss of good will. First came a 70 per cent duty
+on practically all American cars and this was followed up by an almost
+complete restriction of all American cars.</p>
+
+<p>This prohibition will have the same effect as the English exclusion in
+that it will stimulate the demand for the native French cars. Here we
+get to one of the striking phases of the new industrial development of
+immense concern to us. France has her eye on quantity output. Many signs
+point to it.</p>
+
+<p>When the war broke out, a certain young French engineer saw great
+opportunity in shell making. He was immuned from military service, he
+had a little capital of his own, and with Government aid he set to work.
+Within four months he had built an enormous plant on the banks of the
+Seine almost within the shadow of the Eiffel Tower. In six months he had
+enlarged his capacity so that he was producing 15,000 shells a day. Last
+summer he sent for the agent of a large American machinery company: "I
+am going to make automobiles in series after the war." "In series" is
+the<span class='pagenum'><a name="Page_100" id="Page_100">[Pg 100]</a></span> French way of expressing quantity output.</p>
+
+<p>"All right," said the American. "What can I do for you?"</p>
+
+<p>"Simply this," said the Frenchman. "I wish to order sufficient
+automatics to meet the demand when peace comes."</p>
+
+<p>This is the spirit of the awakened French industry. I know of half a
+dozen automobile and other producing establishments who are making plans
+to manufacture popular-priced cars when the war is over. This output
+will not only affect the sale of American cars in France, but will also
+interfere with the market for our cheap machines in South America.
+Already France is making every effort to increase her Latin-American
+trade. She has immense sums of money invested in Brazil and she will
+follow up this advantage keenly.</p>
+
+<p>It is important for us to remember that France like England will have a
+well oiled productive machine after the war. It will not only be better
+but bigger than ever before. The German ill wind that devastated the
+northern section will blow good in the end. Hundreds of factories
+operated by hand labour before the war will now be<span class='pagenum'><a name="Page_101" id="Page_101">[Pg 101]</a></span> equipped with
+American labour-saving machinery. The products of these machines
+operated by cheap labour will be in competition with our own commodities
+manufactured by more expensive labour in many of the markets of the
+world.</p>
+
+<p>Formerly the French artisan could produce an article almost from raw
+material to finished product: now he has learned to stand at an
+automatic and labour at a single part. In short, he is becoming a
+specialist which makes him a cog in the machine of quantity output.</p>
+
+<p>What is true of machines and men is also true of money. The old wariness
+of the French banker in underwriting industry is passing away. He is
+thinking in terms of large figures and vast projects.</p>
+
+<p>I could cite many examples of the new Gospel of French Self-Supply.
+Before the war France manufactured lathes that were beautiful examples
+of art and precision. The firms that made them were old and solid and
+took infinite pride in their product. Now they realise that output must
+dominate. A simple type of machine has been chosen<span class='pagenum'><a name="Page_102" id="Page_102">[Pg 102]</a></span> as model and will
+henceforth be made in large quantities.</p>
+
+<p>Then there is the sewing machine. Before the war two
+groups&mdash;Anglo-American and German&mdash;controlled the French market. By the
+ingenious use of export premiums, the Germans had the best of it.</p>
+
+<p>"Why always pay tribute to strangers?" now asks the French housewife. So
+far as Germany is concerned, this question is already settled. But the
+American sewing machine will have to struggle for its existence
+hereafter in France, for plans have been made for at least three huge
+factories for its production.</p>
+
+<p>Striking evidence of the growing French industrial independence of
+Germany is her advance in crucible making. For years S&egrave;vres vied with
+Limoges for ceramic honours. To-day the vast plant which once produced
+the most exquisite and delicate ware in the world is now producing the
+less lovely but more serviceable crucibles, condensers and retorts
+necessary for the distillation of the powerful acid used in modern high
+explosives. Previous to the war, the Central Empire had a monopoly on
+this market. In<span class='pagenum'><a name="Page_103" id="Page_103">[Pg 103]</a></span>deed, much of the pottery and glassware used in
+laboratories and chemical factories was made in Bohemia and marketed by
+Germany. Now the S&egrave;vres plant is shipping these goods to England and
+Russia.</p>
+
+<p>So, too, with dye stuffs. A whole new French colouring industry is being
+created. A Soci&eacute;t&eacute; d'Etude has been formed to make a scientific survey
+and this will be replaced by a National Company to undertake the
+manufacture of all coal tar products.</p>
+
+<p>The use of a certain number of new war factories has been guaranteed to
+the company by the Minister of War. Typical of the purpose which will
+animate the enterprise is one of the articles of the National Company
+which provides that the Director of the Dye Stuff Industry must be of
+French birth. An agreement has also been made with England and Italy to
+protect the colour output of the three countries with a high tariff
+after the war. Here you find one tangible evidence of the working out of
+the Paris Economic Pact.</p>
+
+<p>Even while the invader's hand still lies heavy upon the land, France
+looks ahead to reconstruction. Last summer Paris flocked<span class='pagenum'><a name="Page_104" id="Page_104">[Pg 104]</a></span> to a graphic
+exhibition of how to rebuild a destroyed city. It was called La Cit&eacute;
+R&eacute;constitu&eacute;, and was held in the Tuileries Garden. Here you could see
+the modern way of making a Phoenix rise quickly out of the ashes. There
+were model schoolhouses, churches, factories, and cottages, all with
+standardised parts which could be thrown together in an almost
+incredibly short time.</p>
+
+<p>With Self-Sufficiency has come a desire for new business knowledge. Not
+long ago an American business man who has lived in Paris for many years,
+received a letter from a young French friend in the trenches at Verdun.
+The soldier wrote:</p>
+
+<p>"I realise that when this war is over we must be better equipped than
+ever before to meet world business competition. I want to be a better
+salesman. Please send me some books on American salesmanship and also
+some of the American trade papers. I have begun the study of Spanish
+because I believe we are going to have our part in the Latin-American
+trade." Here was a young Frenchman risking his life every moment in one
+of the greatest battles the world has<span class='pagenum'><a name="Page_105" id="Page_105">[Pg 105]</a></span> ever known: yet in the midst of
+death he was looking forward to a new business life.</p>
+
+<p>The whole attitude of the Frenchman toward life has undergone a change,
+first under the stress of ruthless war, and under the spur of his
+kindling desire for rehabilitation. Formerly, for example, the French
+loathed to travel. When he knew he was going away on a journey, he spent
+a month telling his relatives good-bye. Now he packs his bag and is off
+in an hour to Lyon, Marseilles, Bordeaux, or any other place where
+business might dictate.</p>
+
+<p>The new and efficient French industrial machine is not the only factor
+that American business in France must reckon with after the war. The
+French woman is fast becoming a force, thus setting up an altogether
+unequal and almost unfair competition, because to shrewd wit and
+resource is added the power of sex and beauty.</p>
+
+<p>In France, as most people know, the woman exerts an enormous influence,
+regardless of her social class. In all regulated bourgeois families the
+wife holds the purse strings; in the small shops she keeps the<span class='pagenum'><a name="Page_106" id="Page_106">[Pg 106]</a></span> cash and
+runs things generally. No average Frenchman would think of embarking on
+any sort of enterprise without first talking it over with his <i>femme</i>,
+who is also his partner. This team work lies at the root of all French
+thrift.</p>
+
+<p>The woman of the lower class has met the grim emergency of war with
+sacrifice and courage. Not only has she faced the loss of those most
+dear with uncomplaining lips, but she has taken her man's place
+everywhere. You can see her standing Amazon-like in leather apron
+pouring molten metal in the shell factory; she drives you in a cab or a
+taxi; she runs the train and takes the tickets in the Underground: in
+short, she has become a whole new asset in the human wealth of the
+nation and as such she will help to make up for the inevitable shortage
+of men.</p>
+
+<p>Her sister of the upper class, at once the most practical and most
+feminine of her sex, is also doing her bit. She is the lovely thorn in
+the path of the American business promoter in France.</p>
+
+<p>Before the war, it was rare to find this type of woman competing with
+men in out<span class='pagenum'><a name="Page_107" id="Page_107">[Pg 107]</a></span>side business affairs, although her influence has always
+counted immensely in official life where she pulls the strings to get
+husband or lover Government preferment or concession.</p>
+
+<p>Since the war, however, necessity has sharply developed her latent
+business qualities. Now it is not unusual to find her in direct
+competition, using all those delightful charms with which Nature has
+endowed her. This is especially true of widows and women whose husbands
+are at the front. They often rely more upon persuasion than upon any
+technical or practical knowledge. One reason why they succeed is their
+almost uncanny knowledge of men. And this often enables them to grasp
+swiftly the clue that business opportunity offers.</p>
+
+<p>One night at dinner a Colonel's widow, a gracious and beguiling lady,
+heard that the French Government was in the market for 50,000 head of
+cattle. The next morning she sent half a dozen cables to South America,
+got options, and in three days her formal bid was at the War Office.
+Within a week she had the contract.</p>
+
+<p>I know of a case of the wife of a Colonel at the front, who heard one
+day at lunch<span class='pagenum'><a name="Page_108" id="Page_108">[Pg 108]</a></span> that the War Office needed 50,000 sacks of flour for the
+army at Saloniki. That same day she put the matter before some American
+brokers in Paris, who wired to their New York firm and received the
+usual American reply: "Am not interested in the French trade now. Will
+wait until after the war."</p>
+
+<p>With the utmost difficulty the woman was able to secure 10,000 sacks by
+way of Italy and Switzerland. She is not likely to seek American sources
+of supply soon again.</p>
+
+<p>An American got a tip one day that a certain contract for machine tools
+was available. He had an appointment for lunch, so he said to himself:
+"Why hurry? These French people are slow. I'll get busy this afternoon
+or to-morrow."</p>
+
+<p>When he went to the establishment in question the next day, he found
+that an exquisitely gowned woman had just preceded him; indeed, the
+fragrance of the perfume she used still hovered about the outer office.
+The man cooled his heels for half an hour when the lovely feminine
+vision flashed by him going out. He started to make his selling talk to
+the Purchasing Agent, who said, at the first opening:<span class='pagenum'><a name="Page_109" id="Page_109">[Pg 109]</a></span></p>
+
+<p>"I am extremely sorry, Monsieur, but we have just closed the contract
+with Madam Blank who left a few moments ago."</p>
+
+<p>The New France has brought forth a New Woman!</p>
+
+<p>Through all the organised approach to Self-Sufficiency and Economic
+Rehabilitation, France has not lost sight of her grudge against the
+Germans. Indeed, no phase of her business life to-day is more
+picturesque than the campaign now in full swing not only against
+Teutonic trade, but against any resumption of commercial relation with
+the hated enemy across the Rhine. Right here you get a striking
+difference between English and French methods. While Britain takes out
+some of her enmity against German trade in eloquent conversation, France
+has gone about it in a practical way, shot through with all the colour
+and imagination that only the French could employ upon such procedure.</p>
+
+<p>Preliminary to this campaign was a characteristic episode. Almost with
+the flareup of war, the French mind turned sentimentally to those
+fateful early Seventies when Germany in the flush of her great victory
+seized<span class='pagenum'><a name="Page_110" id="Page_110">[Pg 110]</a></span> the fruits of that triumph. Some of those fruits were embodied
+in the famous Treaty of Frankfort in which the Teuton clamped the mailed
+fist down on every favoured French trade relation.</p>
+
+<p>The war automatically annulled this treaty, and although the nation was
+in the first throes of a struggle that threatened existence, it
+celebrated the revocation in characteristic fashion. Millions of copies
+of the Frankfort Treaty were printed and sold on the streets of Paris
+and elsewhere. The excited Frenchman rushed up and down brandishing his
+copy and saying: "Now we will ram this treaty down the throat of the
+Boche!"</p>
+
+<p>This emotional prelude was now followed by a definite crusade for the
+elimination of German goods. Anti-German societies were formed all over
+the country. Backing these up are dozens of other formidable
+organisations, such as Chambers of Commerce and Business Clubs. Typical
+of the campaign is the formation of a Buyers' League which is intended
+to assemble all persons who will take a resolution never to buy a German
+product and be satisfied for the remainder<span class='pagenum'><a name="Page_111" id="Page_111">[Pg 111]</a></span> of their lives with the
+French manufactured article.</p>
+
+<p>Wherever you go in France, you find some concrete and striking evidence
+of the Anti-German wave. When you get a bundle from a Paris shop, you
+are likely to find stuck on it a brilliantly coloured stamp showing a
+pair of bloody hands holding a number of packages, the largest one
+labeled "made in Germany." Under it is the sentence in French reading:
+"Frenchmen, do not buy German products. The hands that made are reddened
+with the blood of our soldiers."</p>
+
+<p>There is great variety in these stamps, which are used on letters and
+packages. One of the most popular shows a helmeted German with a brutal
+face holding a smiling mask before his visage. In one hand he holds a
+bundle marked "Made in Germany." On this stamp is the inscription:
+"Mistrust their smiles&mdash;in every German there is a spy."</p>
+
+<p>Still another and equally popular stamp pictures a soldier with bandaged
+head standing by a prostrate comrade and pointing to a fleeing German.
+The inscription reads: "We chase the Germans during the war.<span class='pagenum'><a name="Page_112" id="Page_112">[Pg 112]</a></span> You,
+civilians, will you allow them to return after peace?"</p>
+
+<p>One stamp used much throughout the Provincial French cities shows a
+woman in deep mourning weeping over a grave marked with a cross
+surmounted by a red soldier cap. The woman is supposed to be saying
+these words: "French people, buy no more German products. Remember this
+grave."</p>
+
+<p>A companion stamp shows a figure representing the French Republic and
+holding the tri-colour. The flag is attached to a spear with which she
+is piercing the breast of a German eagle on the ground. At her side is
+the national bird of France, the Cock, crowing triumphantly. Underneath
+are the words: "Refuse all German products."</p>
+
+<p>Similar in idea is another dramatic conception showing a white robed
+female figure holding a battle axe in one hand and pointing with the
+other to a burning cathedral. Her words are: "Frenchmen, do not consume
+any German products. Remember 1914."</p>
+
+<p>Most of the large French cities have their own Anti-German stamps which
+are enlarged and used on billboards as posters. A<span class='pagenum'><a name="Page_113" id="Page_113">[Pg 113]</a></span> typical city stamp is
+that of Lyon, which shows a Cock in brilliant colours standing proudly
+in the red and blue rays of a white sun. Attached is the legend:
+"National League of Defence of French Interests&mdash;The Anti-German League:
+Buy French Products."</p>
+
+<p>The City of Marseilles has a stamp showing the French Cock standing on a
+German helmet surrounded by the words "Anti-German League." Elsewhere on
+the stamp is the inscription: "No more of the people&mdash;No more German
+products."</p>
+
+<p>Whether the Frenchman buys or sells, he has poked under his nose or
+flaunted before his eyes every hour of the business day some concrete
+evidence that his country has put the German people and their products
+under the ban.</p>
+
+<p>In connection with this campaign are some facts of utmost significance
+to the American business man who has studied the intent and purpose of
+the Paris Economic Pact which is described in a previous chapter, and
+which declared for an Allied war of economic reprisal against Germany
+and the other Central Powers. In that chap<span class='pagenum'><a name="Page_114" id="Page_114">[Pg 114]</a></span>ter, as you may recall, the
+point was made that since individuals and not nations do business, the
+Pact was likely to fail.</p>
+
+<p>With their usual intelligence, the French understand this, and their
+whole educational campaign at home is to make the individual Frenchman
+immune against the lure of the cheap German products. The French know
+that it is the sum of individual French resistance to German buying that
+will keep the German product forever outside the realm of the Republic.</p>
+
+<p>Indeed, the clearest-minded men in France to-day believe that more
+commercial advantage will accrue to France by the intensive development
+of her resources, the perfection of old industries and the creation of
+new ones than in the formation of committees devoted to plans for
+commercial alliances dedicated to reprisal. In other words, this helps
+to bear out the theory held in many quarters that the economic pact is
+after all merely a campaign document and utterly impracticable.</p>
+
+<p>In France there are other signs that point to a rift in the Pact. While
+I was in Paris, a well known Senator pointed out that as<span class='pagenum'><a name="Page_115" id="Page_115">[Pg 115]</a></span> soon as the
+war ended France would need coal and would look to Italy for it as she
+had done in the past. To obtain her coal more cheaply than she is now
+doing from the United States or England, Italy would very likely make
+concessions to Germany in order to obtain German fuel. The result would
+be an interchange of merchandise between the two countries regardless of
+the decree of the Paris Pact. The question arises: Could France place
+restrictions upon the Italian frontier to the annoyance of her Allies?</p>
+
+<p>Meanwhile France is seeking immunity from any future coal crisis by
+developing a system of hydraulic power which will not only be
+economical, but will also help to cut down her imports. It is just one
+more phase of the ever-widening programme of Self-Sufficiency.</p>
+
+<p>Despite our past blunders, our present lack of organised initiative, and
+the efforts toward Self-Supply, the future holds a large business
+opportunity for America in France. As a matter of fact, half of the
+selling work is already registered because the French are eager and
+anxious to do business with their<span class='pagenum'><a name="Page_116" id="Page_116">[Pg 116]</a></span> great sister democracy across the
+sea. It is, therefore, up to the American exporter to capitalise the
+needs of the nation and the good will that it bears toward us. But it
+must be done now.</p>
+
+<p>For one thing, it cannot be achieved without constructive co-operative
+work. Groups of exporters must organise and establish offices in Paris
+and elsewhere in France. The reason for this is that the Frenchman
+abhors the fly-by-night salesman: he likes to feel that the man with
+whom he is trading has taken some sort of root in his midst.</p>
+
+<p>With organisation must come knowledge. Why did the Germans succeed so
+amazingly in France? Geographical proximity and the Frankfort Treaty
+helped some, but the principal selling power he wielded was that he
+lived with his clients, found out what they wanted, and gave it to them.
+If a French farmer, for example, wanted a purple plough share fastened
+to a yellow body, the German assumed that he knew what he wanted and
+made it for him. The average American exporter, on the other hand, has
+always assumed that the foreign customer had to take what was given to
+him. For this rea<span class='pagenum'><a name="Page_117" id="Page_117">[Pg 117]</a></span>son we have failed in South America and for this
+reason we will fail in France unless we change our methods. Knowledge is
+selling power.</p>
+
+<p>We must be prepared to give the French long credits, and if necessary,
+finance French enterprises. Despite her immense gold hoardings, she may
+feel an economic pinch after the war. We must also have sound and
+organised French credit information.</p>
+
+<p>Our salesmen must know the French language and sympathise with the
+French temperament. Give the French buyer a ghost of a chance and he
+will meet you more than half way. Unlike the stolid Englishman he is
+plastic, adaptable and imaginative. Understanding is a large part of the
+trade battle.</p>
+
+<p>We must accumulate large stocks of American goods in France to indulge
+the purchaser in his favourite occupation of long and elaborate choosing
+and to meet demands for renewal. To ship these goods we must have our
+own bottoms. Here, as elsewhere in the whole export outlook, is the old
+need of a merchant marine.</p>
+
+<p>But we will never realise our trade des<span class='pagenum'><a name="Page_118" id="Page_118">[Pg 118]</a></span>tiny in France without
+reciprocity. We cannot sell without buying. France looks to us to take
+part of the huge flood of goods that once went to Germany. We take some
+of her wine: we must take more. We buy her silks and frocks: the
+American market for them must now be widened. We depended upon Germany
+for many of our toys: France expects the Anglo-Saxon nursery henceforth
+to rattle with the mechanical devices which will provide meat and drink
+for her maimed soldiers. And so on down a long list of commodities.</p>
+
+<p>All this means that before the mood cools we must conclude new
+commercial treaties with France and assure for ourselves a really
+favoured nation relation that carries the guarantee of a permanent
+foreign trade now so necessary to our permanent prosperity.</p>
+
+<p>In the last analysis you will find that it is France and not England to
+whom we must look for the larger commercial kinship after the war. The
+spirit of the awakened Britain, so far as we are concerned, is the
+spirit of militant trade conquest: the dominant desire of the speeded-up
+France is benevolent Self-Sufficiency.<span class='pagenum'><a name="Page_119" id="Page_119">[Pg 119]</a></span></p>
+
+<p>Whether England realises her vast dream remains to be seen. But one
+thing is certain: No man can watch France in the supreme Test of War
+without catching the thrill of her heroic endeavour, or feeling the
+influence of that immense and unconquerable serenity with which she has
+faced Triumph and Disaster. They proclaim the deathlessness of her
+democracy, the hope of a new world leadership in art and craft.</p>
+
+<p>She will be a worthy trade ally.</p>
+
+<hr />
+<p><span class='pagenum'><a name="Page_120" id="Page_120">[Pg 120]</a></span></p>
+<h2><a name="V_Saving_for_Victory" id="V_Saving_for_Victory"></a>V&mdash;<i>Saving for Victory</i></h2>
+
+<p>By making patriotism profitable, England has enlisted an Army of Savers
+and launched the greatest of all Campaigns of Conservation. No contrast
+in the greatest of all conflicts is so marked as this flowering of
+thrift amid the ruins of a mighty extravagance. The story of Britain's
+"Economy First" campaign is a chapter of regeneration through
+destruction that is full of interest and significance for every man,
+woman, and child in the United States. Through self-denial a complete
+revolution in national habits has begun. Out of colossal evil has come
+some good.</p>
+
+<p>It has taken a desperate disease to invoke a desperate remedy. The
+average American, firm in his belief that he holds a monopoly on world
+waste, has had, almost without his knowledge, a formidable rival in
+England these past years. Whether the visiting Yankee tourist helped to
+set the pace or not, the fact remains that when the war<span class='pagenum'><a name="Page_121" id="Page_121">[Pg 121]</a></span> broke over
+England she was as extravagant as she was unprepared.</p>
+
+<p>The Englishman, like his American brother, though unlike the Scotch, is
+not thrifty by instinct. He regards thrift as a vice. He prefers to let
+the tax gatherer do his saving for him. He believes with his great
+compatriot Gladstone that "it is more difficult to save a shilling than
+to spend a million."</p>
+
+<p>Contrasting the Englishman and the Frenchman in the matter of economy,
+you find this interesting parallel: With the Frenchman the first
+question that attends income is "How much can I <i>save</i>?" Saving is the
+supreme thing. With the Briton, however, it becomes a matter of "How
+much can I <i>spend</i>?" Saving is incidental.</p>
+
+<p>To associate thrift with the British workingman is to conceive a
+miracle. To be sure, he seldom had anything to save before the war. But
+with the speeding-up of industry to meet the insatiate hunger for
+munitions and the corresponding increase of from thirty to fifty per
+cent, even more, in wages, he suddenly began to revel in a wealth that
+he never dreamed was possible. The more<span class='pagenum'><a name="Page_122" id="Page_122">[Pg 122]</a></span> he made the more he spent. He
+squandered his financial substance on fine cigars, expensive clothes,
+and excessive drinks, while his wife bedecked herself in gaudy finery
+and installed pianos or phonographs in her house. No one thought of
+To-morrow.</p>
+
+<p>Just as it took the shock of a long succession of military reverses to
+rouse the English mind to the consciousness that the war would be long
+and bitter, so did the abuse of all this temporary and inflated war time
+prosperity bring to far-seeing men throughout England the realisation
+that the British people, and more especially those who worked with their
+hands, were booked for serious social and economic trouble when peace
+came, unless they saw the error of their wasteful ways.</p>
+
+<p>"What can we do to stem this tide of extravagance and at the same time
+plant the seed of permanent thrift," asked these men who ranged from
+Premier to Prelate. No one knew better than they the difficulties of the
+task before them. In England, as in America, thrift is more regarded as
+a vice than a virtue. Like the taste for olives it<span class='pagenum'><a name="Page_123" id="Page_123">[Pg 123]</a></span> is an acquired
+thing. To spend, not to save, is the instinct of the race.</p>
+
+<p>But there were other and equally serious reasons why all England should
+buck up financially and make every penny do more than its duty. First
+and foremost was the terrific cost of the war that every day took its
+toll of $25,000,000; second was the enormous increase in imports and the
+diminished flow of exports, a reversal of pre-war conditions that meant
+that England each day was buying $5,000,000 worth of goods more than
+other countries were purchasing from her; third was the human shrinkage
+due to the incessant demand of battlefield and factory. Everywhere was
+colossal expenditure of men and money: nowhere existed check or
+restraint. Something had to be done.</p>
+
+<p>It was generally admitted that the first thing for everybody to do was
+to spend less on themselves than in times of peace. When, where and how
+to save became the great question. To save money at the cost of
+efficiency for essential and urgent work was not true economy. "But,"
+said the thrift promoters, "waste is possible even in the process of
+attaining efficiency. For exam<span class='pagenum'><a name="Page_124" id="Page_124">[Pg 124]</a></span>ple, people may eat too much as well as
+too little, they may buy more clothes than they actually need, ride when
+they could walk, employ a servant when they could do their own work, use
+their motors when they could travel in a tram."</p>
+
+<p>Thus every class came within the range of the lightning that was about
+to strike at the root of an ancient evil.</p>
+
+<p>The start was interesting. Before the war was a year old definite order
+emerged of what was at the beginning a scattered protest against
+reckless spending. But long before the first organised message of saving
+went to the home and purse of the worker, the rich began to economise.
+Here is where you encounter the first of the many ironies and contrasts
+that mark this whole campaign. The people who could most afford to be
+extravagant were the first to draw in their horns. This, of course, was
+not particularly surprising because the rich are naturally thrifty. It
+is one reason why they get and stay rich.</p>
+
+<p>Among the pioneer organisations was the Women's War Economy League
+founded and developed by a group of titled women<span class='pagenum'><a name="Page_125" id="Page_125">[Pg 125]</a></span> who got hundreds of
+their sisters to pledge themselves to give up unnecessary entertaining,
+not to employ men servants unless ineligible for military service, to
+buy no new motor cars and use their old ones for public or charitable
+work, to buy as few expensive articles of clothing as possible, to
+reduce in every way their expenditures on imported goods, and to limit
+the buying of everything that came under the category of luxuries.
+Champagne was banned from the dinner table, d&eacute;collet&eacute; gowns disappeared:
+men substituted black for white waistcoats in the evening.</p>
+
+<p>The rich really needed no organised stimulus to retrench. The great
+target for attack was the mass of the population who did not know what
+it meant to save and who required just the sort of constructive lesson
+that an organised thrift movement could teach.</p>
+
+<p>Much of the increase in wages among the workers was going for food and
+drink. Hence the opening assault was made on the market bill.
+Fortunately, an agency was already in operation. At the outbreak of the
+war a National Food Fund was started to<span class='pagenum'><a name="Page_126" id="Page_126">[Pg 126]</a></span> feed the hungry Belgians. That
+work had become more or less automatic (the Belgians' appetite is a
+pretty regular clock), so its machinery was now trained to the twin
+conservation of British stomachs and savings.</p>
+
+<p>"Save the Food of the Nation," was the appeal that went forth on every
+side. "No One is too Rich or Poor to Help. Every man, woman and child in
+the country who wants to serve the state and help win the war can do so
+by giving thought to the question of conserving food. Since the great
+bulk of our food comes from abroad, it takes toll in men, ships and
+money. Every scrap of food wasted means a dead loss to the Nation in
+men, ships and money. If all the food that is now being wasted could be
+saved and properly used it would spare more money, more ships, more men
+for the National defence."</p>
+
+<p>Now began a notable campaign of education which was carried straight
+into the kitchen. Food demonstrators whose work ranged from showing the
+economy of cooking potatoes in their skins to making fire-less cookers
+out of a soap box and a bundle<span class='pagenum'><a name="Page_127" id="Page_127">[Pg 127]</a></span> of straw, went up and down the Kingdom
+holding classes. In town halls, schools, village centres and
+drawing-rooms, mistress and maid sat side by side. "Waste nothing," was
+the new watchword.</p>
+
+<p>Backing up the uttered word was a perfect deluge of literature that
+included "Hand Books for House Wives," "Notes on Cooking," "Hints for
+Saving Fuel," "Economy in Food," in fact, dozens of pamphlets all
+showing how to make one scrap of food or a single stick of wood do the
+work of two.</p>
+
+<p>The people behind this movement knew that with waste of food was the
+kindred waste of money. They realised, too, that even the most effective
+preachment for food economy must inevitably be met by the cry,
+"Everybody must eat." With money, on the other hand, there seemed a
+better opportunity to drive home a permanent thrift lesson. So the
+forces that had built the bulwark around the English stomach now set to
+work to rear a rampart about the English pocketbook.</p>
+
+<p>Circumstances played into their hand. The Great War Loan of
+$3,000,000,000 had just been authorised. "Why not make this loan the
+text of a great National thrift les<span class='pagenum'><a name="Page_128" id="Page_128">[Pg 128]</a></span>son and give every working man and
+woman a chance to become a financial partner of the Empire," said the
+saving mentors. It was decided to put part of this loan within the range
+of everybody, that is, to issue it in denominations from five shilling
+scrip pieces up, to sell it through the post office and thus bring the
+new savings bank to the very doors of the people.</p>
+
+<p>Again a machine was needed, and once more as in the case of the food
+campaign one was well oiled and accessible. It was the organisation that
+had raised, by eloquent word and equally stimulating poster and
+pamphlet, the great volunteer army of 3,000,000 men. Just as it had
+drawn soldiers to the fighting colours, so did it now seek to lure the
+savings of the people to the financial standard of the nation.</p>
+
+<p>The Parliamentary Recruiting Committee became the Parliamentary War
+Savings Committee and it loosed a campaign of exploitation such as
+England had never seen before. From newspapers, bill boards and rostrums
+was hurled the injunction to buy the War Loan and help mould the Silver
+Bullet that would crush the Germans. It was<span class='pagenum'><a name="Page_129" id="Page_129">[Pg 129]</a></span> literally a "popular loan"
+in that the five shilling short-term vouchers, bought at the post
+office, and which paid 5 per cent, could be exchanged when they had
+grown to five pounds for a share of long-term War Stock paying 4&frac12; per
+cent. The higher rate of interest was the inducement to begin saving and
+it worked like a charm.</p>
+
+<p>Tribute to the efficacy of this programme is the fact that more than
+1,000,000 English workers purchased the War Loan. Through this procedure
+they learned, what most of them did not know before, that when you put
+money out to work it earns more money. It meant that they had become
+investors and were starting on the road to independence.</p>
+
+<p>But this campaign, admirable as it was in scope and execution, failed in
+its larger purpose of reaching the great mass of the people. While more
+than 1,000,000 workers participated in the loan their holdings really
+comprised but a small percentage of the immense total. The bulk of the
+buying was by banks, corporations, trustees, and wealthy individuals.
+The message, therefore, of permanent thrift combined with a more or
+less<span class='pagenum'><a name="Page_130" id="Page_130">[Pg 130]</a></span> continuous investment opportunity for every man still had to be
+delivered. All the while the Empire hungered for money as well as for
+men.</p>
+
+<p>Such was the state of affairs when the Chancellor of the Exchequer
+appointed the Committee on War Loans for the Small Investor. It had two
+definite functions: to raise funds for the national defence and to
+provide through the medium selected some simple and accessible means for
+the employment of the average man's money.</p>
+
+<p>This Committee recommended that an issue be made of Five Per Cent
+Exchequer Bonds in denominations of five, twenty and fifty pounds to be
+sold at all post offices. It was an excellent idea and was immediately
+authorised by the Treasury. The Exchequer Bond became part of the
+swelling flood of British war securities and might have had a
+distinction all its own but for the enterprise and sagacity of one man
+who happened to be a member of this Committee.</p>
+
+<p>That man was Sir Hedley Le Bas. You must know his story before you can
+go into the part that he played in the great drama of British investment
+that is now to be un<span class='pagenum'><a name="Page_131" id="Page_131">[Pg 131]</a></span>folded. A generation ago he was the lustiest lad in
+Jersey, his birthplace. His feats as swimmer were the talk of a race
+inured to the hardships of the sea. After seven years in the Army he
+came to London to make his fortune. From an humble clerical position he
+rose to be head of one of the great book publishing houses in Great
+Britain, employing over 400 salesmen, spending over a quarter of a
+million dollars a year in advertising alone.</p>
+
+<p>Sir Hedley is big of bone, dynamic of personality, more like the alert,
+wideawake American business man than almost any other individual I have
+ever met in England. One day he gave the British publishing business the
+jolt of its long and dignified life by taking a whole page in the <i>Daily
+Mail</i> to advertise a single book. His colleagues said it was
+"unprofessional," that it violated all precedent. Sir Hedley thought to
+the contrary and in vindication of his judgment the book developed into
+a "best seller." That pioneer page in the <i>Mail</i> was the first of many.</p>
+
+<p>Prior to the outbreak of the present war, Sir Hedley had been consulted
+by the then<span class='pagenum'><a name="Page_132" id="Page_132">[Pg 132]</a></span> Minister of War as to the most advisable means of getting
+recruits.</p>
+
+<p>"Why don't you advertise?" he asked.</p>
+
+<p>"It's never been done before," replied the Minister.</p>
+
+<p>"Then it's high time to begin," said the hard-headed Jerseyman.</p>
+
+<p>His plan scarcely had time to be considered when the Great War broke.
+Sir Hedley was made a member of the Parliamentary Recruiting Committee
+and with Kitchener helped to face England's huge problem of raising a
+volunteer army. How was it to be done?</p>
+
+<p>Hardly had the new War Chief warmed the chair in his office down in
+Whitehall, than Le Bas came to him with this suggestion: "The quickest
+way to raise the new army is to advertise for men."</p>
+
+<p>Kitchener's huge bulk straightened: he looked surprised: the idea seemed
+unsoldierly, almost unpatriotic. But he knew Le Bas. After a moment's
+hesitancy:</p>
+
+<p>"All right. Go ahead."</p>
+
+<p>Under Le Bas was launched the publicity campaign which no man who
+visited England during its progress will ever forget.<span class='pagenum'><a name="Page_133" id="Page_133">[Pg 133]</a></span> This galvanic
+publisher geared all the Forces of Print up to the idea of selling
+Military Service. Instead of books the Merchandise was Men.</p>
+
+<p>The most lureful, colourful and effective posters that artist brain
+could possibly conceive flashed from every bill board in the Kingdom. No
+one could escape them.</p>
+
+<p>It was Le Bas who created the phrase "Your King and Country Need You"
+that went echoing throughout the Kingdom and drew more men to the
+colours perhaps than any other plea of the war.</p>
+
+<p>When the Parliamentary Recruiting Committee became the Parliamentary War
+Savings Committee, Le Bas went with it. Its first job was to sell the
+Great War Loan. The Treasury officials wanted it done in the usual
+dignified British way.</p>
+
+<p>At the first meeting of the Committee, Le Bas objected to this
+procedure. Early the next morning he went around to the house of
+Reginald McKenna, Chancellor of the Exchequer.</p>
+
+<p>"The Chancellor is in his bath," said the footman who opened the door.<span class='pagenum'><a name="Page_134" id="Page_134">[Pg 134]</a></span></p>
+
+<p>"Then I'll wait until he can get a robe on," said Le Bas.</p>
+
+<p>Fifteen minutes later, the man who holds the British purse strings sat
+clad in a dressing gown and listened to the suggestion that
+revolutionised British methods of financial salesmanship.</p>
+
+<p>"If we want to sell the War Loan, Mr. Chancellor," said Sir Hedley, "we
+will have to advertise in a big way. It's a business proposition and we
+must adopt business methods."</p>
+
+<p>"It sounds interesting," said the Chancellor. "Come to my office at ten
+and we will talk it over."</p>
+
+<p>It was then 8:30 o'clock. By the time he met the Chancellor at the
+Treasury he had dictated the whole outline of the advertising campaign.
+The scheme was adopted: the Government spent fifty thousand pounds
+advertising the loan but it sold every penny of it.</p>
+
+<p>This then was the type of man who had sat in the six meetings of War
+Loan for Small Investors and listened to many conventional suggestions.
+He instinctively knew that the Five Pound Exchequer Bond<span class='pagenum'><a name="Page_135" id="Page_135">[Pg 135]</a></span> was not a
+sufficient bait to hook the small savings of the great mass of the
+people.</p>
+
+<p>"We've got to make some kind of attractive offer," said Sir Hedley to
+himself. "In fact, we must give the investor something for nothing to
+make him lend his money to the country. A pound note looks big to the
+average Englishman. Why not give him a pound for every fifteen shillings
+and sixpence that he will lay aside for the use of the Nation? In other
+words, why not make patriotism profitable?"</p>
+
+<p>When he laid this plan before the Committee, it was unanimously
+approved. The maxim of "Fifteen and Six for a Pound" was now unfurled to
+the breezes and the super-campaign to corral the British penny was on,
+under the auspices of the National War Savings Committee which now
+superseded all other organisations as the head and front of the National
+Thrift idea.</p>
+
+<p>Although he had a strong selling appeal in the fact that he was giving
+the small British investor something for nothing, Sir Hedley realised
+that his first bid for savings must have the real punch of war in it.
+What was it to be?<span class='pagenum'><a name="Page_136" id="Page_136">[Pg 136]</a></span></p>
+
+<p>He thought a moment and then went over to the War Office where Lloyd
+George had just succeeded the lamented Kitchener.</p>
+
+<p>"What could a man buy for fifteen and six?" he asked the many-sided
+little Welshman who was progressively filling every important job in the
+Empire.</p>
+
+<p>"He could buy six trench bombs," was the reply.</p>
+
+<p>"What else?" queried the publisher.</p>
+
+<p>"He could get 124 cartridges or&mdash;"</p>
+
+<p>"That's enough!" exclaimed Le Bas. "I've got it!"</p>
+
+<p>Lloyd George looked a little startled, whereupon his visitor remarked:
+"You have given me just the thing I wanted. Wait until to-morrow and you
+will find out what it is."</p>
+
+<p>The very next day Lloyd George and a great part of the whole British
+Nation knew exactly what Sir Hedley got out of his interview with the
+War Minister, because the first advertisement announcing the new type of
+War Loan read like this:<span class='pagenum'><a name="Page_137" id="Page_137">[Pg 137]</a></span></p>
+
+<blockquote><p>"ONE HUNDRED AND TWENTY-FOUR CARTRIDGES FOR FIFTEEN AND SIX, AND
+YOUR MONEY BACK WITH COMPOUND INTEREST</p>
+
+<p>"Do you know that every 15/6 you put into War Savings Certificates
+can purchase 124 rifle cartridges?</p>
+
+<p>"How many Cartridges will you provide for our men at the Front?</p>
+
+<p>"For every 15/6 you put into War Savings Certificates now you will
+receive &pound;1 in five years' time. This is equal to compound interest
+at the rate of 5.47 per cent.</p>
+
+<p>"Each year your money grows as follows:</p>
+
+<p class='center'>In 1 year  it becomes 15/9<br />
+ &nbsp; In 2 years it becomes 16/9<br />
+ &nbsp; In 3 years it becomes 17/9<br />
+ &nbsp; In 4 years it becomes 18/9<br />
+In 5 years it becomes   &pound;1</p>
+
+<p>"If you need it you can withdraw your money at any time, together
+with any interest that has accrued."</p></blockquote>
+
+<p>This advertisement made a good many people sit up because it brought
+home for<span class='pagenum'><a name="Page_138" id="Page_138">[Pg 138]</a></span> the first time one concrete use of the money absorbed in war
+loans.</p>
+
+<p>The National War Savings Committee had two things to sell. One was the
+Five Per Cent Exchequer Bond: the other was the new Fifteen and Six War
+Savings Certificate. The promoters were quick to see that while the
+Exchequer Bond was very desirable, the principal effort must be
+concentrated on the War Savings Certificate for which the widest appeal
+and the best selling talk could be made.</p>
+
+<p>That it was a good "buy" nobody could deny. It was the obligation of the
+British Government: it was free from Income Tax: it could be cashed in
+at any time at a profit: and it made the owner part and parcel of the
+financing of the war. Every post office and nearly every bank became a
+selling agent. In short, it was a simple, cheap and worth-while
+investment absolutely within the scope of every one.</p>
+
+<p>At the outset the sale was restricted to those whose income did not
+exceed $1,500, the purpose being to keep the investment among the wage
+earners. So many munition workers were receiving such large in<span class='pagenum'><a name="Page_139" id="Page_139">[Pg 139]</a></span>comes
+that this ban was removed. The only limitation imposed was that no
+individual could hold more than 500 Certificates. This did not prevent
+the various members of a family, for example, from each acquiring the
+full limit.</p>
+
+<p>Having decided to make the War Savings Certificate its prize commodity,
+the Committee proceeded to launch a spectacular, even sensational
+promotion campaign. J. Rufus Wallingford in his palmiest days was never
+more persuasive than the literature which now fairly flooded Great
+Britain.</p>
+
+<p>The phrase "Your King and Country Need You" that had stirred the
+recruiting fever now had a full mate in the slogan "Saving for Victory"
+which began to loosen pounds and pence from their hiding places. The
+injunction that went forth everywhere was</p>
+
+<p class='center'>"WORK HARD: SPEND LITTLE:<br />SAVE MUCH"</p>
+
+<p>From every bill board and every newspaper were emblazoned:<span class='pagenum'><a name="Page_140" id="Page_140">[Pg 140]</a></span></p>
+
+<blockquote><p class='center'>"SIX REASONS WHY <i>YOU</i> SHOULD SAVE"</p>
+
+<p>Here are the reasons:</p>
+
+<p>1. Because when you save you help our soldiers and sailors to win
+the war.</p>
+
+<p>2. Because when you spend on things you do not need you help the
+Germans.</p>
+
+<p>3. Because when you spend you make other people work for you, and
+the work of every one is wanted now to help our fighting men, or to
+produce necessaries, or to make goods for export.</p>
+
+<p>4. Because by going without things and confining your spending to
+necessaries you relieve the strain on our ships and docks and
+railways and make transport cheaper and quicker.</p>
+
+<p>5. Because when you spend you make things dearer for every one,
+especially for those who are poorer than you.</p>
+
+<p>6. Because every shilling saved helps twice, first when you don't
+spend it and again when you lend it to the Nation.</p></blockquote><p><span class='pagenum'><a name="Page_141" id="Page_141">[Pg 141]</a></span></p>
+
+<p>The word "Save" which had dropped out of the British vocabulary suddenly
+came back. It was dramatised in every possible way and it became part of
+a new gospel that vied with the war spirit itself.</p>
+
+<p>The National War Savings Committee became a centre of activity whose
+long arms reached to every point of the Kingdom. Branch organisations
+were perfected in every village, town and county: the Admiralty and the
+War Office were enlisted: through the Board of Education every school
+teacher became an advance agent of thrift: the Church preached economy
+with the Scripture: in a word, no agency was overlooked.</p>
+
+<p>The sale of Certificates started off fairly well. On the first day more
+than 2,000 were sold and the number steadily increased. But while many
+individuals rallied to the cause, there was not sufficient team work.</p>
+
+<p>One serious obstacle stood in the way. While fifteen shillings and a
+sixpence is a comparatively small sum to a man who makes a good income,
+it looms large to the wage earner, especially when it has to be "put by"
+and then goes out of sight for four or five years. So the National War
+Savings Com<span class='pagenum'><a name="Page_142" id="Page_142">[Pg 142]</a></span>mittee set about establishing some means by which the
+average man or woman could start his or her investment with a sixpence,
+that is, twelve cents. Even here there was a difficulty. Millions of
+people in England could save a sixpence a week, but the chances are that
+before they piled up the necessary fifteen and six to buy the first
+Certificate they would succumb to temptation and spend it.</p>
+
+<p>The English small investor, like his brother nearly everywhere, is a
+person who needs a good deal of urging or the power of immediate example
+about him. Thereupon the Committee said: "What seems impossible for the
+individual, may be possible for a group."</p>
+
+<p>Thus was born the idea of the War Savings Association, planned to enable
+a group of people to get together for collective saving and co-operative
+investment. This proved to be one of the master strokes of the campaign.
+From the moment these Associations sprang into existence, the whole War
+Savings Certificates project began to boom and it has boomed ever since.</p>
+
+<p>War Savings Associations are groups of<span class='pagenum'><a name="Page_143" id="Page_143">[Pg 143]</a></span> people who may be clerks in the
+same office, shop assistants in the same establishments, workers in the
+same factory or warehouse, people attending the same place of worship,
+residents in any well-defined locality such as a village or ward of a
+town, members of a club, the servants in a household: in short, any
+number of people who are willing to work together. Some have been
+started with 10 members, others with as many as 500. Up to the first of
+January nearly 10,000 of these Associations had been formed throughout
+the Kingdom.</p>
+
+<p>Now came the inspiration that was little short of genius for it enabled
+the lowliest worker who could only set aside a sixpence a week to become
+an intimate part of the great British Saving and Investment Scheme. The
+idea was this:</p>
+
+<p>If one man saves sixpence a week, it would take him thirty-one weeks to
+get a One Pound War Certificate. But if thirty-one people each save
+sixpence a week, they can buy a Certificate at once and keep on buying
+one every week. Thus their savings begin to earn interest immediately.
+Thus every War Savings Association became a co<span class='pagenum'><a name="Page_144" id="Page_144">[Pg 144]</a></span>-operative saving and
+investment syndicate&mdash;a pool of profit.</p>
+
+<p>How are the Certificates distributed? The usual procedure is to draw
+lots. In a small Association no member is ordinarily permitted to win
+more than one Certificate in a period of thirty-one weeks, except by
+special arrangement. Each Association, however, can make its own
+allotment rules. The value of winning a Certificate the first week is
+that the winner's 15/6 will have grown to one pound in four years and a
+half instead of five. This is broadly the financial advantage gained by
+being a member of an Association, although the larger reason is that it
+is more or less compulsory as well as co-operative saving.</p>
+
+<p>Britain is buzzing with these War Savings Associations. You find them in
+the mobilisation camps, on the training ships, on the grim grey fighters
+of the Grand Fleet, even in the trenches up against the battle line. The
+London telephone girls have their own organisation: sales forces of
+large commercial houses are grouped in thrift units: there are saving
+battalions in most of the munition works, and so it goes. In many of
+the<span class='pagenum'><a name="Page_145" id="Page_145">[Pg 145]</a></span> big mercantile establishments that have Associations, the weekly
+drawings of Certificates with all their elements of chance and profits
+are exciting events.</p>
+
+<p>Many Britishers shy at co-operation. For example, they like to save "on
+their own." To meet this desire, the War Savings Committee devised an
+individual saving and investment plan which begins with a penny, that is
+two cents. Any person can go to the Treasurer of a War Savings
+Association and get a blank stamp book. Each penny that he deposits is
+marked with a lead pencil cross in a blank square. When six of these
+marks are recorded, a sixpenny stamp is pasted on the blank space. As
+soon as the book contains thirty-one stamps it is exchanged for a War
+Savings Certificate.</p>
+
+<p>Still another plan has been devised to meet requirements of people who
+do not care to affiliate with the War Savings Associations. Any post
+office will issue a stamp book in which ordinary sixpenny postage stamps
+can be pasted. When thirty-one have been affixed they may be exchanged
+at the post office for a pound Savings Certificate. These books have
+this striking inscription on their<span class='pagenum'><a name="Page_146" id="Page_146">[Pg 146]</a></span> cover: "Save your Silver and it will
+turn into Gold! 15/6 now means a sovereign five years hence."</p>
+
+<p>The whole Savings Campaign is studded with picturesque little lessons in
+thrift. The London costers&mdash;the pearl-buttoned men who drive the little
+donkey carts&mdash;subscribed to $1,000 worth of Certificates in a single
+week, although they had made a previous investment of $4,000.</p>
+
+<p>In hundreds of factories the idea has taken root. In some of them War
+Savings subscriptions are obtained by means of deductions from wages.
+Employees can sign an authorisation for a certain amount to be taken
+each week or month out of their wages. They get accustomed to having
+two, three, four or five shillings lifted out of their wages and thus
+their saving becomes automatic.</p>
+
+<p>Often the employer helps the movement by contributing either the first
+or last sixpence of each Certificate or offering Certificates as bonuses
+for good conduct or extra work. When one small employer that I heard of
+pays his men their War Bonus, he gets them, if they are willing, to
+place two<span class='pagenum'><a name="Page_147" id="Page_147">[Pg 147]</a></span> sixpenny stamps on a stamp card, for which he deducts
+tenpence. The employees are thus given twopence for every shilling they
+save. When these cards bear stamps up to the value of 15/6 they are
+exchanged for War Savings Certificates.</p>
+
+<p>No field has been more fruitful than the public schools where the thrift
+seed has been planted early. In hundreds of public educational
+institutions Savings Clubs have been formed to buy Certificates. In
+Huntingdonshire, where there were less than 150 pupils, more than $35.00
+was subscribed in a single morning. At Grimsby a successful trawler
+owner gave $5,000 to the local teachers' association to help the War
+Savings crusade. A shilling has been placed to the credit of every child
+who undertakes to save up for a War Savings Certificate, the child's
+payments being made in any sum from a penny up. Ninety-five per cent of
+the children in the town have begun to save. Similarly, a councillor of
+Colwyn Bay has offered to pay one shilling on each Certificate bought by
+the scholars of one of the town's schools, and also offered to add fifty
+per cent to all sums paid into the school savings bank<span class='pagenum'><a name="Page_148" id="Page_148">[Pg 148]</a></span> during one
+particular week, provided that the money was used to purchase War
+Savings Certificates.</p>
+
+<p>Almost countless schemes have been devised to instil, encourage and
+develop the thrift idea. In certain districts, patriotic women make
+house to house canvasses to collect the instalments for the
+Certificates. They become living Thrift Reminders. Tenants of model
+flats and dwelling houses pay weekly or monthly War Savings Certificates
+at the same time they pay their rent.</p>
+
+<p>That this economy and savings idea has gone home to high and low was
+proved by an incident that happened while I was in London. A man
+appeared before a certain well-known judge to ask for payment out of a
+sum of money that stood to his credit for compensation to "buy clothes."
+The judge reprimanded him sharply, saying, "Are you not aware that one
+of the principal War Don'ts is, 'Don't buy clothes: wear your old
+ones.'" With this he held up his own sleeve which showed considerable
+signs of wear. Then he added: "If I can afford to wear old garments, you
+can. Your application is dismissed."<span class='pagenum'><a name="Page_149" id="Page_149">[Pg 149]</a></span></p>
+
+<p>With saving has come a spirit of sacrifice as this incident shows: A
+London household comprising father, mother and two children moved into a
+smaller house, thus saving fifty dollars a year. By becoming teetotalers
+they saved another five shillings (one dollar and a quarter) and on
+clothes the same weekly sum. They took no holiday this summer: ate meat
+only three times a week, abstained from sugar in their tea, cut down
+short tramway rides, and the father reduced his smoking allowance. By
+these means they have been able to buy a War Savings Certificate every
+week.</p>
+
+<p>Just as no sum has been too small to save, so is no act too trivial to
+achieve some kind of conservation. People are urged to carry home their
+bundles from shops. This means saving time and labour in delivery and
+permits the automobile or wagon to be used in more important work. I
+could cite many other instances of this kind.</p>
+
+<p>Even the children think and write in terms of economy. At the annual
+meeting of the British Association for the Advancement of Science held
+last summer at Newcastle, an eminent doctor read a paper on "London<span class='pagenum'><a name="Page_150" id="Page_150">[Pg 150]</a></span>
+Children's Ideas of How to Help the War." The replies to his questions,
+which were sent to more than a thousand families, all indicated that the
+juvenile mind was thoroughly soaked with the savings idea. Some of the
+answers that he quoted were very humorous. A boy in Kensington gave the
+following reasons:</p>
+
+<p>"Eat less and the soldiers get more: If you make a silly mistake in your
+arithmetic tell your mother not to let you have any jam, and put the
+money saved in the War Loan: Stop climbing lamp-posts and save your
+clothes: Don't wear out your boots by striking sparks on the kerbstones:
+If you buy a pair of boots you are a traitor to your country, because
+the man who makes them may keep a soldier waiting for his: Don't use so
+much soap: Don't buy German-made toys."</p>
+
+<p>The net result of this mobilisation of the forces of thrift is that up
+to January the first 50,000,000 War Certificates had been sold,
+representing an investment of nearly 40,000,000 pounds or approximately
+$200,000,000. The striking feature about this large sum is that it was
+reared with the cop<span class='pagenum'><a name="Page_151" id="Page_151">[Pg 151]</a></span>pers of working men and women. "Serve by Saving" in
+England has become more than a phrase.</p>
+
+<p>All this was not achieved, however, without the most persistent
+publicity. England to-day is almost one continuous bill board. The
+hoardings which blazed with the appeal for recruits and the War Loan now
+proclaim in word and picture the virtues of saving and the value of the
+now familiar War Certificates. Likewise they embody a spectacular lesson
+in thrift for everybody.</p>
+
+<p>One of the most effective posters is headed "ARE YOU HELPING THE
+GERMANS?" Under this caption is the subscription:</p>
+
+<p>"You are helping the Germans when you use a motor car for pleasure: when
+you buy extravagant clothes: when you employ more servants than you
+need: when you waste coal, electric light or gas: when you eat and drink
+more than is necessary to your health and efficiency.</p>
+
+<p>"Set the right example, free labour for more useful purposes, save money
+and lend it to the Nation and so help your Country."</p>
+
+<p>A gruesome, but none the less striking,<span class='pagenum'><a name="Page_152" id="Page_152">[Pg 152]</a></span> poster is entitled: "What is
+the Price of Your Arms?"</p>
+
+<p>Then comes the following dialogue:</p>
+
+<p>Civilian: "How did you lose your arm, my lad?"</p>
+
+<p>Soldier: "Fighting for you, sir."</p>
+
+<p>Civilian: "I'm grateful to you, my lad."</p>
+
+<p>Soldier: "How much are you grateful, sir?"</p>
+
+<p>Civilian: "What do you mean?"</p>
+
+<p>Soldier: "How much money have you lent your Country?"</p>
+
+<p>Civilian: "What has that to do with it?"</p>
+
+<p>Soldier: "A lot. How much is one of your arms worth?"</p>
+
+<p>Civilian: "I'd pay anything rather than lose an arm."</p>
+
+<p>Soldier: "Very well. Put the price of your arm, or as much as you can
+afford, into Exchequer Bonds or War Savings Certificates, and lend your
+money to your Country."</p>
+
+<p>Still another is entitled "BAD FORM IN DRESS" and reads:</p>
+
+<p>"The National Organising Committee for War Savings appeals against
+extravagance in women's dress.<span class='pagenum'><a name="Page_153" id="Page_153">[Pg 153]</a></span></p>
+
+<p>"Many women have already recognised that elaboration and variety in
+dress are bad form in the present crisis, but there is still a large
+section of the community, both amongst the rich and amongst the less
+well to do, who appear to make little or no difference in their habits.</p>
+
+<p>"New clothes should only be bought when absolutely necessary and these
+should be durable and suitable for all occasions. Luxurious forms, for
+example, of hats, boots, shoes, stockings, gloves, and veils should be
+avoided.</p>
+
+<p>"It is essential, not only that money should be saved, but that labour
+employed in the clothing trades should be set free."</p>
+
+<p>Harnessed to the Saving and Investment Campaign is a definite and
+organised crusade against drink, ancient curse of the British worker,
+male and female. It is really part of the movement instituted by the
+Government at the beginning of the war to curtail liquor consumption.
+One phase is devoted to Anti-Treating, which makes it impossible to buy
+any one a drink in England. This was followed by a drastic restriction
+of drinking hours in all public places where<span class='pagenum'><a name="Page_154" id="Page_154">[Pg 154]</a></span> alcohol is served. Liquors
+may only be obtained now between the hours of 12 noon and 2:30 in the
+afternoon and from 6 to 9:30 at night. As a matter of fact, the only
+tipple that you can get at supper after the play, even in the smartest
+London hotels, is a fruit cup, which is a highly sterilised concoction.</p>
+
+<p>The War Savings Committee has borne down hard on the drinking evil and
+England's enormous yearly outlay for liquor&mdash;nearly a billion
+dollars&mdash;is used as a telling argument for thrift. A poster and a
+pamphlet that you see on all sides is headed, "THE NATION'S DRINK BILL,"
+and reads:</p>
+
+<p>"The National War Savings Committee calls attention to the fact that the
+sum now being spent by the Nation on alcoholic liquors is estimated at</p>
+
+<p class='center'>&pound;182,000,000 a year.</p>
+
+<p>"And appeals earnestly for an immediate and substantial reduction of
+this expenditure in view of the urgent and increasing need for economy
+in all departments of the Nation's life.</p>
+
+<p>"Obviously, in the present national emer<span class='pagenum'><a name="Page_155" id="Page_155">[Pg 155]</a></span>gency a daily expenditure of
+practically &pound;500,000 on spirits, wine and beer cannot be justified on
+the ground of necessity. This expenditure, therefore, like every other
+form and degree of expenditure beyond what is required to maintain
+health and efficiency is directly injurious to national interests.</p>
+
+<p>"Much of the money spent on alcohol could be saved. Even more important
+would be (1) the saving for more useful purposes of large quantities of
+barley, rice, maize and sugar; and (2) the setting free of much labour
+urgently needed to meet the requirements of the Navy and the Army.</p>
+
+<p>"To do without everything not essential to health and efficiency while
+the war lasts is the truest patriotism."</p>
+
+<p>Under the silent but none the less convincing plea of these posters,
+backed up by millions of leaflets and booklets explaining every phase of
+the Savings Campaign, the sale of Certificates rose steadily. From
+906,000 in May they jumped to nearly 3,000,000 in June. But this was not
+enough. "Let us make one big smash and see what happens," said the
+Committee. Thereupon came the idea for a War Savings Week,<span class='pagenum'><a name="Page_156" id="Page_156">[Pg 156]</a></span> which was to
+be a notable rallying of all the Forces of Thrift and Saving.</p>
+
+<p>No grand assault on any of the actual battle fronts was worked out with
+greater care or more elaborate attention to detail than this Savings
+Drive. No loophole to register was overlooked. It was planned to begin
+the work on Sunday, July 16th.</p>
+
+<p>First of all, the resources of the Church were mobilised. A Thrift
+sermon was preached that Sunday morning in nearly every religious
+edifice in the Kingdom. Following its rule to leave nothing to chance,
+the War Savings Committee prepared a special book of notes and texts for
+sermons which was sent to Minister, Leaders of Brotherhoods and Men's
+Societies. Texts were suggested and ready-made and ready to deliver
+sermons were included. One of these sermons was called "The Honour of
+the Willing Gift," another was entitled "The Nation and Its Conflict,"
+and its peculiarly appropriate text was "Well is it with the man that
+dealeth graciously and lendeth."</p>
+
+<p>A special address (in words of one syllable) to the children of England
+embodying the virtues of penny saving and show<span class='pagenum'><a name="Page_157" id="Page_157">[Pg 157]</a></span>ing how these pennies
+could be made to work and earn more pennies, as shown in the concrete
+example of a War Savings Certificate, was read by thousands of Sunday
+school teachers to their classes throughout the nation.</p>
+
+<p>Nearly every human being in Great Britain got the Message of Thrift that
+week. Boy Scouts and Girl Guides went from house to house bearing copies
+of the various kinds of instructive literature that had been prepared
+for the campaign. Typical of the thoroughness of the detail is the fact
+that in Wales all this material was printed in the Welsh language. The
+only country where no special efforts were made was Scotland, where to
+preach thrift is little less than an insult.</p>
+
+<p>For seven days and nights the almost incessant onslaught was kept up.
+When the smoke cleared and the count was taken, it was found that
+3,000,000 Certificates had been sold during the week while the total for
+the month was 10,700,000.</p>
+
+<p>So vividly was the phrase "War Savings Week" driven home that the War
+Savings Committee decided instantly to capitalise<span class='pagenum'><a name="Page_158" id="Page_158">[Pg 158]</a></span> this new asset. In a
+few days hundreds of bill boards and fences throughout the Kingdom
+blossomed forth with this sentence, painted in red, white and blue
+letters: "Make Every Week National War Savings Week."</p>
+
+<p>Not content with splashing the bill boards with the injunction to save,
+the National Committee hit upon what came to be the most popular medium
+for disseminating the Gospel of Thrift. It enlisted the movies. A film
+called "For the Empire" was made by a number of well known motion
+picture actors and actresses who gave their services free of charge.</p>
+
+<p>It was a moving and graphic story of the war showing how a certain
+English lad volunteers at the outset and goes to the front. You get a
+vivid picture of life in the trenches shown in actual war scenes. Then
+you see the young soldier fall while gallantly leading a charge: his
+body is brought home and he is buried with military honours. Then the
+screens hurls the question at the audience: "This man has died for his
+Country. What are you doing for the Nation in its hour of trial?" Now
+follows a vivid lesson in how<span class='pagenum'><a name="Page_159" id="Page_159">[Pg 159]</a></span> to save and buy a War Savings
+Certificate. This film has been shown in 2500 cinema theatres up to the
+first of the year and was booked to be shown in 1000 more within the
+next few months.</p>
+
+<p>So widespread has the Thrift movement become that the War Savings
+Committee now publishes its own monthly magazine called <i>War Savings</i>.
+The first issue appeared on September first and included such timely
+articles as "The Might of a Mite," a lesson in penny building: "The
+Final Mobilisation," which showed how the last &pound;100,000,000 would win
+the war: a third article explained the Economy Exhibition now being held
+all over Great Britain as part of the Thrift crusade. There was also an
+article on the War Saving movement by Reginald McKenna, Chancellor of
+the Exchequer, and a very illuminating appeal, "Every Household Must
+Help Win the War."</p>
+
+<p>This leads to one of the most instructive branches of the whole
+campaign, the one devoted to the elimination of waste in the household.
+Under the direction of the Patriotic Food League a voluminous and
+helpful<span class='pagenum'><a name="Page_160" id="Page_160">[Pg 160]</a></span> literature has been prepared and distributed. One booklet
+devoted to "Waste in the Well-to-do Household" shows how gas, coal and
+electric light bills, and the whole cost of living can be reduced.
+Another called "Household Economies" has helpful hints for mistress and
+maid: a third is "The Best Foods in War-Time." A stirring plea was made
+to every household in the shape of a card surmounted by a picture of
+Lord Kitchener and containing his famous warning to the English people:
+"Either the civilian population must go short of many things to which it
+is accustomed in times of peace, or our armies must go short of
+munitions and other things indispensable to them." Below this quotation
+was the stirring question:</p>
+
+<p>"Which is it to be: economy in the household or shortage in the Army and
+Navy?"</p>
+
+<p>Under the title of "War Savings in the Home" a plan of campaign has been
+sent to every household in England for operation during the whole period
+of war. Among other things it urges every family to give up meat for at
+least one day in the week, and in any case to use it only once a day.
+Margarine is recommended instead of but<span class='pagenum'><a name="Page_161" id="Page_161">[Pg 161]</a></span>ter. Home baking is strenuously
+suggested. It is shown how reduction in personal and household
+expenditure can be effected, for example, in the laundry by using
+curtains and linen that can be washed in the house. A special appeal to
+dispense with starched and ornamental lingerie is made. In these and
+many other ways the style of living is simplified so that the amount of
+domestic service in every home is greatly cut down and much labour set
+free for war work and general production.</p>
+
+<p>Indeed, no phase of Life or Work has escaped the Search-Light of the
+benevolent Inquisition which has wrought Conservation out of Waste.</p>
+
+<p>It has a larger significance than merely changing habits and converting
+pounds and pence into guns and shells. It means that England is creating
+a Sovereignty of Small Investors, thus setting up the safeguard that is
+the salvation of any land. The War Savings Certificate will have a
+successor in the shape of a more permanent but equally stable Government
+bond.</p>
+
+<p>When all is said and done you find that huge reservoirs of Savings at
+work form<span class='pagenum'><a name="Page_162" id="Page_162">[Pg 162]</a></span> a country's real bulwark. Through investment in small,
+accessible, and marketable securities a people become independent and
+therefore more efficient and productive. It mobilises money.</p>
+
+<p>Behind all the spectacular publicity that has swept hundreds of millions
+of British shillings into safe and profitable employment is a Lesson of
+Preparedness that America may well heed. It means a form of National
+Service that is just as vital to the general welfare as physical
+training for actual conflict. A nation trained to save is a nation
+equipped to meet the shock of economic crisis which is more potent than
+the attack of armed forces.</p>
+
+<p>What does it all mean? Simply this: no man can touch the English thrift
+campaign without seeing in it another evidence of a great nation's grim
+determination to win, whatever the sacrifice.</p>
+
+<p>The British people at home have come to realise that by personal economy
+and denial they can serve their country and their cause just as
+effectively as those who fight amid the blare of battle abroad. They are
+animated by a New Patriotism that is both prac<span class='pagenum'><a name="Page_163" id="Page_163">[Pg 163]</a></span>tical and self-effacing.
+It is giving the Englishman generally a higher sense of public devotion:
+it is making him a better and more productive human unit: it is
+equipping the nation to meet the drastic economic ordeal of to-morrow.</p>
+
+<p>If this lesson of conservation is heeded after the war and becomes a
+feature of the permanent British life, then the Great Conflict will
+almost have been worth its dreadful cost in blood and treasure. He who
+saves now will not have saved in vain.</p>
+
+<hr />
+<p><span class='pagenum'><a name="Page_164" id="Page_164">[Pg 164]</a></span></p>
+<h2><a name="VI_The_Price_of_Glory" id="VI_The_Price_of_Glory"></a>VI&mdash;<i>The Price of Glory</i></h2>
+
+<p>When John Jones of the U.S.A. puts his thousand dollars into an English,
+French, Russian or German bond he becomes part and parcel of the
+mightiest financial structure ever dedicated to a single purpose. He
+cannot tell how his funds will be used. They may buy a few hundred
+shells, clothe a thousand soldiers, feed a battalion or build a trench.
+All he knows is that his mite joins the continuous and colossal stream
+of expense that makes up the Red Wage of War.</p>
+
+<p>Now if John Jones employs his money in the stock or bond of a railroad,
+corporation, or public utility enterprise he can find out almost
+precisely what it does, for it lays down a track, provides new equipment
+or builds a power house. The investment, in short, represents something
+that produces more wealth.</p>
+
+<p>War, on the other hand, is a gigantic engine of destruction. Instead of
+building up, it tears down. It is a monster machine con<span class='pagenum'><a name="Page_165" id="Page_165">[Pg 165]</a></span>secrated to
+waste. The only possible dividend can be peace.</p>
+
+<p>The cost of the European conflict has a deeper interest for us than mere
+curiosity over staggering statistics. The reason is that we have joined
+the Paymaster's Corps. In other words, we have backed up our sympathy
+with cash. We are silent partners in the costliest and deadliest of all
+businesses.</p>
+
+<p>Up to the present stupendous struggle and with the exception of the
+Russo-Japanese War in which we floated several issues for the little
+yellow men, we have had no definite economic part in the wars that shook
+other nations. The losses in money and in men fell on the combatants.</p>
+
+<p>This war, which has shattered so many precedents, has drawn the United
+States out of its one-time aloofness. To the dignity of World Trader we
+have added the twin distinction of World Banker. Already we have poured
+out practically two billions of dollars for securities and credits of
+the warring countries. To this must be added an even greater sum
+representing our enormous war exports. The price, therefore, of whatever
+freedom emerges from these years of blood<span class='pagenum'><a name="Page_166" id="Page_166">[Pg 166]</a></span>shed intimately touches
+thousands of American pocketbooks in one way or another.</p>
+
+<p>What is the final toll that Battle will take: more important than this,
+what is the future of the treasure that we have laid on its Consuming
+Altar?</p>
+
+<p>Before making any analysis of the American stake in the cost of the
+European War, it is important to find out first just how much money has
+been expended and what the likelihood of future outlay will be. Like
+every other phase of the stupendous upheaval this one is both
+speculative and problematical.</p>
+
+<p>To deal with these European War figures is to flirt with Titanic
+Numerals. They are more the Playthings of the Gods than matters for mere
+mortals to juggle with.</p>
+
+<p>Up to the first of January, 1917, the total military expenses of both
+sides had reached approximately $61,000,000,000. It is only when you
+reduce this enormous sum to terms that every man and woman can
+understand that you begin to get some idea of the amazing cost of
+conflict.</p>
+
+<p>The amount of money expended for direct war purposes alone since August
+1, 1914,<span class='pagenum'><a name="Page_167" id="Page_167">[Pg 167]</a></span> is equal to three times the par value capitalization of all
+the American railroads. It represents fifty times the net national debt
+of the United States: eighteen times the amount of money in actual
+circulation in this country: and eleven times the total deposits in all
+our savings banks. With it you could build 146 Panama Canals or pay for
+the Napoleonic, Crimean, Russo-Japanese, South African and American
+Civil Wars and still have a surplus of $34,000,000,000 left. Such is the
+New and High Cost of War!</p>
+
+<p>The price of glory is being constantly advanced. The expenditures for
+the first year of the war were $17,500,000,000: for the second they had
+increased to $28,000,000,000: the estimate for the third year, to end
+August 1, 1917, at the present rate of spending is about
+$33,000,000,000. This means that by the time the next harvest moon
+shines (and no man in Europe to-day doubts that it will gleam on
+carnage), the war will have represented a sacrifice for military
+purposes alone of $78,500,000,000.</p>
+
+<p>Taking the daily cost of the war you find that England is $25,000,000
+poorer for<span class='pagenum'><a name="Page_168" id="Page_168">[Pg 168]</a></span> every twenty-four hours that pass: that France must check
+out $20,000,000: Russia $16,000,000: Italy $5,000,000. Little Roumania
+is cutting her war expenditure teeth at the rate of $1,000,000 per diem.</p>
+
+<p>Cross the frontier (for war expense is no respecter of cause or creed),
+and Germany is "discovered," as they say in play-books, spending
+$17,500,000 every day: Austria, Turkey and Bulgaria, $11,000,000. Thus
+between sunrises that break over these warring hosts very nearly
+$100,000,000 has gone up in smoke, splinters or ruin of some kind, or
+the upkeep of fighting.</p>
+
+<p>Since England's cost each day is heavier than any of the other countries
+at war, due to the fact that she is Financial First Aid to most of her
+Allies and is maintaining a fleet almost equal to all the others
+combined, let us reduce her enormous daily war bill of $25,000,000 to
+simpler form. It means that participation in the greatest of all wars is
+costing her $1,410,666 an hour, $17,361 a minute and a little over $289
+a second. At this rate of waste John D. Rockefeller would be bankrupt in
+forty days; Andrew Carnegie would be in the bread line in ten.<span class='pagenum'><a name="Page_169" id="Page_169">[Pg 169]</a></span> The sum
+is greater than the entire net public debt of Chicago; it equals the
+assessed valuation of all the taxable property in Poughkeepsie, New
+York.</p>
+
+<p>Work out this immense daily outlay from still another angle and these
+striking facts develop: the war is costing at the rate of 29 cents a day
+for every inhabitant of the United Kingdom: 31 cents for every
+individual in France: 22 cents for every person in the Kaiser's domain,
+and 6 cents for each human unit in the Russian Empire.</p>
+
+<p>Yet this well-nigh overwhelming rush of figures only accounts for the
+actual cost of hostilities. By this I mean arms and armament, food and
+military supplies, the construction, maintenance and renewal of fleets,
+the cost of transport and the pay of soldiers and sailors.</p>
+
+<p>To the vast sum already recorded must be added the loss registered by
+the destruction of cities, towns and villages, the sinking of ships, the
+wiping out of factories, warehouses, bridges, roads and railways.</p>
+
+<p>Then, too, you must allow for the almost incalculable productive loss
+due to the killing and maiming of millions of men: the<span class='pagenum'><a name="Page_170" id="Page_170">[Pg 170]</a></span> shrinkage of
+agricultural yields and the more or less general dislocation of the
+machinery of output. All these factors pile up a total, the calculation
+of which would almost cause a compound fracture of the brain. Sufficient
+to say it puts a terrific human and financial tax on coming generations
+and we in America will feel its effects when the world begins to
+readjust itself to the altered social and economic conditions which will
+come with peace.</p>
+
+<p>Of course the inevitable question arises: Who is paying the Scarlet
+Piper? In seeking the answer you encounter for the first time America's
+intimate and all-important part in the costly drama now being unfolded
+to the tune of billions. She sits in the armoured box-office with the
+Treasurers of the embattled nations.</p>
+
+<p>At the outset of the war all the belligerent countries believed that
+they could finance their needs without seeking neutral aid. Less than a
+year was enough to dispel this delusion. Although England and France
+immediately voted immense credits they were not long in finding out that
+they must back up their unprecedented mobilisation of<span class='pagenum'><a name="Page_171" id="Page_171">[Pg 171]</a></span> resources with
+outside help. They came to us.</p>
+
+<p>When the great Anglo-French loan of $500,000,000 was first discussed as
+a possible American financial feat, people over here began to wonder why
+Great Britain and France, whose combined wealth exceeds that of all the
+other nations at war, should want overseas assistance. Since the reason
+for this loan as well as the disposition of proceeds are practically the
+same as that of most of the other Allied issues in this country in which
+thousands of our investors have participated, it is well worth
+explaining because it also carries with it a lesson in international
+barter. Here it is:</p>
+
+<p>Before the war our foreign trade was growing fast. England and France,
+in particular, were good customers for our wheat and other foodstuffs,
+iron and cotton manufactures, oil and automobiles. In exchange we
+imported the product of many European factories.</p>
+
+<p>Business relations between nations are not settled like transactions
+between individuals and firms, that is, with checks or cash. They are
+settled by balances. Eng<span class='pagenum'><a name="Page_172" id="Page_172">[Pg 172]</a></span>land's imports from the United States, for
+example, are paid by her exports to us. Usually exports and imports so
+nearly balance that the difference is paid by gold or with the temporary
+use of bank credit. Therefore it is not a question of actual money but
+of exchange and this foreign exchange is a commodity whose value
+fluctuates with supply and demand.</p>
+
+<p>Along came the war. Millions of artisans in France and England were
+withdrawn from lathe and loom to fight in the battle line. What workers
+remained at their posts had to produce war supplies. Yet civilian and
+soldier needed food, clothing and arms. The demand for our products
+increased and the United States suddenly became the work-shop and the
+granary of the world.</p>
+
+<p>The Allies, in control of the seas, became our principal foreign
+customers. American exports soared: those of France and England declined
+correspondingly. A huge balance of trade&mdash;the biggest in our
+history&mdash;swung to our favour.</p>
+
+<p>This balance of trade had to be settled, but on an abnormal basis. What
+was ordi<span class='pagenum'><a name="Page_173" id="Page_173">[Pg 173]</a></span>narily a comparatively trivial matter of a few millions
+suddenly became an item of many millions and it was all owed on one
+side. The demand for exchange on New York greatly exceeded the supply
+and the inevitable dislocation happened. England and France had to pay a
+drastic premium on the American dollar. The English pound, normally
+rated $4.86, dropped to $4.50; the franc, ordinarily worth 19.29 cents,
+fell to 16.94 cents. This shrinkage in values was not due to any
+impairment of the resource or wealth of the Allies but because the
+machinery of international payment works automatically and
+unsentimentally.</p>
+
+<p>Here was a crisis that without aid from us might have eventually cost us
+dear. Rather than submit to the terrific drain on the exchange value of
+the pound and franc, England and France could have set about emulating
+the example of Germany and become self-sufficient. It was not a month's
+work or even a year's work, but ultimately it would have made these
+countries more independent of the United States after the war is over.<span class='pagenum'><a name="Page_174" id="Page_174">[Pg 174]</a></span></p>
+
+<p>Of course England and France could have met the situation by shipping
+gold. Each had a large reserve but the United States had all the gold it
+wanted, and still has. Besides, in such an emergency gold is an inert
+and unproductive commodity.</p>
+
+<p>Again, the Allies might have "dumped" their American securities
+representing an investment of over three billions of dollars, which
+would have upset the American stock market and sent prices down. Either
+one of these performances would have done us no good.</p>
+
+<p>It was important, therefore, for the benefit of all interest involved,
+that the Allies establish a credit in the United States that would
+enable them to buy freely and remove the costly handicap on American
+exchange. In a word, instead of having to pay their bills through an
+intricate mechanism that rose and fell with the tides of trade and put a
+premium on trading with us, a medium was needed that would restore the
+whole economic trade balance. It was as essential to us as to our
+customers.</p>
+
+<p>Hence the Anglo-French Five Hundred Million Dollar Loan was floated and
+Uncle<span class='pagenum'><a name="Page_175" id="Page_175">[Pg 175]</a></span> Sam became a war banker. This loan, however, was nothing more or
+less than the setting up of a credit of half a billion dollars for
+England and France in the United States. To put it in another way, it is
+just as if the two Allies had deposited this sum in an American bank and
+then drew checks against it for goods and raw materials made or mined in
+America. In a word, we lent to ourselves.</p>
+
+<p>Put out at a time when money was scarce, the loan would have been
+unpatriotic and uneconomic. But our banks were filled with idle cash:
+everywhere capital sought safe and profitable employment. Now you begin
+to see why these allied loans are really good business in more ways than
+one.</p>
+
+<p>What is our financial stake in the cost of the war: what does it yield:
+how is it safeguarded?</p>
+
+<p>Clearly to understand this whole situation you must know just how these
+foreign bonds are put out. There are two kinds. One is the internal loan
+issued in the money of the country whose name it bears. This means that
+if it is a French bond it is in terms of francs: if English it calls for
+pay<span class='pagenum'><a name="Page_176" id="Page_176">[Pg 176]</a></span>ment in pounds sterling: if Russian, in roubles: if German, in
+marks. An external loan, on the other hand, is issued in the money of
+the country in which it is floated. The Anglo-French loan is an example
+of this kind because both principal and interest are to be paid in
+United States gold coin. These internal and external loans may be direct
+obligations of the issuing governments or may be secured by collateral.</p>
+
+<p>There is still a third medium for the employment of American money in
+the war. Technically it is known as bank credit. Through this agency,
+foreign firms make deposits of money or collateral in the national banks
+of their respective countries and purchase goods in America through
+credits thus established for them in a group of New York banks or trust
+companies. The acceptances for the goods thus bought become negotiable
+documents and are bought and sold by institutions and investors at a
+discount.</p>
+
+<p>This evidence of debt is not the kind of foreign investment suitable for
+the man or woman with savings to employ because it is<span class='pagenum'><a name="Page_177" id="Page_177">[Pg 177]</a></span> more or less a
+banking transaction. These credits usually net about 6&frac12; per cent.</p>
+
+<p>With the exception of a comparatively small amount of German and
+Austrian Bonds bought in the main by natives of these two countries for
+purely sentimental and patriotic reasons, the entire bulk of European
+loans placed in America is for the Allied countries, principally England
+and France who are our heaviest customers in trade.</p>
+
+<p>The largest foreign loan brought out here so far is the Anglo-French 5
+per cent External Loan which was negotiated through J.P. Morgan &amp;
+Company&mdash;Fiscal Agents for the Allies over here&mdash;by the Commission
+headed by Lord Reading and Sir Edward Holden. It is the Joint and
+Several Obligation of the Governments of the United Kingdom of Great
+Britain and Ireland and the French Republic, is dated October 15, 1915,
+and is due five years after that date. It ranks first amongst the
+foreign war obligations of these countries.</p>
+
+<p>This was the first big credit arranged by England or France in the
+United States and the proceeds were used, in the manner that<span class='pagenum'><a name="Page_178" id="Page_178">[Pg 178]</a></span> I have
+already described, for the purchase of American goods and to stabilize
+the foreign exchange. These bonds which have had a very wide sale in
+America were brought out at 98 and interest and at the time of issue
+represented an investment that paid nearly 5&frac12; per cent.</p>
+
+<p>These bonds, I might add, are convertible at the option of the holder on
+any date not later than April 15, 1920, or provided that notice is given
+not later than this date, par for par, into 15-25 Year Joint and Several
+4&frac12; per cent bonds of the Governments of the United Kingdom of Great
+Britain and Ireland and the French Republic. Such 4&frac12; per cent bonds,
+payable, principal and interest, in United States gold coin, in New York
+City, and free from deduction for any present or future British or
+French taxes, will mature October 15, 1940, but will be redeemable, at
+par and accrued interest, in whole or in part, on any interest date not
+earlier than October 15, 1930, upon three months' notice.</p>
+
+<p>The equity behind these bonds is the good name, wealth and taxing power
+of the issuing countries. The interest on this loan<span class='pagenum'><a name="Page_179" id="Page_179">[Pg 179]</a></span> equals only
+one-fifth of one per cent of the total estimated income of the British
+people in 1914. It is slightly more than one-third of one per cent of
+the French Republic in 1914.</p>
+
+<p>Between this loan and the next large borrowing by England or France in
+the United States occurred an event of significance to the American
+investor interested in the securities of foreign nations. The
+Anglo-French loan, as you know, was simply the promise to pay of two
+great countries whose Government Bonds at home represented the last word
+in unshakable security.</p>
+
+<p>But when England and France stepped up to our money counters again,
+Uncle Sam put sentiment aside and became a pawn broker. "I think you are
+all right," he said, "but you are in a war that may last a very long
+time and I must have collateral."</p>
+
+<p>To English pride this was a terrific jolt. I happened to be in England
+at the time and I recall the astonishment of no less a distinguished
+individual than the Chancellor of the British Exchequer. It was
+unbelievable that any nation could demand<span class='pagenum'><a name="Page_180" id="Page_180">[Pg 180]</a></span> greater security than the
+good name of the Empire. "If the elder J.P. Morgan were alive this would
+never have happened," said the London bankers. They knew that the
+Grizzled Old Lion of American Finance always held that character was the
+best collateral. In the war emergency, however, many American bankers
+thought to the contrary and the net result was that with all external
+loans thereafter England and France have been forced to dig into their
+strong boxes and do what any individual does when he borrows money&mdash;put
+up a good margin of security.</p>
+
+<p>An illustration of this secured obligation of the British Government is
+the issue of $300,000,000 Five and a Half Per Cent Gold Notes dated
+November 1, 1916. Principal and interest are payable without deduction
+of any English tax in New York and in United States gold coin. The
+holder of these notes, however, has the option to get his money in
+London but at a fixed rate of $4.86 per pound sterling, the normal value
+of the pound in peace time. Since the pound sterling at the time this
+article is<span class='pagenum'><a name="Page_181" id="Page_181">[Pg 181]</a></span> written is quoted at $4.76, this is a decided advantage.</p>
+
+<p>The new English loan is secured by stocks and bonds whose total market
+value is not less than $360,000,000. One group of this collateral
+consists of stocks, bonds and other obligations of American corporations
+and the obligation, either as maker or guarantor, of the Government of
+the Dominion of Canada, the Colony of Newfoundland and Canadian
+Provinces and Municipalities. The second group included obligations of
+Australia, Union of South Africa, New Zealand, Argentina, Chili, Cuba,
+Japan, Egypt, India and a group of English Railway Companies. I
+enumerate this collateral to show the inroads upon British securities
+that increasing war cost is making. This collateral must always show a
+market value margin of twenty per cent above the amount of the loan. It
+means that should there be any slump the English Government must supply
+additional security.</p>
+
+<p>This issue was brought out in two forms. Half of the loan is in Three
+Year Notes due November 1, 1919, which were issued at 99&frac14; and
+interest and yielding over 5.75 per<span class='pagenum'><a name="Page_182" id="Page_182">[Pg 182]</a></span> cent: the other half is in Five
+Year Notes due November 1, 1921, brought out at 98&frac12; and interest and
+yielding about 5.85 per cent. These Notes are redeemable at the option
+of the Government at various interest dates between 1917 and 1920 at
+prices ranging from 101 to 105 and interest.</p>
+
+<p>Having established the precedent of a secured loan, all succeeding
+English issues in this country have been backed up with ample
+collateral. These bonds have a ready market, an important detail that
+the investor must not overlook in purchasing foreign securities.</p>
+
+<p>Now turn to the borrowings of France in the United States. With this
+great nation, whose middle name is Thrift, Uncle Sam was no respecter of
+past performance. For the one separate French external loan he exacted
+his pound of collateral. As a matter of fact it amounted to nearly a
+ton.</p>
+
+<p>I refer to the issue of $100,000,000 Three Year Five Per Cent Gold Notes
+bearing the date of August 1, 1916. To float this loan the American
+Foreign Securities Company was formed which arranged to lend the French
+Government $100,000,000. As se<span class='pagenum'><a name="Page_183" id="Page_183">[Pg 183]</a></span>curity the Company&mdash;it was merely a group
+of American bankers, required France to deposit stocks and bonds having
+a value at prevailing market and exchange rate of $120,000,000. Should
+the value of these securities fall below this sum they must be
+replenished until there is a margin of twenty per cent in excess of the
+principal of the loan.</p>
+
+<p>These securities throw an interesting sidelight upon the resource of the
+French Republic and its ability to borrow desirable collateral from
+patriotic citizens. They include obligations of the Government of
+Argentine, Sweden, Norway, Denmark, Switzerland, Holland, Uruguay,
+Egypt, Brazil, Spain, and Quebec. The most picturesque parcel in the lot
+is $11,000,000 in Suez Canal shares. This stock is one of the corporate
+heirlooms of France and is very closely held. It not only pays a large
+dividend but shares in the profits of the company which in peace times
+are big. The fact that France should put these prize securities in
+"hock" is evidence of her determination to keep her credit absolutely
+above reproach.<span class='pagenum'><a name="Page_184" id="Page_184">[Pg 184]</a></span></p>
+
+<p>The Three Year French Notes were brought out at 98 and interest and at
+the time of issue yielded about 5.73 per cent.</p>
+
+<p>But all direct French borrowing in America has not been on the pound of
+flesh basis. For now we come to what might well be called The Loan of
+Sentiment. It is the $50,000,000 City of Paris Five Year Six Per Cent
+Gold Bond Issue dated October 15, 1916. It gave Americans the
+opportunity to pay a substantial tribute of affectionate gratitude for
+happy hours spent in the Queen City of Europe and have the prospect of a
+desirable dividend at the same time. Here is a piece of foreign
+financing with a distinction and a background all its own. Aside from
+its purely sentimental phase it is perhaps the only loan floated in
+America since the war which is dedicated to construction instead of
+destruction. The proceeds are to be used to reimburse the City of Paris
+for expenditures in building hospitals and making other necessary
+humanitarian improvements and to provide a sinking fund to meet similar
+disbursements. Amid the incessant hate and pas<span class='pagenum'><a name="Page_185" id="Page_185">[Pg 185]</a></span>sion of war it is
+pleasant to find this back water of cooling relief.</p>
+
+<p>Like most of the foreign issues made during the war it follows the
+highly intelligent European practice of putting out loans in small
+denominations so as to be within the reach of the great mass of the
+people. These bonds may be had in multiples of $100 and upward. The
+Government of France has agreed to permit the exportation of sufficient
+gold to permit the payment of principal and interest in the yellow metal
+in New York. The loan&mdash;the only external one of the City of Paris&mdash;was
+brought out at 98&frac34; and interest, which would make an investment of
+6.30 per cent. In addition to this yield as an investment there is the
+possibility of profit in exchange in view of the option to collect
+principal and interest at the rate of 5.50 francs per dollar instead of
+the normal rate of exchange before the war.</p>
+
+<p>This statement of possible exchange profits leads us to one of the
+conspicuous features of the latest National French Loan, which although
+internal in form has been put within the ken of the American investor.<span class='pagenum'><a name="Page_186" id="Page_186">[Pg 186]</a></span></p>
+
+<p>Fully to comprehend it you must know that in ordinary times a dollar in
+American money is worth 5.18 francs. On account of the dislocation in
+foreign exchange the value of a dollar in French money has risen to
+approximately 5.85 francs. Therefore when you buy a French security in
+terms of francs for American dollars you get a great deal more for your
+money than you would have received before the war. Hence the possibility
+of profit when francs return to normal is large.</p>
+
+<p>The National French Loan was sold to American investors at an exchange
+rate of 5.90, which means that every dollar you employ gives you a
+principal of 5.90 francs. On this basis the price for the security
+issued at a par of 100 would be 87&frac12;, which would make the direct
+yield over 5.70 per cent. Should exchange return to normal, the
+subscription price would be equivalent to 75&frac12;, which would make the
+direct yield over 6-5/8 per cent.</p>
+
+<p>Translating this loan into terms of money, you find that for every
+$14.83 you invest you get 100 francs capital: for every $148.30 you get
+1000 francs capital: for<span class='pagenum'><a name="Page_187" id="Page_187">[Pg 187]</a></span> $741.52 you receive 5000 francs capital. If
+French exchange should return to normal and the securities sell at the
+issue price&mdash;87&frac12;&mdash;the investor would receive $16.89 for every 100
+francs of capital: $168.88 for every 1000 francs: $844.39 for every 5000
+francs. On this basis without regard to income return the holder of 5000
+francs capital would receive a profit of $103.94 or over 13.75 per cent
+on his investment.</p>
+
+<p>Should the market price of the issue advance to 100 and exchange return
+to normal the investor would get $19.30 for every 100 francs capital;
+$193.00 for every 1000 francs capital; $965.00 for every 5000 francs
+capital. In this case and again without regard to income return, the
+holder of 5000 francs capital would receive a net profit of $223.50 or
+approximately 30 per cent.</p>
+
+<p>This loan is issued in <i>Rentes</i> and in denominations of 100 francs and
+multiples. <i>Rentes</i> is the form in which all French Government issues
+are brought out at home. The word means interest or income. The French
+always refer to their Government Bonds in terms of interest without any
+men<span class='pagenum'><a name="Page_188" id="Page_188">[Pg 188]</a></span>tion of principal. This is because <i>rentes</i> are supposed to be
+perpetual. The new French loan just explained is not redeemable or
+convertible before 1931.</p>
+
+<p>Usually there is no limit to these National French loans. To be in
+France during the war and see the popular response to the appeal for
+funds is to have a thrilling experience in the practical side of
+patriotism.</p>
+
+<p>I chanced to be in Paris when one of these loans was launched.
+Throughout a day of driving rain thousands of people stood in line at
+the post offices and private institutions waiting for a chance to put
+their money out to work for their country. The French wage worker, be he
+artisan or street cleaner, needed no coaching in the art of employing
+his funds safely and profitably. Just as saving is instinct with him, so
+is the putting of these savings out to work in a Government bond second
+nature. He is the thriftiest and most cautious investor in the world. He
+has established a close and confidential relation with his banker such
+as exists in no other nation. Therefore when the French financier offers
+him Government<span class='pagenum'><a name="Page_189" id="Page_189">[Pg 189]</a></span> Bonds or "Loans of Victory" as the war issues are
+emotionally termed, he does not hesitate. He knows it is all right.</p>
+
+<p>Alluring as is the possibility of profit in the new French Rente at the
+present abnormal exchange basis, it fades before the prospects for
+similar profit that lie in some of the Russian Government Bonds
+available in the United States. The Imperial Russian Internal Five and a
+Half Per Cent Loan of 1916 amounting to 2,000,000,000 roubles will
+illustrate.</p>
+
+<p>Ordinarily the Russian rouble is worth 51.45 cents in American money. It
+has gone down to 32 cents. At this rate of exchange a thousand rouble
+bond bearing interest at 5&frac12; per cent would only cost $320.00. Based
+on the normal value of the rouble this bond would be worth $514.60 or
+$194.60 above the present price of the bond&mdash;an increase of about 60.8
+per cent on the investment. Figuring roubles at the normal rate of
+exchange the yearly yield would be $28.28 or 8.8 per cent on the
+investment.</p>
+
+<p>The fact that roubles are down so low is evidence that Russian credit at
+the moment is not as high as it might be. The principal<span class='pagenum'><a name="Page_190" id="Page_190">[Pg 190]</a></span> equity behind
+this bond, as well as most other Russian securities available in
+America, is the fact that Russia has immense post-war possibilities. She
+will emerge from the conflict like a giant awakened and with the first
+realisation of her enormous undeveloped resources. To offset this,
+however, is the lack of stability of Russian Government as compared with
+the other Allies which makes all Russian Bonds speculative.</p>
+
+<p>On account of the difficulty in shipping bonds and the preponderance of
+pro-Ally sentiment here, there has been a comparatively small market for
+German and Austrian war issues in the United States. Yet, in the face of
+these handicaps, a considerable market has developed. It is due to two
+definite reasons. One is the desire of the native born and transplanted
+Teuton to help his country. Many of them appear at the German banks with
+their savings books eager and ready to make financial sacrifice for the
+Fatherland. The other reason is that the German mark has so greatly
+depreciated (it has gone down from 23.82 cents to 17.65 cents) that
+should it ever come back to anything like normal and the Gov<span class='pagenum'><a name="Page_191" id="Page_191">[Pg 191]</a></span>ernment
+does not repudiate its issues the investment will be very profitable.</p>
+
+<p>Here is the way it works out: in ordinary times a 4000 mark bond which
+would be the equivalent of a $1000 American piece, costs about $960. At
+the present low rate of exchange the same German bond costs $690.00 in
+American money and therefore shows a profit on the exchange basis alone
+of $270.00 or over 28 per cent. Austrian Bonds show even a larger
+profit.</p>
+
+<p>Summarise our war lending and you get a total of all loans to
+belligerent Governments since the outbreak of the war that aggregate
+$1,828,600,000, which is nearly one-third of the whole cost of the Civil
+War. Add to this our loans of $185,000,000 to Canadian Provinces and
+Cities and $8,200,000 to the City of Dublin and to the City of London
+for water works improvements, a grand total of $2,075,800,000 is rolled
+up. Of this sum $156,400,000 in obligations have matured and been paid
+off, which leaves a net debt to us of $1,919,400,000. It divides up as
+follows:</p>
+
+<table border='0' cellspacing='0' cellpadding='0' summary='U.S. loans'>
+  <tr>
+    <td>Great Britain</td>
+    <td>&nbsp;&nbsp;&nbsp;$858,400,000</td>
+  </tr>
+  <tr>
+    <td>France</td>
+    <td align='right'>656,200,000</td>
+  </tr>
+  <tr>
+    <td>Russia</td>
+    <td align='right'>167,200,000</td>
+  </tr>
+  <tr>
+    <td>Italy</td>
+    <td align='right'>25,000,000</td>
+  </tr>
+  <tr>
+    <td>Dominion of Canada</td>
+    <td align='right'>120,000,000</td>
+  </tr>
+  <tr>
+    <td>Canadian Provinces and Municipalities</td>
+    <td align='right'>185,000,000</td>
+  </tr>
+  <tr>
+    <td>Germany</td>
+    <td align='right'>20,000,000</td>
+  </tr>
+
+</table>
+
+<p><span class='pagenum'><a name="Page_192" id="Page_192">[Pg 192]</a></span>Having taken this financial plunge into European financial waters, Uncle
+Sam has got the foreign lending habit and has loaned $117,000,000 to
+Latin-America, mainly to Argentina and Chili: $39,000,000 to neutral
+European nations, including Switzerland, Norway, Greece and Sweden. Not
+desiring to play any race favourites, he has speeded China on her way to
+enlightenment to the extent of $4,000,000.</p>
+
+<p>In buying foreign war bonds&mdash;a procedure which in war time naturally
+involves sentiment&mdash;it is wise for the investor to watch his step.
+Patriotism is all right in its place but unless you can afford to
+contribute money for purely emotional reasons, a cold business estimate
+of the situation is advisable. This applies especially to the man or
+woman with savings who cannot afford to take chances. He or she will
+find it a good<span class='pagenum'><a name="Page_193" id="Page_193">[Pg 193]</a></span> rule to stick to external bonds except under exceptional
+conditions.</p>
+
+<p>One objection to the average internal bond is that with the exception of
+England the native money has greatly depreciated in international value.
+Of course, if all these countries finally get back to their old
+standards of wealth, these investments will yield a very large profit.
+To reap this benefit, however, it will be necessary to hold the
+securities for a considerable period because it will take the warring
+countries a long time to "come back." Another fact in connection with
+internal bonds well worth remembering is that while belligerent
+countries will scrupulously respect their obligations held by a great
+neutral like the United States whose good will and resources will be
+very necessary after the close of hostilities, there is the possibility,
+remote though it may be, that repudiation of home issues may come in the
+shock of readjustment.</p>
+
+<p>In a word, in purchasing a foreign war bond be sure to get a stable
+national name, accumulated wealth, habits of thrift, an ample taxing
+power, and a good conversion basis behind the security.<span class='pagenum'><a name="Page_194" id="Page_194">[Pg 194]</a></span></p>
+
+<p>Amid all our war lending lurks a menace to future and necessary American
+financing. In flush times like these it is comparatively easy for us to
+spare large sums of money, because such capital is available and not
+missed at home. If there was the absolute certainty that all the foreign
+short term loans would be paid on maturity there would be no reason to
+show the red light.</p>
+
+<p>But any man who knows anything about the European financial situation
+also knows that it will be extremely difficult, almost impossible, for
+the fighting nations to meet their obligations within the time
+specified. This does not mean that they will be unable to pay. It does
+mean, however, that the inroads of the war will have been so terrific
+that pressing needs will so continue to pile up that renewals must be
+sought. Thus our money will still be tied up.</p>
+
+<p>What will happen at home? Simply this. American enterprise which will
+need capital for expansion may have to wait. In discussing this matter
+one of the best known American bankers said this to me the other day:</p>
+
+<p>"If America had a benevolent despot I<span class='pagenum'><a name="Page_195" id="Page_195">[Pg 195]</a></span> believe that he ought to set
+aside an arbitrary sum which would represent the limit that we as a
+nation could lend each year to foreign countries."</p>
+
+<p>There is still another hardship in this outward flow of our capital. It
+lies in the fact that the very attractive terms of the war loans have
+made it very difficult for American railroads and corporations to
+finance their needs. They must pay more for their requirements than ever
+before.</p>
+
+<p>Yet this war financing has done more for us than merely provide an
+opportunity for the profitable employment of hundreds of millions of
+dollars. It has brought back home about $1,500,000,000 of our
+securities, mostly in railroad, that were held abroad. This has not only
+meant a considerable cutting down in the sum that we formerly had to
+send to Europe in interest and dividends, but it has helped to make us
+more economically independent. There is still $1,780,000,000 of our
+securities held abroad, and if the war keeps on much longer a great
+portion of it is likely to come back.</p>
+
+<p>There were two good reasons for this liquidation. One was that the
+holder of the<span class='pagenum'><a name="Page_196" id="Page_196">[Pg 196]</a></span> American security in England is subject to a very high
+tax in addition to the normal income tax on large fortunes. Another was
+the necessity for the mobilisation of American securities to become part
+of the collateral offered by the British Government for the loans made
+in this country. In many instances the English owner of American
+securities has simply loaned them to his country as a patriotic act. In
+numerous other cases, however, he has sold them outright and put the
+proceeds into home war issues.</p>
+
+<p>You have seen how our millions have joined that greater stream of
+European billions to meet the rising tide of war cost. How is this vast
+debt to be paid and what is the paying capacity of the nations involved?</p>
+
+<p>In analysing the war debt and its costly hangover for posterity, you
+must remember that not all of it is in actual money. The nations at war
+have not only taxed their economic reserve through the destruction of
+productive capacity in the loss of men and material&mdash;as I have already
+pointed out&mdash;but have made a costly and well-nigh per<span class='pagenum'><a name="Page_197" id="Page_197">[Pg 197]</a></span>manent drain upon
+what might be called their nervous systems.</p>
+
+<p>Look for a moment at the American Civil War whose cost was a mere flea
+bite as compared with the stupendous price of the European
+Conflagration. At the end of that war only half of its reckoning was
+represented in the country's bonded debt. After fifty years we are still
+paying in some way for the other and larger outlay, the invisible strain
+on the country.</p>
+
+<p>Strange as it may seem in the light of the present frightful ravage in
+Europe, no country has ever been completely ravaged by war. When I
+returned from Europe more than a year ago, I was convinced that economic
+exhaustion would be the determining factor: that victory would perch on
+the side of the biggest bank roll. After a second trip to the warring
+lands I am convinced that I was wrong in my first impression.
+Observation again in England and France leads me to believe that man
+power&mdash;beef, not gold&mdash;will win. The extents to which financial credit
+can be extended in the countries at war seem to be almost without limit.</p>
+
+<p>This leads to the final but all essential<span class='pagenum'><a name="Page_198" id="Page_198">[Pg 198]</a></span> detail: How will the European
+nations pay?</p>
+
+<p>Since the Allies practically have a monopoly on the American money sent
+abroad for war purposes, let us briefly look at the equity behind the
+Thing known as National Honour. Its first and foremost bulwark is
+Wealth. Take England first. The wealth of the United Kingdom is
+$90,000,000,000: the annual income of the people $12,000,000,000. To
+this you can add the wealth, resource and income of all her far-flung
+colonies and the immense amount of money due to her from foreign
+countries. Unlike France and save for a few Zeppelin raids, the Empire
+is absolutely free from the ravage of war. The principal assault has
+been upon her income, for her great Principal is still intact.</p>
+
+<p>In examining the methods adopted by England and France to meet the cost
+of the war, you find a sharp difference of procedure which is
+characteristic of the countries. Following the British tradition,
+England is trying to make the war "pay its way" with taxation. Out of a
+total expenditure of $9,500,000,000 for the current year, no less<span class='pagenum'><a name="Page_199" id="Page_199">[Pg 199]</a></span> than
+$2,500,000,000 was raised by taxation. The rest was obtained by loans at
+home and abroad.</p>
+
+<p>The income tax alone will serve to show the enormous increase in
+tribute. From .04 per cent on small incomes to 13 per cent on large ones
+before the war it has risen to 1 per cent on small incomes to over
+41&frac12; per cent on big ones. Again, 60 per cent of all excess profits
+earned since the war are surrendered to the State.</p>
+
+<p>I can give no better evidence of the result of this taxation than to
+repeat what Reginald McKenna, Chancellor of the British Exchequer, said
+to me in London last August:</p>
+
+<p>"The English position is so sound," he declared, "that if the war ended
+at the end of the current financial year, that is, on March the 31st,
+1917, our present scale of taxation would provide not only for the whole
+of our peace expenditures and the interest on the entire National Debt
+but also for a sinking fund calculated to redeem that debt in less than
+forty years. There would still remain a surplus sufficient to allow me<span class='pagenum'><a name="Page_200" id="Page_200">[Pg 200]</a></span>
+to wipe out the excess profit tax and to reduce other taxes
+considerably."</p>
+
+<p>When I asked him to make this more specific, he continued:</p>
+
+<p>"The total revenue for the current year is $2,545,000,000. Our last
+Peace Budget was $1,000,000,000. Assuming that the war would end by next
+March 1st, you must add another $590,000,000 for interest and sinking
+fund on the war debt together with a further $100,000,000 for pensions
+which would make the total yearly expenditure for the first year of
+peace $1,690,000,000. Deducting this from the existing taxation you get
+a surplus of $855,000,000. Thus after withdrawing the $430,000,000
+received from the excess profits tax there still remains a margin of
+$425,000,000."</p>
+
+<p>Indeed, to analyze British war finance to-day is to find something
+besides debits and credits and balances. It is a great moral force that
+does not reckon in terms of pounds or pence. There is no thought of
+indemnity to soothe the scars of waste: no dream of conquest to atone
+for friendly land despoiled.</p>
+
+<p>Money grubbing has gone, if only for the<span class='pagenum'><a name="Page_201" id="Page_201">[Pg 201]</a></span> moment, along with the other
+baser things that have evaporated in the giant melting pot of the war.
+In England to-day there are only two things, Work and Fight. They are
+giving the nation an economic rebirth: a new idea of the dignity of
+toil: they have begot a spirit of denial that is rearing an impregnable
+rampart of resource.</p>
+
+<p>Even more marvellous is the financial devotion of the French who present
+a spectacle of unselfish sacrifice that merely to touch, as alien, is to
+have a thrilling and unforgettable experience.</p>
+
+<p>When you look into the French method of paying for the war you get the
+really picturesque and human interest details. In place of taxation you
+find that the war is being paid, in the main, out of the savings of the
+people. Instead of mortgaging the future, the Gaul is utilising his
+thrifty past.</p>
+
+<p>Never in all history is there a more impressive or inspiring
+demonstration of the value of thrift as a national asset. It has reared
+the bulwark that will enable France to withstand whatever economic
+attack the war will make.</p>
+
+<p>The difference between the English and<span class='pagenum'><a name="Page_202" id="Page_202">[Pg 202]</a></span> French system of war financing
+is psychological as well as material. The average Frenchman has a great
+deal of the peasant in him. He is willing to give his life and his
+honour to the nation but he absolutely draws the line at paying taxes.
+This is why the French have made it a war of loans.</p>
+
+<p>Go up and down the battle line in France and you get startling evidence
+of the French devotion to savings. More than one English officer has
+told me of tearful requests from French peasants for permission to go
+back to their steel-swept and war-torn little farms to dig up the few
+hundreds of francs buried in some corner of field or garden. Equally
+impressive is the sight of farmers&mdash;usually old men and women&mdash;working
+in the fields while shells shriek overhead and the artillery rumbles
+along dusty highways.</p>
+
+<p>Thus the French war debt will be met because of the almost incredible
+saving power of the French people. It is at once their pride and their
+prosperity. When all is said and done, you discover that with nations as
+with individuals it is not what they make but what they save that makes
+them strong and enduring.<span class='pagenum'><a name="Page_203" id="Page_203">[Pg 203]</a></span></p>
+
+<p>One afternoon last summer I talked in Paris with M. Alexandre Ribot, the
+French Minister of Finance: a stately white-bearded figure of a man who
+looked as if he had just stepped out of a Rembrandt etching. He sat in a
+richly tapestried room in the old Louvre Palace where more than one King
+had danced to merry tune. Now this stately apartment was the nerve
+centre of a marvellous and close-knit structure that represented a real
+financial democracy.</p>
+
+<p>"How long can France stand the financial strain of war?" I asked the
+Minister.</p>
+
+<p>Light flashed in his eyes as he replied:</p>
+
+<p>"So long as the French people know how to save, and this means
+indefinitely."</p>
+
+<p>Although the invader has crossed her threshold, France continues to
+save. Every wife in the Republic who is earning her livelihood while her
+husband is at the front (and nearly every man who can carry a gun is
+fighting or in training), is putting something by. It means the building
+up of a future financial reserve against which the nation can draw for
+war or peace.</p>
+
+<p>One rock of French economic solidity lies in her immense gold supply.
+The per capita<span class='pagenum'><a name="Page_204" id="Page_204">[Pg 204]</a></span> amount of gold is $30.02 and is larger than any other
+country in the world. The United States is next with $19.39, after which
+come the United Kingdom with $18.28, and Germany $14.08. Let me add, in
+this connection, that a good deal of the French gold is still in
+stocking and cupboard.</p>
+
+<p>By the end of 1916 the war had cost France $11,000,000,000, which means
+an annual fixed charge of $600,000,000, to which must be added
+$200,000,000 for pensions, making the total fixed burden of
+$800,000,000.</p>
+
+<p>All this cannot be paid out of savings, although in normal times France
+saves exactly $1,000,000,000 a year. But the Government has one big
+trump card up its sleeve. It is the large fortunes of her citizens. They
+have been untouched by the war because practically no income tax has
+been levied.</p>
+
+<p>While the average Frenchman will sacrifice his life rather than submit
+to taxation, the upper and wealthy class will do both. The annual income
+of the people of France is $6,000,000,000. Therefore a 12 per cent tax
+on this income would very nearly pro<span class='pagenum'><a name="Page_205" id="Page_205">[Pg 205]</a></span>duce the entire fixed charge on the
+war debt. France looks into the financial future unafraid.</p>
+
+<p>Financially, Russia ambles along like the Big Bear she typifies. In one
+respect her method of financing the war cost differs distinctly from her
+Allies in the fact that she has received heavy advances from England and
+France. From England alone she borrowed $1,250,000,000 which was
+expended for arms and ammunition and field equipment. The Czar's Empire
+has put out five internal loans while the rest of the money needed has
+been raised out of the sale of short term Treasury Bills, paper money
+issues and tax levies.</p>
+
+<p>Except for the few millions of dollars obtained in the United States,
+Germany's financing&mdash;like her whole conduct of the war&mdash;is
+self-contained. Through five Imperial 5 per cent loans ranging from one
+to three billion dollars each, she has established a war credit of
+$12,500,000,000. This money&mdash;to a smaller degree than in France&mdash;has
+come from the great mass of the German people.</p>
+
+<p>Other sources of revenue that are en<span class='pagenum'><a name="Page_206" id="Page_206">[Pg 206]</a></span>abling the Kaiser to pay for the
+war are Treasury Bills sold at home and a taxation that is moderate
+compared with the colossal pre-war taxation which spelled Germany's
+Preparedness. At the time I write this chapter her war expenditure had
+passed the $14,000,000,000 mark. Tack on to this Germany's peace debt of
+$5,000,000,000 more and you begin to see&mdash;with all the uncertainty of
+the war's duration&mdash;the immense burden that the Fatherland will have to
+carry. The war's drain on the German future is perhaps greater than that
+of any other country because all her war loans are long term. She has
+also loaned nearly $1,000,000,000 to Austria, Turkey and Bulgaria.</p>
+
+<p>The Teutonic war cost has one distinct advantage over all others in that
+it is confined within the German borders. Hence Germany can do as she
+pleases with regard to its settlement. If the Mailed Fist obtains after
+the war she can clamp it down on her loans, wipe them out as she chooses
+and no one can offer a protest.</p>
+
+<p>Now let us dump all these statistics that represent so much blood, agony
+and sacrifice<span class='pagenum'><a name="Page_207" id="Page_207">[Pg 207]</a></span> into the middle of the table and strike a final balance
+sheet.</p>
+
+<p>On one hand you have the assets of the warring countries as represented
+by their national wealth. For the Allies, including Roumania, they show
+a total of $273,000,000,000: for the Central Powers they register
+$134,000,000,000. If wealth is the winning factor then the Allies have
+the advantage in weight of buying metal.</p>
+
+<p>Take the other side of the ledger and you see that up to November 1,
+1916, the four principal allied countries, England, France, Russia and
+Italy, had spent on direct war cost approximately $34,000,000,000, while
+the total Teutonic war expenditures have been $21,000,000,000. To this
+actual war cost must be added the peace debts of the belligerent nations
+which would supplement the allied expense account by $17,465,000,000 and
+that of the enemy nations by $9,808,000,000.</p>
+
+<p>Striking a grand total of liabilities, you find that if the war
+mercifully ends by August 1, 1917 (as Kitchener predicted it might), the
+fighting peoples would face a<span class='pagenum'><a name="Page_208" id="Page_208">[Pg 208]</a></span> debt burden of all kinds that had reached
+$105,773,000,000.</p>
+
+<p>After this colossal scale of expenditures you may well ask: Will it ever
+be possible for European finance to see straight or count normally
+again?</p>
+
+<p>Be that as it may, no one can doubt that the battling nations,
+individually or with the marvellous team-work that kinship in their
+respective causes has begot, are able to pay their way while the
+struggle lasts. Grim To-day will take care of itself under the stress of
+passion born of desire to win. It is the Reckoning of that Uncertain
+To-morrow that will prove to be the problem.</p>
+
+<p>You cannot bankrupt a nation any more than you can ruin an individual so
+long as brains and energy are available. Peace therefore will not find a
+ruined Europe but it will dawn on a group of depleted countries facing
+enormous responsibilities. War ends but the cost of it endures. Just as
+present millions are paying with their lives so will unborn hosts pay
+with the sweat of their brows.</p>
+
+<p>Meanwhile our Financial Stake in the<span class='pagenum'><a name="Page_209" id="Page_209">[Pg 209]</a></span> Great Struggle is secure. How much
+more we will have to put into Europe's Red Pay Envelope remains to be
+seen. In any event, we have learned how to do it.</p>
+
+<hr />
+<p><span class='pagenum'><a name="Page_210" id="Page_210">[Pg 210]</a></span></p>
+<h2><a name="VII_The_Man_Lloyd_George" id="VII_The_Man_Lloyd_George"></a>VII&mdash;<i>The Man Lloyd George</i></h2>
+
+<p>The door opened and almost before I had crossed the threshold the little
+grey-haired man down at the end of the long stately room began to speak.
+Lloyd George was in action.</p>
+
+<p>I had last seen him a year ago in the murk of a London railway station
+when I bade him farewell after a memorable day. With him I had gone to
+Bristol where he had made an impassioned plea for harmony to the Trade
+Union Congress. Then he was Minister of Munitions, Shell-Master of the
+Nation in its critical hour of Ammunition Need.</p>
+
+<p>Now he had succeeded the lamented Kitchener as Minister of War; sat in
+the Seat of Strategy, head of the far-flung khakied hosts that even at
+this moment were breasting death on half a dozen fronts. Just as twelve
+months before he had unflinchingly met the Great Emergency that
+threatened his country's existence, so did he again fill the National
+Breach.<span class='pagenum'><a name="Page_211" id="Page_211">[Pg 211]</a></span></p>
+
+<p>England's Man of Destiny whose long career is one continuous and
+spectacular public performance was on the job.</p>
+
+<p>But it was not the same Lloyd George who had sounded the call for
+Military and Industrial Conscription from the Peaks of Empire. Another
+year of war had etched the travail of its long agony upon his features,
+saddened the eyes that had always beheld the Vision of the Greater
+Things. The little man was fresh from the front and full of all that its
+mighty sacrifice betokened not only to the embattled nations but to the
+world as well.</p>
+
+<p>Though we spoke of Politics, Presidents and the Great Social Forces that
+so far as England was concerned acknowledged him as leader, the current
+of speech always swept back to war and its significance for us.</p>
+
+<p>"Since the war means so much to us," I said, "have you no message for
+America?"</p>
+
+<p>Throughout our talk he had sat in a low chair sometimes tilting it
+backward as he swayed with the vehemency of his words. Suddenly he
+became still. He turned his head and looked dreamily out the window at
+his left where he could see the throng of<span class='pagenum'><a name="Page_212" id="Page_212">[Pg 212]</a></span> Whitehall as it swept back
+and forth along London's Great Military Way.</p>
+
+<p>Then rising slowly and with eloquent gesture and trembling voice (he
+might have been speaking to thousands instead of one person), he said:</p>
+
+<p>"The hope of the world is that America will realise the call that
+Destiny is making to her in tones that are getting louder and more
+insistent as the terrible months go by. That Destiny lies in the
+enforcement of respect for International Law and International Rights."</p>
+
+<p>It was a pregnant and unforgettable moment. From the Throne Room of a
+Mighty Conflict England's War Lord was sounding the note of a distant
+process of peace.</p>
+
+<p>If you had probed behind this kindling utterance you would have seen
+with Lloyd George himself that beyond the flaming battle-lines and past
+the tumult of a World at War was the hope of some far-away Tribunal that
+would judge nations and keep them, just as individuals are kept, in the
+path of Right and Humanity.</p>
+
+<p>But before any such bloodless antidote can be applied to International
+Dispute, to<span class='pagenum'><a name="Page_213" id="Page_213">[Pg 213]</a></span> quote Lloyd George again: "This war must be fought to a
+finish."</p>
+
+<p>These final words, snapped like a whip-lash and emphasised with a
+fist-beat on the table, meant that England would see her Titan Task
+through and if for no other reason because the man who drives the war
+gods wills it so. What sort of man is this who goes from post to post
+with inspired faith and unfailing execution? What are the qualities that
+have lifted him from obscure provincial solicitor to be the Prop of a
+People?</p>
+
+<p>"Let George do it," has become the chronic plea of all Britain in her
+time of trial. How does he do it?</p>
+
+<p>To understand any man you must get at his beginnings. Thus to appreciate
+Lloyd George you must first know that he is Welsh and this means that he
+was cradled in revolt. He must have come into the world crying protest.
+He was reared in a land of frowning crags and lovely dales, of mingled
+snow and sunshine, of poetry and passion. About him love of liberty
+clashed with vested tyranny. These conflicting things shaped his
+character, entered into<span class='pagenum'><a name="Page_214" id="Page_214">[Pg 214]</a></span> his very being and made him temperamentally a
+creature of magnificent ironies.</p>
+
+<p>But this conflict did not end with emotion. All his life Contrast,
+sometimes grotesque but always dramatic, has marked him for its own. You
+behold the Apostle of Peace who once espoused the Boer, translated into
+the flaming Disciple and Maker of War through the Rape of Belgium. You
+see the fiery Radical, jeered and despised by the Aristocracy, become
+the Protector of Peers. No wonder he stands to-day as the most
+picturesque, compelling and challenging figure of the English speaking
+race. Only one other man&mdash;Theodore Roosevelt&mdash;vies with him for this
+many-sided distinction.</p>
+
+<p>The son of a village schoolmaster who died when he was scarcely three:
+the ward of a shoe-maker who was also inspired lay-preacher: the
+political protege of a Militant Nationalist whose heart bled at the
+oppression of the Welsh, Lloyd George early looked out upon a life
+smarting with grievance and clamouring to be free. Knowing this, you can
+understand that the dominant characteristic of this man is to rebel
+against<span class='pagenum'><a name="Page_215" id="Page_215">[Pg 215]</a></span> established order. Swaddled in Democracy, he became its
+Embodiment and its Voice.</p>
+
+<p>The world knows about the Lloyd George childhood spent amidst poverty in
+a Welsh village. The big-eyed boy ate, thought and dreamed in Welsh,
+"the language that meant a daily fare of barley bread." When he learned
+English it was like acquiring a foreign tongue. He grew up amid a great
+revival of Welsh art, letters and religion that stirred his soul. He
+missed the pulpit by a narrow margin, yet he has never lost the
+evangelistic fervour which is one of the secrets of his control and
+command of people.</p>
+
+<p>With the alphabet Lloyd George absorbed the wrongs of his people and
+they were many. The Welsh had a double bondage: the grasp of the
+Landlord and the Thrall of the Church. All about him quivered the
+aspiration for a free land, a free people and a free religion. In those
+days Wales was like another Ireland with all the hardship that Eviction
+imposes.</p>
+
+<p>The call to leadership came early. As a boy in school he led his mates
+in rebellion against the drastic dictates of a Church<span class='pagenum'><a name="Page_216" id="Page_216">[Pg 216]</a></span> which prescribed
+liberty of religious thoughts and speech. He became the Apostle of
+Nonconformity and for it waged some of his fiercest battles.</p>
+
+<p>Always the gift of oratory was his. He preached temperance almost with
+his advent into his teens: he was a convincing speaker before most boys
+talked straight.</p>
+
+<p>In due time Lloyd George became a solicitor but it was merely the step
+into public life. To plead is instinct with him and with advocacy of a
+case in court he was always urging some reform for his little country.
+Politics was meat and drink to him and he stood for Parliament. An
+ardent Home Ruler, he swayed his followers with such intensity that what
+came to be known as Lloyd George's Battle Song sprang into being. Sung
+to the American tune of "Marching Through Georgia" it was hailed as the
+fighting hymn of Welsh Nationalism. Two lines show where the young Welsh
+lawyer stood in his early twenties: they also point his whole future:</p>
+
+<div class="poem"><div class="stanza">
+<div>"The Grand Young Man will triumph,</div>
+<div>Lloyd George will win the day&mdash;&mdash;"</div>
+</div></div>
+
+<p><span class='pagenum'><a name="Page_217" id="Page_217">[Pg 217]</a></span>There is something Lincoln-like in the spectacle of his first struggle.
+This lowly lad fought the forces of "Squirearchy and Hierarchy." The
+Tories hurled at him the anathema that he "had been born in a cottage."</p>
+
+<p>"Ah," replied Lloyd George, when he heard of it: "the Tories have not
+realised that the day of the cottage-bred man has dawned."</p>
+
+<p>Before he got through he was destined to show, that so far as
+opportunity was concerned, the Cottage in Great Britain was to be on a
+par with a Palace.</p>
+
+<p>As you analyse Lloyd George's life you find that he has always been a
+sort of Human Lightning Rod that attracted the bolts of abuse. A
+campaign meant violent controversy, frequently physical conflict. The
+reason was that he always stated his cause so violently as to arouse
+bitter resentment.</p>
+
+<p>Into his first election he flung himself with the fury of youth and the
+eager passion of a zealot. He threw conventional Liberalism to the wind
+and made a fight for a Free and United Wales. He frankly believed
+himself to be the inspired leader of<span class='pagenum'><a name="Page_218" id="Page_218">[Pg 218]</a></span> his people: often his meetings
+became riots. More than once he was warned that the Tories would kill
+him and on several occasions he narrowly escaped death. Once while
+riding with his wife in an open carriage through the streets of Bangor
+he was assailed by a hooting, jeering mob. Some one threw a blazing fire
+ball, dipped in paraffine, into the vehicle. It knocked off the
+candidate's hat and fell into Mrs. Lloyd George's lap setting her afire.
+Lloyd George threw off his coat, smothered the flames and after finding
+that the innocent victim of the assault was uninjured, calmly proceeded
+to the Town Hall where he spoke, accompanied by a fusillade of stones
+which smashed every window in the structure.</p>
+
+<p>In this campaign, as in all succeeding ones, Lloyd George used the full
+powers of press publicity. He made reporters his confidants. Often he
+rehearsed his speeches before them, striding up and down and declaiming
+as passionately as if he were facing huge audiences. In fact he acquired
+an interest in a group of Welsh papers.</p>
+
+<p>Already Welsh chieftainship was being crystallised in the aggressive
+little fire-eater.<span class='pagenum'><a name="Page_219" id="Page_219">[Pg 219]</a></span> Anticipating the coming call of the Mother Country
+she was laying her burdens on his stalwart shoulders. And what George
+was now doing for Wales he was soon to do in the larger arena of the
+Empire.</p>
+
+<p>Once in Parliament Lloyd George was no man's man. He became a free lance
+and while sometimes he ran amuck his cause was always the cause of his
+people.</p>
+
+<p>In those earlier Parliamentary days you find some of the traits that
+distinguished him later on. For one thing he disdained the drudgery of
+committee work: he chafed at the confinement of the conference room;
+eagle-like he yearned to spread his wings. His forte was talking. He
+loathed to mull over dull and unresponsive reports. He frankly admitted
+a disinclination to work, and it makes him one of the most superficial
+of men in what the world calls culture. His intelligence has more than
+once been characterised as "brilliant but hasty."</p>
+
+<p>But offsetting all this is the man's persuasive and pleading personality
+which always gets him over the shallow ground of ignorance. This is one
+reason why Lloyd George has always been stronger in attack than in<span class='pagenum'><a name="Page_220" id="Page_220">[Pg 220]</a></span>
+defence. His tactic has always been either to assault first or make a
+swift counterdrive. He is a sort of Stonewall Jackson of Debate.</p>
+
+<p>Then, as throughout his whole career, he showed an extraordinary
+aversion to letter-writing. He became known in Parliament as the "Great
+Unanswered." He used to say, and still does, that an unanswered letter
+answers itself in time. This led to the tradition that the only way to
+get a written reply out of Lloyd George was to enclose two addressed and
+stamped cards, one bearing the word "Yes" and the other "No." More than
+once, however, when friends and constituents tried this ruse they got
+both cards back in the same envelope!</p>
+
+<p>Not long ago a well known Englishman wanted to make a written request of
+Lloyd George and on consulting one of his associates was given this
+instruction: "Make it brief. Lloyd George never reads a letter that
+fills more than half a page."</p>
+
+<p>There is no need of rehearsing here the long-drawn struggle through
+which he made his way to party leadership. In Parliament and out, he was
+a hornet&mdash;a good thing to let alone, and an ugly customer to stir up.<span class='pagenum'><a name="Page_221" id="Page_221">[Pg 221]</a></span>
+Whether he lined up with the Government or Opposition it mattered
+little. Lloyd George has always been an insurgent at heart.</p>
+
+<p>The crowded Nineties were now nearing their end, carrying England and
+Lloyd George on to fateful hour. Ministries rose and fell: Roseberry and
+Harcourt had their day: Chamberlain climbed to power: Asquith rose over
+the horizon. The long smouldering South African volcano burst into
+eruption. It meant a great deal to many people in England but to no man
+quite so much as to Lloyd George.</p>
+
+<p>Now comes the first of the many amazing freaks that Fate played with
+him. The Institution of War which in later years was to make him the
+very Rock of Empire was now, for a time at least, to be his undoing.</p>
+
+<p>Before the conflict with the Boers Lloyd George was a militant
+pacifist&mdash;a sort of peacemaker with a punch. When England invaded the
+Transvaal Lloyd George began a battle for peace that made him for the
+first time a force in Imperial affairs. He believed himself to be the
+Anointed Foe of the War and he dedicated himself and all his powers to
+stem what seemed to be a hopeless tide.<span class='pagenum'><a name="Page_222" id="Page_222">[Pg 222]</a></span></p>
+
+<p>It was a courageous thing to do for he not only risked his reputation
+but his career. Up and down the Empire he pleaded. He was in some
+respects the brilliant Bryan of the period but with the difference that
+he was crucifying himself and not his cause upon the Cross of Peace. He
+became the target of bitter attack: no epithet was too vile to hurl upon
+him. Often he carried his life in his hands as the episode of the
+Birmingham riot shows. In all his storm tossed life nothing approached
+this in daring or danger.</p>
+
+<p>Lloyd George was invited to speak in the Citadel of Imperialism which
+was likewise the home of Joseph Chamberlain, Arch-Apostle of the Boer
+War. Save for the staunchest Liberals the whole town rose in protest.
+For weeks the local press seethed and raged denouncing Lloyd George as
+"arch-traitor" and "self-confessed enemy." He was warned that he would
+imperil his life if he even showed himself. He sent back this word: "I
+am announced to speak and speak I will."</p>
+
+<p>He reached Birmingham ahead of schedule time and got to the home of his
+host in<span class='pagenum'><a name="Page_223" id="Page_223">[Pg 223]</a></span> safety. All day long sandwich men paraded the highways bearing
+placards calling upon the citizenry to assemble at the Town Hall where
+Lloyd George was to speak "To defend the King, the Government and Mr.
+Chamberlain."</p>
+
+<p>Night came, the streets were howling mobs, every constable was on duty.
+The hall was stormed and when Lloyd George appeared on the platform he
+faced turmoil. Hundreds of men carried sticks, clubs and bricks covered
+with rags and fastened to barbed wire. When he rose to speak Bedlam let
+loose. Jeers, catcalls and frightful epithets rained on him and with
+them rocks and vegetables. He removed his overcoat and stood calm and
+smiling. When he raised his voice, however, the grand assault was made.
+Only a double cordon of constables massed around the stage kept him from
+being overwhelmed. In the free-for-all fight that followed one man was
+killed and many injured.</p>
+
+<p>Anything like a speech was hopeless: the main task was to save the
+speaker's life, for outside in the streets a bloodthirsty rabble waited
+for its prey. Lloyd George started<span class='pagenum'><a name="Page_224" id="Page_224">[Pg 224]</a></span> to face them single-handed and it
+was only when he was told that such procedure would not only foolishly
+endanger his life but the lives of his party which included several
+women, he consented to escape through a side door, wearing a policeman's
+helmet and coat.</p>
+
+<p>Fourteen years later Lloyd George returned to Birmingham acclaimed as a
+Saviour of Empire. Such have been the contrasts in this career of
+careers.</p>
+
+<p>Fortunately England, like the rest of the world, forgets. The mists of
+unpopularity that hung about the little Welshman vanished under the
+sheer brilliancy of the man. When the Conservative Government fell after
+the Boer War he was not only a Cabinet possibility but a necessity. The
+Government had to have him. From that time on they needed him in their
+business.</p>
+
+<p>Lloyd George drew the dullest and dustiest of all portfolios&mdash;the Board
+of Trade. He found the post lifeless and academic; he vivified and
+galvanised it and made it a vital branch of party life and dispute. It
+is the Lloyd George way.</p>
+
+<p>Here you find the first big evidence of one<span class='pagenum'><a name="Page_225" id="Page_225">[Pg 225]</a></span> of the great Lloyd George
+qualities that has stood him in such good stead these recent turbulent
+years. He became, like Henry Clay, the Great Conciliator. The whole
+widespread labour and industrial fabric of Great Britain was geared up
+to his desk. It shook with unrest and was studded with strife. Much of
+this clash subsided when Lloyd George came into office because he had
+the peculiar knack of bringing groups of contending interests together.
+Men learned then, as they found out later, that when they went into
+conference with Lloyd George they might as well leave their convictions
+outside the door with their hats and umbrellas.</p>
+
+<p>To this policy of readjustment he also brought the laurel of
+constructive legislation. To him England owes the famous Patents Bill
+which gives English labour a share in the English manufacture of all
+foreign invention; the Merchant Shipping Bill which safeguards the
+interest of English sailor and shipper; and the Port of London Bill
+which made the British metropolis immune from foreign ship menace.</p>
+
+<p>England was fast learning to lean on the<span class='pagenum'><a name="Page_226" id="Page_226">[Pg 226]</a></span> grey-eyed Welshman. He came to
+be known as the "Government Mascot": he was continually pulling his
+party's chestnuts out of the fire of failure or folly. George had begun
+to "do it" and in a big way.</p>
+
+<p>Likewise the whole country was beginning to feel pride in his
+performance as the following story, which has been adapted to various
+other celebrities, will attest:</p>
+
+<p>Lloyd George sat one day in the compartment of a train that was held up
+at the station at Cardiff. A porter carrying a traveller's luggage
+noticed him and called his client's attention, saying:</p>
+
+<p>"There is Lloyd George himself in that train."</p>
+
+<p>The traveller seemed indifferent and again the porter called attention
+to the budding great man. After persistent efforts to rouse his
+interest, the tourist, much nettled, said tartly:</p>
+
+<p>"Suppose it is. He's not God Almighty."</p>
+
+<p>"Ah," replied the porter, "remember he's young yet."</p>
+
+<p>When Lloyd George became Chancellor of the Exchequer under Asquith no
+one was surprised. It is typical of the man that he<span class='pagenum'><a name="Page_227" id="Page_227">[Pg 227]</a></span> should have leaped
+from the lowest to the highest place but one in the Cabinet.</p>
+
+<p>As Chancellor he had at last the opportunity to fulfill his democratic
+destiny. Whatever Lloyd George may be, one thing is certain: he is
+essentially a man of the masses. With his famous People's Budget he
+legislated sympathy into the law. It meant the whole kindling social
+programme of Old Age pensions, Health and Unemployment insurance,
+increased income tax and an enlarged death duty. As most people know, it
+put much of the burden of English taxation on the pocketbooks of the
+people who could best afford to pay. The Duke-baiting began.</p>
+
+<p>Just as he had fought for a Free Wales so did he now struggle for a Free
+Land. All his amazing picturesqueness of expression came into play. He
+contended that Monopoly had made land so valuable in Britain that it
+almost sold by the grain, like radium. In commenting on the heavy taxes
+levied by the land autocrats upon commercial enterprise in London he
+made his famous phrase:</p>
+
+<p>"This is not business. It is blackmail!"</p>
+
+<p>To democracy the Budget meant economic<span class='pagenum'><a name="Page_228" id="Page_228">[Pg 228]</a></span> emancipation: the banishment of
+hunger from the hearth: the solace of an old age free from want. It made
+Lloyd George "The Little Brother of the Poor." To the Aristocracy it was
+the gauge of battle for the bitterest class war ever waged in England:
+violation of ancient privilege.</p>
+
+<p>The fight for this programme made Lloyd George the best known and most
+detested man in England. To hate him was one of the accomplishments of
+titled folk to whom his very name was a hissing and a by-word. Massed
+behind him were the common people whose champion he was: arrayed against
+him were the powers of wealth and rank.</p>
+
+<p>In this campaign Lloyd George used the three great weapons that he has
+always brought to bear. First and foremost was the force of his
+personality, for he swept England with a tidal wave of impassioned
+eloquence. Second, he unloosed as never before the reservoirs of ink,
+for he used every device of newspaper and pamphlet to drive home his
+message. He even printed his creed in Gaelic, Welsh and Erse. Third, he
+employed his kinship with the people to the fullest extent. The Commoner
+won. As<span class='pagenum'><a name="Page_229" id="Page_229">[Pg 229]</a></span> the great structure of social reform rose under his dynamic
+powers so did the influence of the House of Lords crumble like an
+Edifice of Cards. Democracy in England meant something at last!</p>
+
+<p>The tumult and the shouting died, the smoke cleared, and Lloyd George
+stood revealed as England's Strong Man, a sort of Atlas upholding the
+World of Public Life and much of its responsibilities.</p>
+
+<p>Now for the first time he was caught up in the fabric of the Crimson Net
+that a few years later was to haul nearly all Europe into war. In 1911
+Germany made a hostile demonstration in Morocco. Although England had no
+territorial interests there, it was important for many reasons to warn
+the Kaiser that she would oppose his policy with armed force if
+necessary. A strong voice was needed to sound this note. Lloyd George
+did it.</p>
+
+<p>Hence it came about that the Chancellor of the Exchequer stood in the
+Mansion House on a certain momentous day and hurled the defi at the War
+Lord. It called the Teuton bluff for a while at least. In the light of
+later events this speech became historic. Not only did Lloyd George
+declare<span class='pagenum'><a name="Page_230" id="Page_230">[Pg 230]</a></span> that "national honour is no party question," but he affirmed
+that "the peace of the world is much more likely to be secured if all
+the nations realise fairly what the conditions of peace must be."</p>
+
+<p>Persistent pacifist propagandists to-day may well take warning from that
+utterance. He still believes it.</p>
+
+<p>The spark that flashed at Agadir now burst into flame. The Great War
+broke and half the world saw red. What Lloyd George believed impossible
+now became bitter and wrathful reality. Though he did not know it at the
+moment, the supreme opportunity of his life lay on the lap of the god of
+Battles.</p>
+
+<p>The Lloyd George who sat in council in Downing Street was no dreaming
+pacifist. He who had tried to stop the irresistible flood of the Boer
+War now rode the full swell of the storm that threatened for the moment
+to engulf all Britain.</p>
+
+<p>As Chancellor of the Exchequer he was called upon to shape the fiscal
+policies that would be the determining factor in the War of Wars. "The
+last &pound;100,000,000 will win," he said. Only one other man in
+England<span class='pagenum'><a name="Page_231" id="Page_231">[Pg 231]</a></span>&mdash;Lord Kitchener&mdash;approached him in immense responsibility of
+office in the confidence of the people. It was a proud but equally
+terrifying moment.</p>
+
+<p>Then indeed the little Welshman became England's Handy Man. As custodian
+of the British Pocketbook he had a full-sized job. But that was only
+part of the larger demand now made on his service. Popular faith
+regarded him as the Nation's First Aid, infallible remedy for every
+crisis.</p>
+
+<p>If a compromise with Labor or Capital had to be effected it was Lloyd
+George who sat at the head of the table: if an Ally needed counsel or
+inspiration it was the Chancellor who sped across the water and laid
+down the law at Paris or Petrograd: if the Cause of Empire clamoured for
+expression from Government Seat or animated rostrum, he stood forth as
+the Herald of Freedom. So it went all through those dark closing months
+of 1914 as reverse after reverse shook the British arms and brought home
+the realisation that the war would be long and costly.</p>
+
+<p>The year 1915 dawned full of gloom for England but pointing a fresh star
+for the career of Lloyd George. Although the first<span class='pagenum'><a name="Page_232" id="Page_232">[Pg 232]</a></span> wave of Kitchener's
+new army had dashed against the German lines in France and established
+another tradition for British valour, the air of England became charged
+with an ominous feeling that something was wrong at the front. The
+German advance in the west had been well nigh triumphant. Reckless
+bravery alone could not prevail against the avalanche of Teutonic steel.</p>
+
+<p>All the while the imperturbable Kitchener sat at his desk in the War
+Office&mdash;another man of Blood and Iron. He ran the war as he thought it
+should be run despite the criticism that began to beat about his head.
+To the average Englander he was a king who could do no wrong. But the
+conduct of war had changed mightily since Kitchener last led his troops.
+Like Business it had become a new Science, fought with new weapons and
+demanding an elastic intelligence that kept pace with the swift march of
+military events. The Germans were using every invention that marvellous
+efficiency and preparedness could devise. They met ancient England
+shrapnel with modern deadly and devastating high-explosives. If the war
+was<span class='pagenum'><a name="Page_233" id="Page_233">[Pg 233]</a></span> to be won this condition had to be changed&mdash;and at once.</p>
+
+<p>Two men in England&mdash;Lloyd George and Lord Northcliffe&mdash;understood this
+situation. Fortunately they are both men of courageous mould and
+unwavering purpose. One day Northcliffe sent the military expert of the
+<i>Times</i> (which he owns) to France to investigate conditions. He found
+that the greatest need of the English Army was for high-explosives. They
+were as necessary as bread. Into less than a quarter of a column he
+compressed this news. Instead of submitting it to the Censor who would
+have denied it publication, Northcliffe published the despatch and with
+it the revelation of Kitchener's long and serious omission. He not only
+risked suspension and possible suppression of his newspapers, but also
+hazarded his life because a great wave of indignation arose over what
+seemed to be an unwarranted attack upon an idol of the people. But it
+was the truth nevertheless.</p>
+
+<p>At a time when England was supposed to be sensation-proof this
+revelation fell like a forty-two centimetre shell. It was an amaz<span class='pagenum'><a name="Page_234" id="Page_234">[Pg 234]</a></span>ing
+and dramatic demonstration of the power of the press and it created a
+sensation.</p>
+
+<p>Shell shortage at the front had full mate in a varied deficiency at
+home. Ammunition contracts had been let to private firms at excessive
+prices: labour was restricting output and breaking into periodic
+dissension: drink was deadening energy: in short, all the forces that
+should have worked together for the Imperial good were pulling apart.</p>
+
+<p>Northcliffe began a silent but aggressive crusade for reform in his
+newspapers, while Lloyd George let loose the powers of his tongue. A
+national crisis, literally precipitated by these two men, arose. The
+Liberal Government fell and out of its wreck emerged the Coalition
+Cabinet. This welding of one-time enemies to meet grave emergency did
+more than wipe out party lines in an hour that threatened the Empire's
+very existence.</p>
+
+<p>The reorganised Cabinet knew&mdash;as all England knew&mdash;that the greatest
+requirement was not only men but munitions. A galvanic personality was
+necessary to organise and direct the force that could save the day. A
+new Cabinet post&mdash;the Ministry of<span class='pagenum'><a name="Page_235" id="Page_235">[Pg 235]</a></span> Munitions&mdash;was created. Who could
+fill it was the question. There was neither doubt nor uncertainty about
+the answer. It was embodied in one man.</p>
+
+<p>The little Welshman became Minister of Munitions.</p>
+
+<p>Lloyd George had led many a forlorn hope by taking up the task that
+weaker hands had laid down. Here, however, was a situation without
+precedent in a life that was a rebuke to convention. To succeed to an
+organised and going post these perilous war times was in itself a
+difficult job. In the case of the Ministry of Munitions there was
+nothing to succeed. Lloyd George had been given a blank order: it was up
+to him to fill it. He had to create a whole branch of Government from
+the ground up. All his powers of tact and persuasion were called into
+play. For one thing he had to fit the old established Ordnance
+Department rooted in tradition and jealous of its prerogatives into the
+new scheme of things.</p>
+
+<p>Lloyd George was no business man, but he knew how business affairs
+should be conducted. He knew, too, that America had reared the empire of
+business on close knit<span class='pagenum'><a name="Page_236" id="Page_236">[Pg 236]</a></span> and efficient organisation. He did what Andrew
+Carnegie or any other captain of capital would do. He called together
+the Schwabs, the Edisons, the Garys and the Westinghouses of the Kingdom
+and made them his work fellows.</p>
+
+<p>From every corner of the Empire he drafted brains and experience. He
+wanted workers without stint, so he started a Bureau of Labor Supply: he
+needed publicity, so he set up an Advertising Department: to compete
+with the Germans he realised that he would need every inventive resource
+that England could command, so he founded an Invention and Research
+Bureau: he saw the disorganisation attending the output of shells in
+private establishments, so he planted the Union Jack in nearly every
+mill and took over the control of British Industry: he found labour at
+its old trick of impeding progress, so with a Munitions Act he
+practically conscripted the men of forge and mill into an industrial
+army that was almost under martial law. He cut red tape and injected red
+blood into the Department that meant national preservation. In brief,
+Lloyd<span class='pagenum'><a name="Page_237" id="Page_237">[Pg 237]</a></span> George was on the job and things were happening.</p>
+
+<p>The Minister established himself in an old mansion in Whitehall Garden
+where belles and beaux had danced the stately minuet. It became a dynamo
+of energy whose wires radiated everywhere. "More Munitions" was the
+creed that flew from the masthead.</p>
+
+<p>A typical thing happened. The working force of the Ministry grew by
+leaps and bounds: already the hundreds of clerks were jam up against the
+confining walls of the old grey building. Lloyd George sent for one of
+his lieutenants and said:</p>
+
+<p>"We must have more room."</p>
+
+<p>"We have already reported that fact and the War Office says it will take
+three months to build new office space," was the reply.</p>
+
+<p>"Then put up tents," snapped the little man, "and we will work under
+canvas."</p>
+
+<p>Realising that his principal weapons were machines, Lloyd George took a
+census of all the machinery in the United Kingdom and got every pound of
+productive capacity down on paper. He was not long in finding out why
+the ammunition output was shy. Only a fifth of the lathes and tools used
+for Gov<span class='pagenum'><a name="Page_238" id="Page_238">[Pg 238]</a></span>ernment work ran at night. "These machines must work every hour
+of the twenty-four," he said. Before a fortnight had passed every
+munitions mill ground incessantly.</p>
+
+<p>These machines needed adequate manning. Lloyd George thereupon created
+the plan that enlisted the new army of Munitions Volunteers. Nelson-like
+he issued the thrilling proclamation that England expected every machine
+to do its duty. It meant the end of restricted output.</p>
+
+<p>With the ban off restriction he likewise clamped the lid down on drink.
+Munitions workers could only go to the public houses within certain
+hours: the man who brought liquor into a Government controlled plant
+faced fines and if the offence was repeated, a still more drastic
+punishment.</p>
+
+<p>Lloyd George began a censorship of labour which disclosed the fact that
+many skilled workers were wasting time on unskilled tasks. Lloyd George
+now began to dilute the skilled forces with unskilled who included
+thousands of women.</p>
+
+<p>Right here came the first battle. Labour rebelled. It could find a way
+to get liquor<span class='pagenum'><a name="Page_239" id="Page_239">[Pg 239]</a></span> but it resented dilution and cried out against capacity
+output. The Shell Master again became the Conciliator. He curbed the
+wild horses, agreeing to a restoration of pre-war shop conditions as
+soon as peace came. All he knew was the fact that the guns hungered and
+that it was up to him to feed them.</p>
+
+<p>The wheels were not whirring fast enough to suit Lloyd George. "We must
+build our own factories," he said. Almost over night rose the mills
+whose slogan was "English shells for English guns." In speeding up the
+English output the Welshman was also equipping England to meet coming
+needs, laying the first stone of the structure that is fast becoming an
+Empire Self-Contained.</p>
+
+<p>Lloyd George realised that he could not run every munitions plant,
+whereupon he organised local Boards of Control in the great ordnance
+centres like Woolwich, Sheffield, Newcastle and Middleboro. Each became
+a separate industrial principality but all bound up by hooks of steel to
+the Little Wizard who sat enthroned at Whitehall.</p>
+
+<p>England became a vast arsenal, throbbing with ceaseless activity. The
+smoke that trailed from the myriad stacks was the ban<span class='pagenum'><a name="Page_240" id="Page_240">[Pg 240]</a></span>ner of a new and
+triumphant faith in the future.</p>
+
+<p>What was the result? Up and down the western battle front English cannon
+spoke in terms of victory. No longer was British gunner required to
+husband shells: to meet crash with silence. He hurled back steel for
+steel and all because England's Hope had answered England's Call. Lloyd
+George had done it again.</p>
+
+<p>I first met Lloyd George during those crowded days when he was
+Commander-in-Chief of the host that fed the firing line. Under his
+magnetic direction British industry had been forged into a colossal
+munitions shop. No man in England was busier: not even the King was more
+inaccessible. Life with him was one engagement after another.</p>
+
+<p>Now came one of those swift emergencies that seems to crowd so fast upon
+Lloyd George's life and with it arose my own opportunity.</p>
+
+<p>The British Trade Union Congress in annual session at Bristol had
+expressed Labour's dissatisfaction over its share of the munitions
+profits. Lloyd George had sent them a letter explaining his proposed
+excess<span class='pagenum'><a name="Page_241" id="Page_241">[Pg 241]</a></span> profit tax, but this apparently was not enough. The delegates
+still growled.</p>
+
+<p>"Then I'll go down and speak to them in person," said the Minister with
+characteristic energy.</p>
+
+<p>Thus it happened that I journeyed with him to the old town, background
+of stirring naval history. On the way down half a dozen department heads
+poured into his responsive ears the up-to-the-minute details of the work
+in hand. He became a Human Sponge soaking up the waters of fact.</p>
+
+<p>At Bristol in a crowded stuffy hall he faced what was at the start
+almost a menacing crowd. Yet as he addressed them you would have thought
+that he had known every man and woman in the assembly all their lives.
+The easy, intimate, frank manner of his delivery: his immediate claim to
+kinship with them on the ground of a common lowly birth: his quick and
+stirring appeal to their patriotism swept aside all discord and
+disaffection. As he gave an eloquent account of his stewardship you
+could see the audience plastic under his spell. The people who had
+assembled to heckle sat spellbound. When he had finished they not only
+gave him an<span class='pagenum'><a name="Page_242" id="Page_242">[Pg 242]</a></span> ovation but pledged themselves anew to the gospel of "More
+Munitions."</p>
+
+<p>It was on the train back to London that I got a glimpse of the real
+Lloyd George. What Roosevelt would have called "a bully day" had left
+its impress upon the little man. His long grey hair hung matted over a
+wilted collar: there was a wistful sort of weariness in his eyes. He
+sank into a big chair and looked for a long time in silence at the
+flying landscape. Then suddenly he aroused himself and began to talk.
+Like many men of his type whom you go to interview he began by
+interviewing the interviewer.</p>
+
+<p>The first two questions that Lloyd George asked me showed what was going
+on in his mind, for they were:</p>
+
+<p>"What were Lincoln's views of conscription, and did your soldiers vote
+during the Civil War?"</p>
+
+<p>There was definite method in these queries, for already the Shadow of
+Conscription had begun to fall over all England. It was Lloyd George,
+aided by Northcliffe, who led the fight for it.</p>
+
+<p>The talk always went back to the great<span class='pagenum'><a name="Page_243" id="Page_243">[Pg 243]</a></span> war. When I spoke of his speech
+at Bristol his face kindled and he said:</p>
+
+<p>"Have you stopped to realise that this war is not so much a war of human
+mass against human mass as it is a war of machine against machine? It is
+a duel between the English and German workman."</p>
+
+<p>You cannot talk long with Lloyd George without touching on democracy.
+This is his chosen ground. I shall never forget the fervour with which
+he said:</p>
+
+<p>"The European struggle is a struggle for world liberty. It will mean in
+the end a victory for all democracy in its fight for equality."</p>
+
+<p>When I asked him to write an inscription for a friend of mine and
+express the hope that lay closest to his heart, he took a card from his
+pocket, gazed for a moment at the rushing country now shot through with
+the first evening lights, and then wrote: "Let Freedom win."</p>
+
+<p>A few days later Lloyd George made still another appearance in his now
+familiar r&ocirc;le of England's Deliverer. The South Wales coal miners,
+2,000,000 in number, went on strike at a time when Coal meant Life to
+the<span class='pagenum'><a name="Page_244" id="Page_244">[Pg 244]</a></span> Empire. There is no need of asking the name of the man who went to
+calm this storm. Only one was eligible and he lost no time.</p>
+
+<p>Lloyd George did not call a conference at Cardiff: he went straight to
+Wales and spoke to the workers at the mouth of the pit. What arbitration
+and conciliation had failed to do, his hypnotic oratory achieved. The
+men went back to the mines with a cheer.</p>
+
+<p>A week later at the London Opera House he made a notable speech to the
+Conference of Representatives of the Miners of Great Britain. To have
+heard that speech was to get a liberal education in the art of
+phraseology and to carry always in memory the magic of the man's voice.
+In this speech he said:</p>
+
+<blockquote><p>"In war and peace King Coal is the paramount industry. Every pit is
+a trench: every workshop a rampart: every yard that can turn out
+munitions of war is a fortress.... Coal is the most terrible of
+enemies and the most potent of friends.... When you see the seas
+clear and the British flag flying with impunity from realm to realm
+and from shore to shore&mdash;when you find the German<span class='pagenum'><a name="Page_245" id="Page_245">[Pg 245]</a></span> flag banished
+from the face of the ocean, who had done it? The British miner
+helping the British sailor."</p></blockquote>
+
+<p>Small wonder that after this effort the miners of Wales should acclaim
+their gallant countryman as Industrial Messiah.</p>
+
+<p>You would think that by this time England had made her final tax on the
+resource of her Ready Man. But she had not. There came the desolate day
+when the news flashed over England that the "Hampshire" had gone down
+and with it Kitchener. Following the shock of this blow, greater than
+any that German arms could deliver, arose the faltering question, "Who
+is there to take his place?"</p>
+
+<p>It did not falter long. Once more the S.O.S. call of a Nation in
+Distress flashed out and again the spark found its man. Lloyd George
+went from Ministry of Munitions to sit in Kitchener's seat at the War
+Office. Unlike the Hero of Khartoum, he had no service in the field to
+his credit. But he knew men and he also knew how to deploy them. Just as
+he brought the Veterans of Business to sit around the Munitions Board,<span class='pagenum'><a name="Page_246" id="Page_246">[Pg 246]</a></span>
+so did he now marshal war-tried campaigners for the Strategy Table. The
+Somme blow was struck: the new War Chieftain proved his worth.</p>
+
+<p>In the midst of all these new exactions Lloyd George found time for
+other and arduous national labours. Two more episodes will serve to
+close this narrative of unprecedented achievement.</p>
+
+<p>When the recent Irish Revolt had registered its tragedy of blood, death
+and execution, menacing the very structure of Empire, Lloyd George
+became the Emissary of Peace to the Isle of Unrest.</p>
+
+<p>Again, when prying peacemakers sought to intrude themselves upon the
+nations engaged in a life and death struggle, it was Lloyd George, in a
+remarkable interview, who warned all would-be winners of the Nobel prize
+that peace talk was unfriendly, that "there was neither clock nor
+calendar in the British Army," that the Allies would make it a finish
+fight.</p>
+
+<p>So it went until gloom once more took up its abode amid the Allies.
+Bucharest fell before the German assault: Greece seethed with the
+unhappy mess that Entente diplo<span class='pagenum'><a name="Page_247" id="Page_247">[Pg 247]</a></span>macy had made of a great opportunity:
+land and sea registered daily some fresh evidence of Teutonic advance.
+What was wrong?</p>
+
+<p>England speculated, yet one man knew and that man was Lloyd George. He
+realised the futility of a many-headed direction of the war: with his
+swift insight he saw the tragic toll that all this cross purpose was
+taking. He made a demand on Asquith for a small War Council that would
+put dash, vigour and success into the British side of the conflict. The
+Premier refused to assent and Lloyd George resigned as War Chief. The
+Government toppled in a crisis that menaced the very future of the
+nation.</p>
+
+<p>Great Britain stood aghast. Lloyd George stood for all the popular
+confidence in victory that the nation felt. For a moment it appeared as
+if the very foundations of authority had crumbled.</p>
+
+<p>But not for long. When Bonar Law declined to reestablish the Government
+the oft-repeated cry for action that had invariably found its answer in
+the intrepid little Welshman, again rose up. Upon him devolved the task
+of constructing a new Cabinet which he headed as Prime Minister. He now
+reached<span class='pagenum'><a name="Page_248" id="Page_248">[Pg 248]</a></span> the inevitable goal toward which he had unconsciously marched
+ever since that faraway day when his voice was first heard in
+Parliament.</p>
+
+<p>Even with Cabinet-making Lloyd George was a Revolutionist. He cut down
+the membership from twenty-four to five, establishing a compact and
+effective War Council whose sole task is to "win the war." He centred
+more authority in the Premiership than the English system has ever known
+before. He virtually became Dictator.</p>
+
+<p>On the other hand, he raised the number of Ministers outside the Cabinet
+from nineteen to twenty-eight. He scattered the coterie of lawyers who
+had so long comprised the Government Trust and put in men with red blood
+and proved achievement&mdash;in the main, self-made like himself. He
+installed a trained and competent business man of the type of Sir Albert
+Stanley, raised in the hard school of American transportation, as
+President of the Board of Trade: he drafted a seasoned commercial
+veteran like Lord Rhondda (D. A. Thomas), for President of the Local
+Government Board: he raised his old and experienced aide, Dr.
+Christopher<span class='pagenum'><a name="Page_249" id="Page_249">[Pg 249]</a></span> Addison, to be Minister of Munitions: he made Lord Derby,
+who had conducted the great recruiting campaign, Minister of War: he put
+Sir Joseph Maclay, an extensive ship owner, into the post of Shipping
+Controller. Everywhere he supplanted politicians with doers.</p>
+
+<p>What was equally important he continued his r&ocirc;le of Conciliator, for he
+placated Labour by giving it a large representation and he took a
+definite step toward the solution of the Irish problem by making Sir
+Edward Carson First Lord of the Admiralty.</p>
+
+<p>Even as he stood at what seemed the very pinnacle of his power Destiny
+once more marked him for its own. He had scarcely announced his Cabinet
+when the world was electrified by the news of the German peace proposal.
+By his own action Lloyd George had placed himself at the head of the
+Council charged with the conduct of the war. To the Wizard Welshman
+therefore was put squarely the responsibility of continuing or ending
+the stupendous struggle.</p>
+
+<p>Never before in the history of any country was such momentous
+responsibility concentrated in an individual. The dramatic<span class='pagenum'><a name="Page_250" id="Page_250">[Pg 250]</a></span> element with
+which Lloyd George had become synonymous, found an amazing expression.
+He was ill in bed when the German suggestion was made. No official
+announcement of England's position in reply could be made until he had
+recovered. In the interim the whole world trembled with suspense while
+stock markets shivered. The Premier's name was on every tongue: the eyes
+of the universe were focussed on him. It was indeed his Great Hour.</p>
+
+<p>In what was the most significant speech of his career, and with all the
+force and fervour at his command, he stated the Empire's determination
+to fulfill its obligations to the trampled and ravaged countries. On
+that speech hung the stability of international financial credit, the
+lives of millions of men and the whole future security of Europe.</p>
+
+<p>You have seen the moving picture of a tumultuous life: what of the
+personality behind it?</p>
+
+<p>Reducing the Prime Minister to a formula you find that he is fifty per
+cent Roosevelt in the virility and forcefulness of his character,
+fifteen per cent Bryan in the purely demagogic phase of his makeup,
+while<span class='pagenum'><a name="Page_251" id="Page_251">[Pg 251]</a></span> the rest is canny Celt opportunism. It makes a dazzling and
+well-nigh irresistible composite.</p>
+
+<p>It is with Roosevelt that the best and happiest comparison can be made.
+Indeed I know of no more convincing interpretation of the Thing that is
+Lloyd George than to point this live parallel. For Lloyd George is the
+British Roosevelt&mdash;the Imperial Rough Rider. Instead of using the Big
+Stick, he employs the Big Voice. No two leaders ever had so much in
+common.</p>
+
+<p>Each is more of an institution than a mere man: each dramatises himself
+in everything he does: each has the same genius for the benevolent
+assimilation of idea and fact. They are both persistent but brilliant
+"crammers." Trust Lloyd George to know all about the man who comes to
+see him whether he be statesman, author, explorer or plain captain of
+industry. It is one of the reasons why he maintains his amazing
+political hold.</p>
+
+<p>Lloyd George has Roosevelt's striking gift of phrase-making, although he
+does not share the American's love of letter writing. As I have already
+intimated, whatever may be his future, Lloyd George will never be<span class='pagenum'><a name="Page_252" id="Page_252">[Pg 252]</a></span>
+confronted by accusing epistle. None exists.</p>
+
+<p>Like Roosevelt, Lloyd George is past master in the art of effective
+publicity. He has a monopoly on the British front page. Each of these
+remarkable men projects the fire and magnetism of his dynamic
+personality. Curiously enough, each one has been the terror of the
+Corporate Evil-doer&mdash;the conspicuous target of Big Business in his
+respective country. Each one is a dictator in the making, and it is safe
+to assume that if Lloyd George lived in a republic, like Roosevelt he
+would say: "My Army," "My Navy" and "My Policies."</p>
+
+<p>Roosevelt, however, has one distinct advantage over his British
+colleague in that he is a deeper student and has a wider learning.</p>
+
+<p>In one God-given gift Lloyd George not only surpasses Roosevelt but
+every other man I have ever met. It is an inspired oratory that is at
+once the wonder and the admiration of all who hear it. He is in many
+respects the greatest speaker of his day&mdash;the one man of his race whose
+utterance immediately becomes world property. The stage lost a great
+star when the Welsh David went into politics. There are those who say
+that<span class='pagenum'><a name="Page_253" id="Page_253">[Pg 253]</a></span> he acts all the time, but that is a matter of opinion dictated by
+partisan or self-interest.</p>
+
+<p>Lloyd George is what we in America, and especially those of us born in
+the South, call the "silver-tongued." His whole style of delivery is
+emotional and greatly resembles the technique of the
+Breckenridge-Watterson School. In his voice is the soft melodious lilt
+of the Welsh that greatly adds to the attractiveness of his speech.</p>
+
+<p>Before the public he is always even-tempered and amiable, serene and
+smiling, quick to capitalize interruption and drive home the chance
+remark. He invariably establishes friendly relations with his hearers,
+and he has the extraordinary ability to make every man and woman in the
+audience before him believe that he is getting a direct and personal
+message.</p>
+
+<p>Lloyd George can be the unfettered poet or the lion unleashed. Shut your
+eyes as you listen and you can almost hear the music of mountain streams
+or the roar of rushing cataracts. In his great moments his eloquence is
+little short of enthralling, for it is filled with an inspired imagery.
+No living man surpasses him in splendour of oratorical<span class='pagenum'><a name="Page_254" id="Page_254">[Pg 254]</a></span> expression. His
+speeches form a literature all their own.</p>
+
+<p>When, for example, yielding to that persistent Call of Empire for his
+service he interpreted England's cause in the war at Queen's Hall in
+London, in September, 1914, in what was in many respects his noblest
+speech, he said in referring to Belgium and Servia:</p>
+
+<p>"God has chosen little nations as the vessels by which He carries His
+choicest wines to the lips of humanity, to rejoice their hearts, to
+exalt their vision, to stimulate and strengthen their faith; and if we
+had stood by when two little nations were being crushed and broken by
+the brutal hands of barbarism, our shame would have rung down the
+everlasting ages."</p>
+
+<p>In closing this speech which he gave the characteristic Lloyd George
+title of "Through Terror to Triumph," he uttered a peroration full of
+meaning and significance to United States in its present hour of pride
+and prosperity. He said:</p>
+
+<blockquote><p>"We have been living in a sheltered valley for generations. We have
+been too com<span class='pagenum'><a name="Page_255" id="Page_255">[Pg 255]</a></span>fortable and too indulgent, many, perhaps, too
+selfish, and the stern hand of fate has scourged us to an elevation
+where we can see the everlasting things that matter for a
+nation&mdash;the great peaks we had forgotten, of Honour, Duty,
+Patriotism, and, clad in glittering white, the towering pinacle of
+Sacrifice pointing like a rugged finger to Heaven.</p>
+
+<p>"We shall descend into the valleys again; but as long as the men
+and women of this generation last, they will carry in their hearts
+the image of those mighty peaks whose foundations are not shaken,
+though Europe rock and sway in the convulsions of a great war."</p></blockquote>
+
+<p>Now take a closing look at the man himself. You see a stocky, well-knit
+figure, broad of shoulder and deep of chest. The animated body is
+surmounted by a face that alternately beams and gleams. There are
+strength and sensitiveness, good humour, courage and resolution in these
+features. His eyes are large and luminous, aglow at times with the
+poetry of the Celt: aflame<span class='pagenum'><a name="Page_256" id="Page_256">[Pg 256]</a></span> again with the fervour of mighty purpose. He
+moves swiftly. To have him pass you by is to get a breath of life.</p>
+
+<p>To all this strength and power he brings undeniable charm. In action he
+is like a man exalted: in repose he becomes tender, dreamy, almost
+childlike. His whole nature seems to be driven by a vast and volcanic
+energy. This is why, like Roosevelt, he has been able to crowd the
+achievements of half a dozen careers into one. He is indeed the Happy
+Warrior.</p>
+
+<p>Yet Lloyd George knows how to play. I have known him to work incessantly
+all day and follow the Ministerial game far into the night. Ten o'clock
+the next morning would find him on the golf links at Walton Heath fresh
+and full of vim and energy. At fifty-three he is at the very zenith of
+his strength.</p>
+
+<p>Why has he succeeded? Simply because he was born to leadership. Without
+being profound he is profoundly moving: without studying life he is an
+unerring judge of men and moods. Volatile, masterful and above all human
+he is at once the most consistent and inconsistent of men.</p>
+
+<p>But it is a new Lloyd George who stepped<span class='pagenum'><a name="Page_257" id="Page_257">[Pg 257]</a></span> from unofficial to official
+stewardship of England: a Lloyd George with the firebrand out of his
+being, purged of bitter revolt, chastened and mellowed by the years of
+war ordeal. Out of contact with mighty sacrifice has come a kinship with
+the spirit. He is to-day like a man transformed. "England hath need of
+him."</p>
+
+<p>There are those who see in the new Lloyd George a Conservative in
+evolution. But whatever the political product of this change may be, it
+represents the equipment necessary to meet the shock of peace. For peace
+will demand a leadership no less vigorous than war.</p>
+
+<p>The lowly lad who dreamed of power amid the Welsh Hills is to-day the
+Hope of Empire.</p>
+
+<hr />
+<p><span class='pagenum'><a name="Page_258" id="Page_258">[Pg 258]</a></span></p>
+<h2><a name="VIII_From_Pedlar_to_Premier" id="VIII_From_Pedlar_to_Premier"></a>VIII&mdash;<i>From Pedlar to Premier</i></h2>
+
+<p>The great General who once said that war is the graveyard of reputations
+might have added that in its fiery furnace great careers are welded. Out
+of the Franco-Prussian conflict emerged the Master Figure of Bismarck:
+the Soudan brought forth Kitchener and South Africa Lord Roberts. The
+Great Struggle now rending Europe has given Joffre to French history and
+up to the time of this writing it has presented to the British Empire no
+more striking nor unexpected character than William Morris Hughes, the
+battling Prime Minister of Australia&mdash;the Unknown who waked up England.</p>
+
+<p>Even to America where the dramatisation of the Self-made Idea has become
+a commonplace thing the story of his rise from pedlar to premier has a
+meaning all its own. Elsewhere in this book you have seen how he stirred
+Great Britain to the post-war commercial menace of the German. It is
+peculiarly fitting therefore that this narrative,<span class='pagenum'><a name="Page_259" id="Page_259">[Pg 259]</a></span> dedicated as it is to
+the War after the War, should close with some attempt at interpretation
+of the personality of the man who sounded its first trumpet call.</p>
+
+<p>Like Lloyd George, Hughes is a Welshman. These two remarkable men, who
+have done so much to rouse their people, have more than racial kinship
+in common. They are both undersized: both rose from the humble hearth:
+both made their way to eminence by way of the bar: both gripped popular
+imagination as real leaders of democracy. They are to-day the two
+principal imperial human assets.</p>
+
+<p>Hughes will tell you that he was born frail and has remained so ever
+since. This son of a carpenter was a weak, thin, delicate boy, but
+always a fighter. At school in London he was the only Nonconformist
+around, and the biggest fellows invariably picked upon him. He could
+strike back with his fists and protect his narrow chest, but his legs
+were so thin that he had to stuff exercise books in his stockings to
+safeguard his shins.</p>
+
+<p>Hughes was trained for teaching, and only the restlessness of the Celt
+saved him from a life term in the schoolroom. At sixteen he<span class='pagenum'><a name="Page_260" id="Page_260">[Pg 260]</a></span> had become
+a pupil instructor. But the sea always stirred his imagination. He would
+wander down to the East India Docks and watch the ships load with
+cargoes for spicy climes. One day as he watched the great freighters a
+boy joined him. He looked very sad, and when Hughes asked him the reason
+he said he wanted to go home to visit his people, but lacked the money.</p>
+
+<p>"I'll lend you some," said Hughes impulsively.</p>
+
+<p>He went home and out of the lining of an ancient concertina he produced
+thirty shillings, all the money he had in the world. He handed this
+hoard over to his new-found friend and promptly forgot all about it. He
+kept on teaching.</p>
+
+<p>I cite this little episode because it was the turning point in a great
+man's career. The boy who borrowed the shillings went to Australia.
+Several years later he returned the money and with it this message:
+"This is a great country full of opportunity for a young man. Chuck your
+teaching and come out here." Hughes went.</p>
+
+<p>Three months later&mdash;it was in 1884&mdash;and with half a crown in his pocket
+he walked<span class='pagenum'><a name="Page_261" id="Page_261">[Pg 261]</a></span> ashore at Brisbane. He looked so frail that the husky dock
+labourers jeered at his physical weakness. Yet less than ten years from
+that date he was their militant leader marching on to the Rulership of
+all Australia.</p>
+
+<p>In those days Australia was a rough land. Beef, bullying and brawn were
+the things that counted most in that paradise of ticket-of-leave men.
+Hughes bucked the sternest game in the world and with it began a series
+of adventures that read like a romance and give a stirring background to
+the man's extraordinary public achievements.</p>
+
+<p>Hughes found out at once that all hope of earning a livelihood by
+teaching in the bush was out of the question. His money was gone: he had
+to exist, so he took the first job that came his way. A band of
+timber-cutters about to go for a month's sojourn in the woods needed a
+cook, so Hughes became their potslinger. Frail as he was, he seemed to
+thrive on hardship. In succession he became sheep shearer, railway
+labourer, boundary rider, stock runner, scrub-cleaner, coastal sailor,
+dishwasher in a bush hotel, itinerant umbrella-mender and sheep drover.</p>
+
+<p>With a small band he once brought fifty<span class='pagenum'><a name="Page_262" id="Page_262">[Pg 262]</a></span> thousand sheep down from
+Queensland into New South Wales. For fifteen weeks he was on the tramp,
+sleeping at night under the stars, trudging the dusty roads all day. At
+the end of this trip occurred the incident that made him deaf. Over
+night he passed from the sun-baked plains to a high mountain altitude.
+Wet with perspiration, he slept out with his flocks and caught cold. The
+result was an infirmity which is only one of many physical handicaps
+that this amazing little man has had to overcome throughout his
+tempestuous life.</p>
+
+<p>Yet he has fought them all down. As he once humorously said: "If I had
+had a constitution I should have been dead long ago."</p>
+
+<p>After all his strenuous bushwhacking the year 1890 found him running a
+small shop in the suburbs of Sydney. By day he sold books and
+newspapers: at night he repaired locks and clocks in order to get enough
+money to buy law books. Into his shop drifted sailors from the wharves
+with their grievances. Born with a passionate love of freedom, these
+sounds of revolt were as music to his ears. Figuratively he sat at the
+feet of Henry George, whose "Progress and<span class='pagenum'><a name="Page_263" id="Page_263">[Pg 263]</a></span> Poverty" helped to shape the
+course of his thinking. Lincoln's letters and speeches were among his
+favourites, too.</p>
+
+<p>One night a big dock bruiser grabbed a package of tobacco off the
+counter, but before he could move a step Hughes had caught him under the
+jaw with his fist. His burly associates cheered the game little
+shopkeeper. They now came to him with their troubles and he was soon
+their friend, philosopher and guide.</p>
+
+<p>For years the synonym for Australian Labour was strike. When the unions
+were merged into a national body Hughes was the unanimous choice of the
+husky stevedores for leader. He became the Great Restrainer. Never was
+influence of lip and brain over muscle and temper better demonstrated.
+The wild men of the wharves&mdash;the roughest crowd in all labour&mdash;were
+under his spell. This nimble-footed shopkeeper flouted them with his
+wit: ruled with his mind.</p>
+
+<p>On a certain occasion five hundred of them were crowded into a building
+at Sydney yelling bloody murder and clamouring for violence. Suddenly
+the tiny figure of Hughes appeared on the platform before them. At<span class='pagenum'><a name="Page_264" id="Page_264">[Pg 264]</a></span>
+first they yelled him down, but he stood smiling, resolute, undaunted.
+He began to talk: the tumult subsided: he stepped forward, stamped his
+foot and said in a voice that reached to every corner:</p>
+
+<p>"You shall not strike." And they did not. David had defied the Goliaths.</p>
+
+<p>From that time on Hughes was the Brains of Australian Labour. He
+organised his industrial rough riders into a powerful and constructive
+union. With it he drove a wedge into the New South Wales Legislature and
+gave industry, for the first time, a seat in its Councils. He became its
+Parliamentary Voice. He was only thirty.</p>
+
+<p>Having got his foot in the doorway of public life, he now jammed the
+portal wide open. As trade union official he forged ahead. He became the
+Father Confessor of the Worker. His advice always was: "Avoid violence:
+put your faith in the ballot box." With this creed he tamed the Labour
+Jungle: through it he built up an industrial legislative group that
+acknowledged him as chief.</p>
+
+<p>Though he was rising to fame the struggle for existence was hard. No
+matter how<span class='pagenum'><a name="Page_265" id="Page_265">[Pg 265]</a></span> late he toiled in legislative hall or union assembly, he
+read law when he got home. He was admitted to the bar, and despite his
+deafness he became an able advocate. When he had to appear in court he
+used a special apparatus with wire attachments that ran to the witness
+box and the bench and enabled him to hear everything that was going on.</p>
+
+<p>He became a journalist and contributed a weekly article to the Sydney
+<i>Telegraph</i>. An amusing thing happened. He noticed that remarkable
+statements began to creep into his articles when published. When he
+complained to the editor he discovered that the linotype operator who
+set up his almost indecipherable copy injected his own ideas when he
+could not make out the stuff.</p>
+
+<p>The limitation of a State Legislature irked Hughes. He beheld the vision
+of an Australian Commonwealth that would federate all those Overseas
+States. When the far-away dominions had been welded under his eloquent
+appeal into a close-knit Union, the fragile, deaf little man emerged as
+Attorney General. At last he had elbow room.</p>
+
+<p>It was due to his efforts that Australia got National Service, an
+Officers' School, ammu<span class='pagenum'><a name="Page_266" id="Page_266">[Pg 266]</a></span>nition factories, military training for
+schoolboys. They were all part of the kindling campaign that he waged to
+the stirring slogan of "Defence, not Defiance."</p>
+
+<p>Always the friend and champion of Labour, he was in the thick of
+incessant controversy. His enemies feared him: his friends adored him.
+He got a variety of names that ranged all the way from "Bush
+Robespierre" to the "Australian Abraham Lincoln."</p>
+
+<p>The Great War found Hughes the Strong Man of Australia, soon to be bound
+up in the larger Destiny of the Empire.</p>
+
+<p>Even before the Mother Country sent her call for help to the Children
+beyond the seas, Hughes had offered the gallant contingent that made
+history at the Dardanelles. Thanks to him, they were prepared. It was
+Hughes who sped the Anzacs on to Gallipoli: it was Hughes who, on his
+own responsibility, offered fifty thousand men more. These men were not
+in sight at the moment, but the intrepid statesman went forth that very
+day and started the crusade that rallied them at once.</p>
+
+<p>Hughes was moving fast, but faster<span class='pagenum'><a name="Page_267" id="Page_267">[Pg 267]</a></span> moved the relentless course of the
+war. Gallipoli's splendid failure had been recorded, the Australians
+stood shoulder to shoulder with their British brothers in the French
+trenches when the opportunity which was to make him a world citizen
+knocked at his door.</p>
+
+<p>In October, 1915, Andrew Fisher resigned the Premiership of Australia to
+become High Commissioner in London, and Hughes was named as his
+successor. The puny lad who had landed at Brisbane thirty years before
+with half a crown in his pocket sat enthroned. The reins of power were
+his and he lost no time in lashing them.</p>
+
+<p>How he divorced the German from Australian trade: how he broke the
+Teutonic monopoly of the Antipodean metal fields and established the
+Australian Metal Exchange and made of it an Imperial institution for
+Imperial revenue only: how he swept England with a torrent of fervid
+oratory rousing the whole nation to its post-war commercial
+responsibilities, are all part of very recent history already woven into
+the fabric of this little volume.</p>
+
+<p>"Reconstruct or decay" was his admoni<span class='pagenum'><a name="Page_268" id="Page_268">[Pg 268]</a></span>tion. Reluctantly the great mass
+of English people saw him leave their shores last summer. Already the
+demand for his recall as unofficial Speeder-up of Patriotism is
+simmering.</p>
+
+<p>What of the man behind this drama of almost unparalleled performance?</p>
+
+<p>To see Hughes in action is to get the impression of a human dynamo
+suddenly let loose. His face is keen and sharp: his mouth thin: his
+cheeks are shrunken: his arms and legs are long and he has a curious way
+of stuffing his clenched fists into his trousers pockets. Some one has
+called him the Mirabeau of the Australian Proletariat. Certainly he
+looks it. He has a nervous energy almost beyond belief. By birth,
+temperament, experience and point of view he is a firebrand, but with
+this difference: he is a Human Flame that reasons.</p>
+
+<p>Only Lloyd George surpasses him in force and fervour of eloquence. He
+has a marvellous trick of expression that never fails to make a winning
+appeal. His speeches are the Bible of the Australian worker, and they
+are fast becoming part of the Gospel of the<span class='pagenum'><a name="Page_269" id="Page_269">[Pg 269]</a></span> wide-awake and progressive
+British wage-earner.</p>
+
+<p>Since he was the first Statesman of the Empire to appreciate the grave
+business responsibilities that will come with peace, it is interesting
+to get his ideas on the relation between Trade and Government. In one of
+his impassioned speeches in England he declared:</p>
+
+<p>"The relations between modern trade interests and national welfare are
+so intimate and complex that they cannot be treated as though they were
+not parts of one organic whole. No sane person now suggests that the
+foreign policy of the country should be dealt with by the
+<i>laissez-faire</i> policy. No one would dare openly to contend that the
+national policy should be one of 'drift,' although I admit that there
+are many most excellent persons who by their attitude seem to resent any
+attempt to steer the ship of State along a definite course as being an
+impious attempt to usurp the functions of Providence, whose special
+business they conceive this to be.</p>
+
+<p>"I want to make one thing quite clear, that what I am advocating is not
+merely a change<span class='pagenum'><a name="Page_270" id="Page_270">[Pg 270]</a></span> of fiscal policy, not merely or even necessarily what
+is called Tariff Reform&mdash;although this may, probably will, incidentally
+follow&mdash;but a fundamental change in our ideas of government as applied
+to economic and national matters. The fact is that the whole concept of
+modern statesmanship needs revision. But England has been, and is, the
+chief of sinners. Quite apart from the idea of a self-contained Empire
+there is the idea of Britain as an organized nation. And the British
+Empire as an organized Empire, organised for trade, for industry, for
+economic justice, for national defence, for the preservation of the
+world's peace, for the protection of the weak against the strong. That
+is a noble ideal. It ought to be&mdash;it must be&mdash;ours."</p>
+
+<p>An extract from another notable address will reveal his gift of words.
+Commenting on the frightful price in human life and treasure that the
+Empire was paying, he said:</p>
+
+<p>"Let us take this solemn lesson to heart. Let us, resolutely putting
+aside all considerations of party, class, and doctrine, without delay,
+proceed to devise a policy for the<span class='pagenum'><a name="Page_271" id="Page_271">[Pg 271]</a></span> British Empire, a policy which shall
+cover every phase of our national, economic, and social life; which
+shall develop our tremendous resources, and yet be compatible with those
+ideals of liberty and justice for which our ancestors fought and died,
+and for which the men of our race now, in this, the greatest of all
+wars, are fighting and dying in a fashion worthy of their breeding.</p>
+
+<p>"Let us set sail upon a definite course as becomes a mighty nation to
+whom has been entrusted the destiny of one-fourth of the whole human
+race."</p>
+
+<p>Hughes is the most accessible of men. The humblest wharf-rustler in
+Australia hails him by his first name. A characteristic incident will
+show the comradeship that exists between this leader and his
+constituency.</p>
+
+<p>On his last visit to England he crossed over to France to visit the
+Australian troops at the front. He was walking through a trench
+accompanied by General Birdwood, who is Commander-in-Chief of the
+overseas contingent, and stopped to chat with a group of soldiers who
+had fought at Gallipoli. Suddenly a shell shrieked overhead. A Tommy
+from Sydney yelled to the Premier:<span class='pagenum'><a name="Page_272" id="Page_272">[Pg 272]</a></span></p>
+
+<p>"Duck, Billy, duck!"</p>
+
+<p>Here is practical democracy. Nowhere, in all the varied human side of
+the war, does it find more impressive embodiment than in the self-made
+little Australian whose life is a miracle of progress.</p>
+
+<p>Of such stuff as this are the Builders of the British To-morrow!</p>
+
+<p class='tbrk'>&nbsp;</p>
+
+<h4>THE END</h4>
+
+
+
+
+
+
+
+
+<pre>
+
+
+
+
+
+End of Project Gutenberg's The War After the War, by Isaac Frederick Marcosson
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+</body>
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+Project Gutenberg's The War After the War, by Isaac Frederick Marcosson
+
+This eBook is for the use of anyone anywhere at no cost and with
+almost no restrictions whatsoever.  You may copy it, give it away or
+re-use it under the terms of the Project Gutenberg License included
+with this eBook or online at www.gutenberg.org
+
+
+Title: The War After the War
+
+Author: Isaac Frederick Marcosson
+
+Release Date: May 12, 2006 [EBook #18380]
+
+Language: English
+
+Character set encoding: ASCII
+
+*** START OF THIS PROJECT GUTENBERG EBOOK THE WAR AFTER THE WAR ***
+
+
+
+
+Produced by Irma Spehar, Martin Pettit and the Online
+Distributed Proofreading Team at http://www.pgdp.net (This
+file was produced from images generously made available
+by The Internet Archive/Canadian Libraries)
+
+
+
+
+
+
+THE WAR AFTER THE WAR
+
+[Illustration: Photograph - (signed) Let freedom win - D Lloyd George]
+
+
+                    THE WAR
+                 AFTER THE WAR
+
+                      BY
+
+               ISAAC F. MARCOSSON
+
+ CO-AUTHOR OF "CHARLES FROHMAN, MANAGER AND MAN"
+ AUTHOR OF "THE AUTOBIOGRAPHY OF A CLOWN," ETC.
+
+          NEW YORK: JOHN LANE COMPANY
+       LONDON: JOHN LANE, THE BODLEY HEAD
+       TORONTO: S. B. GUNDY : : : MCMXVII
+
+
+
+COPYRIGHT, 1916, BY THE CURTIS PUBLISHING COMPANY
+     COPYRIGHT, 1916, BY THE RIDGWAY COMPANY
+
+                Copyright, 1917,
+              BY JOHN LANE COMPANY
+
+
+                   Press of
+          J. J. Little & Ives Company
+                New York, U.S.A.
+
+
+
+                      TO
+               LORD NORTHCLIFFE
+           IN GRATEFUL APPRECIATION
+
+
+
+
+
+_FOREWORD_
+
+
+For nearly three years Europe has been drenched with blood and rent with
+bitter strife. Millions of men have been killed or maimed: billions of
+dollars in property have gone up in smoke and ruin--all part of the
+mighty sacrifice laid on the Altar of the Great War.
+
+This tragic tumult must inevitably subside. The smoke of battle will
+clear: the scarred fields will mantle again with springtime verdure: the
+fighting hosts will once more find their way to peaceful pursuit. Time
+the Healer will wipe out the wounds of war.
+
+The world already wearies of the Crimson Canvas splashed with martial
+scene. Heroism has become the most commonplace of qualities: it takes a
+monster thrill to move a civilisation sick of destruction. With eager
+eye it looks forward to the era of regeneration. War ends some time.
+
+Business never ceases. Under the shock of mighty upheaval it has been
+dislocated by the most drastic strain ever put upon the economic
+fabric. But it will march on long after Peace will have mercifully
+sheathed the Sword. Therefore the permanent world problem is the
+Business problem.
+
+This is why I made two trips to Europe: why I submit this little book in
+the hope that it may point the way to some realisation of the immense
+responsibilities which will inevitably crowd upon the world and more
+especially upon the United States.
+
+Peace will be as great a shock as War. Hence the need of Preparedness to
+meet the inevitable conflict for Universal Trade. We--as a nation--are
+as unready for this emergency as we are to meet the clash of actual
+physical combat. Commercial Preparedness is as vital to the national
+well being as the Training for Arms.
+
+Nor will Commerce be the only thing that we will have to reckon with.
+When you have heard the guns roar and watched horizons flame with fury
+and seen men go to their death smiling and unafraid; when the pitiless
+panorama of carnage has passed before you in terms of terror and
+tragedy, you realise that there is something human as well as economic
+in the relentless Thing called War.
+
+It means that just as there was no compromise with dishonour in the
+approach to the Super-Struggle for which nations are pouring out their
+youth and fortune, so will there be no flinching in that coming contest
+for commercial mastery--the bloodless aftermath of History's deadliest
+and costliest war.
+
+We have reached a place in the World Trade Sun. Unless we are ready to
+hold it we will slip into the Shadow.
+
+We must prepare.
+
+                                                     I. F. M.
+
+
+
+
+_CONTENTS_
+
+
+
+CHAPTER                            PAGE
+
+   I.  THE COMING WAR                15
+
+  II.  ENGLAND AWAKE                 40
+
+ III.  AMERICAN BUSINESS IN FRANCE   71
+
+  IV.  THE NEW FRANCE                98
+
+   V.  SAVING FOR VICTORY           120
+
+  VI.  THE PRICE OF GLORY           164
+
+ VII.  THE MAN LLOYD GEORGE         210
+
+VIII.  FROM PEDLAR TO PREMIER       258
+
+
+THE WAR AFTER THE WAR
+
+
+
+
+I--_The Coming War_
+
+
+While the guns roar from the North Sea to the Mediterranean, and the
+greatest armed host that history has ever known is still locked in a
+life-and-death struggle on a dozen fronts, another war, more potent and
+permanent perhaps than the one which now engulfs Europe, lurks beyond
+the distant horizon of peace.
+
+Its fighting line will be the boundaries of all human needs; its dynamic
+purpose a heroic rehabilitation after stupendous loss. It will be the
+far-flung struggle for the rich prize of International Trade, waiting at
+the end of the Crimson Lane that sooner or later will have a turning.
+
+Embattled commercial groups will supplant embroiled nations; boycotts,
+discriminations and exclusions will succeed the strategies of line and
+trench; the animosities fought out to-day with shell and steel will have
+their heritage in ruthless rivalries.
+
+How shall we fare in this tumult of tariff and treaty? Where shall we
+stand when the curtain of fire fades before a task of regeneration that
+will spell economic rebirth or disaster for millions? Will fiscal
+punishment be meted out to neutral and foe alike? Will reason rule or
+revenge dictate a costly reprisal in this war after the war?
+
+These are the questions that rise out of the dust and din of the
+colossal upheaval which is rending half of the world. Directly or
+indirectly they touch the whole American people, regardless of rank or
+wealth. The tide of war has rolled us far upon the shores of world
+affairs. We have prospered in the kinship of the nations. Will the ebb
+of peace leave us high and dry amid a mighty isolation?
+
+I went to England and France to study this problem at first hand. I
+interviewed Cabinet Ministers; I talked with lawmakers, soldiers,
+captains of capital, masters of industry, and plain, everyday business
+men. Often the talk was disturbed by shriek of shell or bomb of midnight
+Zeppelin marauder.
+
+Through all the travail of debt and death that rends the allied peoples
+runs the clear current of determination to retrieve the immense loss.
+War is waste; some one must pay--we among the rest. Already the guns are
+being trained for the inevitable commercial battle, which, willingly or
+unwillingly, will bring us under fire. Let us examine the plan of
+campaign.
+
+But before going into the concrete details that mean so much to our
+future and our fortune, it is important to understand some very
+essential conditions.
+
+First and foremost is the uncertainty of the war itself. All
+prophecy--at best a dangerous thing--is purest speculation. No one can
+tell how long the duel will last; how badly the loser will be beaten;
+what the terms of peace will be. Yet out of these contingencies will
+emerge the strong hands that will redraw the trade map of the world.
+Whatever the outcome, the countries now fighting, especially the Allies,
+have definitely stated the principles that must govern--for a long time,
+at least--the whole realignment of commercial relations. Their way shall
+be the universal way.
+
+In the second place, be you Ally or Teuton and regardless of how you may
+feel about the ethics of the Great Struggle, it must be remembered that
+behind the glamour as to whether it is waged to conserve human liberty,
+maintain the integrity of "scraps of paper" or to safeguard democracy,
+the larger fact remains that it is a war rooted in commercial jealousies
+and fanned by commercial aggressions.
+
+Now we come to the really vital point, and it is this: When the guns are
+hushed you will find that national and industrial defence among the
+warring countries will be one and the same thing. The Allies learned to
+their cost that the economic advance of Germany was merely part of her
+one-time resistless military machine. Her trade and her preparedness
+went conqueringly hand in hand. Henceforth that game will be played by
+all. England, for instance, will manufacture dyestuffs not only for her
+textile trades, but because coal-tar products are essential to the
+making of high explosives.
+
+Thus, Competition, which was once merely part of the natural progress of
+a country, will hereafter be a large part of the struggle for national
+existence.
+
+There is still another factor: No matter who wins, peace must mean
+prosperity for everybody. For the victor it will take the form of an
+attempted stewardship of trade and navigation; for the vanquished it
+will be the dedication of a terrible energy to the twin restoration of
+pride and product.
+
+Now you begin to see why it is up to the United States to make ready for
+whatever business fate awaits her beyond the uncertain frontiers of
+to-morrow. Nor have we been without warning of what may be in store for
+us. Prohibitive tariffs, blacklists and boycotts, embargoes on mail and
+cargo, the exclusion from England and France of hundreds of our
+manufactured articles--all show which way the international trade winds
+may blow when the belligerents begin to take toll of their losses.
+Meantime, what are the facts?
+
+Take the case of England. Thirty years ago she was the workshop of the
+world. From the Tyne to the Thames her factories hummed with ceaseless
+industry. Her goods went wherever her ships steamed, and that meant the
+globe. Supreme in her insularity--at once her defence and her
+undoing--she became infected with the virus of content. Her steel was
+the best steel; her wares led all the rest. "Take it or leave it!" was
+her selling maxim. When devices came along that saved labour and
+increased production she refused to scrap the old to make way for the
+new. Born, too, was the evil of restricted output. Moss began to grow on
+her vaunted industrial structure. England lagged in the trade
+procession.
+
+But as she lagged the assimilative German streamed in through her
+hospitable door. He served his apprenticeship in British mills; took
+home the secrets and methods of British art and craft. He geared them to
+cheap labour, harnessed product to masterful distribution, and became a
+World Power. Before long he had annexed the dye trade; was competing
+with British steel; was making once-cherished British goods.
+
+What the German did in England he duplicated elsewhere. The world of
+ideas was his field and, with insatiate hunger, he garnered them in. He
+cunningly acquired the sources of raw supply, especially the essentials
+to national defence; for he overlooked nothing. All was grist to his
+mills. He pitched his tents upon debatable trade lands. His rivals
+called it economic penetration, because he invariably took root. For him
+it was merely good business.
+
+Then England suddenly realised that Germany had left her behind in the
+race for international commerce. Indifference lay at the root of this
+backsliding. It was easier and cheaper to buy the German-made product
+and reship it than to produce the same article at home. Sloth hung like
+a chain on English energy. What did it matter? No forest of bayonets
+hemmed her in; she was still Mistress of the Seas.
+
+Meantime Germany dripped with efficiency and ached with expansion. Her
+amazing teamwork between state and business, stimulated by an interested
+finance, drove her on to a place in the sun. The shadows seemed far away
+when the great war crashed into civilisation. Then England woke to the
+folly of her blindness. The mystery of coal-tar products was shut up in
+a German laboratory; the secrets of tungsten, necessary to the toughest
+steel, were imprisoned in a Teutonic mill; and so on down a long list of
+products vital to industry and defence.
+
+Even those early and tragic reverses of the war did not stir the stolid
+British bulk. Men fought for a chance to fight; restriction still
+oppressed factory output. Red tape vied with tradition to block the path
+of military and industrial preparation.
+
+Then the Lion stirred; the sloth fell away; men and munitions were
+enlisted; the strong hand was put on labour tyranny; conscription
+succeeded the haphazard voluntary system. Britain got busy and she has
+buzzed ever since.
+
+When the kingdom had become a huge arsenal; when the old sex differences
+vanished under the touchstone of a common peril; when the first khaki
+host swept to its place in the battle line, and the grey fleets were
+once more queens of the seas, England turned to the task of commercial
+rebuilding, once neglected, but thenceforth to be part and parcel of
+British purpose.
+
+Animating this purpose, stirring it like a vast emotion, was the New
+Battle Cry of Empire--the kindling Creed of United Dominions,
+consecrated to the economic mastery of the world.
+
+But this revival was not an overnight performance. If you know England
+you also know that it takes a colossal jolt to stir the British mind.
+The war had been in full swing for over a year and the countryside was
+an armed camp before the realisation of what might happen commercially
+after the war soaked into the average islander's consciousness.
+
+Under the impassioned eloquence of Lloyd George the munition workers had
+been marshalled into an inspired working host; with the magic of
+Kitchener's name, the greatest of all voluntary armies came into being.
+But it remained for Hughes, of Australia, to point out the fresh path
+for the feet of the race.
+
+Who is Hughes, of Australia? You need not ask in England, for the story
+of his advent, the record of his astounding triumph, the thrilling
+message that he left implanted in the British breast, constitute one of
+the miracles of a war that is one long succession of dramatic episodes.
+This Colonial Prime Minister arrived unknown: he left a popular hero.
+
+Thanks to him, Australia was prepared for war; and when the Mother
+Lioness sent out the world call to her cubs beyond the seas there was
+swift response from the men of bush and range. The world knows what the
+Anzacs did in the Dardanelles; how they registered a monster heroism on
+the rocky heights of Gallipoli; gave a new glory to British arms.
+
+England rang with their achievements. What could she do to pay tribute
+to their courage? Hughes was their national leader and spokesman; so the
+Political Powers That Be said:
+
+"Let us invite the Premier to sit in the councils of the empire and
+advise us about our future trade policy."
+
+Already Hughes had declared trade war on Germany in Australia. Under his
+leadership every German had been banished from commonwealth business; by
+a special act of Parliament the complete and well-nigh war-proof
+Teutonic control of the famous Broken Hill metal fields had been
+annulled. He stood, therefore, as a living defiance to the renewal of
+all commercial relations with the Central Powers. But he went further
+than this: He decreed trade extermination of the enemy--merciless war
+beyond the war.
+
+With his first speech in England Hughes created a sensation. Before he
+came commercial feeling against Germany ran high. Hughes crystallised it
+into a definite cry. He said what eight out of every ten men in the
+street were thinking. His voice became the Voice of Empire. Up and down
+England and before cheering crowds he preached the doctrine of trade war
+to the death on Germany. He denounced the laxness that had permitted the
+"German taint to run like a cancer through the fair body of English
+trade"; he urged complete economic independence of the Dominions. His
+persistent plea was, "We must have the fruits of victory"; and those
+fruits, he declared, comprised all the trade that Germany had hitherto
+enjoyed, and as much more as could be lawfully gained.
+
+He urged that the blood brotherhood of empire, quickened by that
+dramatic S.O.S. call for men across the sea and cemented by the common
+trench hazard, be followed by a union of empire after the war that
+should be self-sufficient. Behind all this eloquent talk of protection
+and prohibition lay the first real menace to America's new place as a
+world trade power. It was the opening call to arms for the war after the
+war.
+
+Hughes did more than set England to thinking in imperial terms. He upset
+most of the calculations of the Powers That Be who invited him. They
+expected an amiable, able and plastic counsellor; they got an oratorical
+live wire, who would not be ruled, and who shocked deep-rooted
+free-trade convictions to the core. He helped to launch a whole new era
+of thought and action; and the next chapter of its progress was now to
+be recorded under circumstances pregnant with meaning for the whole
+universe of trade.
+
+The second winter of war had passed, and with it much of the dark night
+that enshrouded the Allies' arms. On land and sea rained the first blows
+of the great assaults that were to make a summer of content for the
+Entente cause. Its arsenals teemed with shells; its men were fit;
+victory, however distant, seemed at last assured. The time had come to
+prepare a new kind of drive--the combined attack upon enemy trade and
+any other that happened to be in the way.
+
+Thus it came about that on a brilliant sun-lit day last June twoscore
+men sat round a long table in a stately room of a palace that overlooked
+the Seine, in Paris. Eminent lawmakers--Hughes, of Australia, among
+them--were there aplenty; but few practical business men.
+
+On the walls hung the trade maps of the world; spread before them were
+the red-dotted diagrams that showed the water highways where traffic
+flowed in happier and serener days. For coming generations of business
+everywhere it was a fateful meeting because the now famous Economic
+Conference of the Allies was about to reshape those maps and change the
+channels of commerce.
+
+All the while, and less than a hundred miles away, Verdun seethed with
+death; still nearer brewed the storm of the Somme.
+
+These men were assembled to fix the price of all this blood and
+sacrifice, and they did. In what has come to be known as the Paris Pact
+they bound themselves together by economic ties and pledged themselves
+to present a united economic front. They unfurled the banner of
+aggressive reprisal with the sole object of crushing the one-time
+business supremacy of their foes.
+
+The chief recommendations were: To meet, by tariff discrimination,
+boycott or otherwise, any individual or organised trade advance of the
+Central Powers--already Germany, Austria, Turkey and Bulgaria have
+reached a commercial understanding; to forego any "favoured-nation"
+relation with the enemy for an indefinite period; to conserve for
+themselves, "before all others," their natural resources during the
+period of reconstruction; to make themselves independent of enemy
+countries in the raw materials and manufactured products essential to
+their economic well-being; and to facilitate this exchange by
+preferential trade among themselves, and by special and state subsidies
+to shipping, railroads and telegraphs. Another important decree
+prohibits the enemy from engaging in certain industries and professions,
+such as dyestuffs, in allied countries when these industries relate to
+national defence or economic independence.
+
+In short, self-sufficiency became the aim of the whole allied group, to
+be achieved without the aid or consent of any other nation or group of
+nations, be they friends or foes.
+
+Here, then, is the strategy that will rule after the war. A huge allied
+monopoly is projected--a sort of monster militant trust, with cabinets
+of ministers for directorates, armies and navies as trade scouts, and
+whole roused citizenships for salesmen.
+
+Throughout this new Bill of World Trade Rights there is scant mention of
+neutrals--no reference at all to the greatest of non-belligerent
+nations. Yet the document is packed with interest, fraught even with
+highest concern, for us. Upon the ability to be translated into
+offensive and defensive reality will depend a large part of our future
+international commercial relations.
+
+Is the Paris Pact practical? Will it withstand the logical pressure of
+business demand and supply when the war is ended? How will it affect
+American trade?
+
+To try to get the answer I talked with many men in England and France
+who were intimately concerned. Some had sat in the conference; others
+had helped to shape its approach; still others were dedicated to its
+far-spreading purpose. I found an astonishing conflict of opinion. Even
+those who had attended this most momentous of all economic conferences
+were sceptical about complete results. Yet no one questioned the intent
+to smash enemy trade. Will our interests be pinched at the same time?
+
+Regardless of what any European statesman may say to the contrary, one
+deduction of supreme significance to us arises out of the whole
+proposition. Summed up, it is this:
+
+Mutual preference by or for the members of either of the great European
+alliances automatically creates a discrimination against those outside!
+Whether we face the Teuton or the Allies' group--or both--in the grand
+economic line-up, we shall have to fight for commercial privileges that
+once knew no ban.
+
+There are two well-defined beliefs about the practical working out of
+the pact as a pact. Let us take the objections first. They find
+expression in a strong body of opinion that the whole procedure is both
+unhuman and uneconomic--a campaign document, as it were, conceived in
+the heat and passion of a great war, projected for political effect in
+cementing the allied lines. In short, it is what business men would call
+a glorified and stimulated "selling talk," framed to sell good will
+between the nations that now propose to carry war to shop and mill and
+mine.
+
+"But," as a celebrated British economist said to me in London, "while
+all this talk of Economic Alliance sounds well and is serving its
+purpose, the fact must not be overlooked that, though war ends, business
+keeps right on. Self-interest will dictate the policy that pays the
+best." This is a typical comment.
+
+Now we get to the meat of the matter: By the terms of the pact half a
+dozen important nations--to say nothing of the smaller fry--are bound to
+a hard-and-fast trade agreement. Business, in brief, is projected in
+terms of nations.
+
+Go behind this new battle front and you will find that it conflicts with
+an uncompromising commercial rule. Why? Simply because, so far as
+business is concerned, nations may propose, but human beings dispose.
+Individuals, not countries, do business! Being human, these individuals
+are apt to follow the line of least resistance. Hence, the best-laid
+plans for imposing international industrial teamwork are likely to
+founder on those weaknesses of human nature that begin and end in the
+pocketbook.
+
+After the Franco-Prussian War of 1870-71, and while the Peace of
+Versailles was being negotiated, commercial travellers of each nation,
+laden with samples, filled the border villages, ready to dash across the
+frontier and open accounts. Of course no one dreams that such history
+will repeat itself after the present war; but there are many persons in
+England and France to-day who contend that the business needs of peace
+will be stronger than the costly hang-over of wartime passions.
+
+Trade, after all, is a Colossus that rests with one foot upon Necessity
+and the other foot upon Convenience.
+
+Will the Allies be such valued commercial helpmates to each other?
+Perhaps not. When this war is over the fighting countries will be
+impoverished by years of drain and waste. As a result, they will be
+poorer customers for each other, but very sharp competitors.
+International trade is merely an exchange of goods for goods. You cannot
+sell without buying, and vice versa. No groups of nations can live by
+taking in each other's washing. They are bound to get outside linen.
+When peace comes we shall have the lending and purchasing power of the
+world. Can anybody afford to shut us out?
+
+Again: Can the Allies present a united front or carry on a uniform line
+of conduct? Will not their interests overlap and cause an inevitable
+conflict, even when intentions are of the very best?
+
+France, for example, competes with England in chemicals, surgical
+instruments, high-speed tools, scores of things; Russia's competitors in
+wheat are not Germany, but Canada, India and Australia; Italy and France
+are rivals for the same wine markets. Russia for years has kept down the
+high cost of her living by buying cheap German goods at her front door
+and having her projects financed by German capital. Will she face
+bankruptcy by going hundreds--even thousands--of miles out of her way
+and paying more for products? England for years has made huge profits
+out of the re-export of Teutonic articles, thanks to the grace of free
+trade and huge carrying power. Is she likely to forego all this?
+
+In the last analysis Propinquity and the Purse are the Mothers of Trade
+Alliance.
+
+Finally, will not any organised exclusion of German products, coupled
+with a definite and organised campaign to throttle German trade the
+world over, throw the business of the Kaiser's country smack into the
+lap of the United States? Sober reflection over these possibilities may
+stay economic reprisal.
+
+On the other hand, there are many ways by which even a near translation
+of the economic pact into actuality may work hardship--even disaster--to
+American commercial interests. No matter which way we turn when peace
+comes we shall face the proverbial millstones in the shape of two great
+alliances. One is the Allied Group, jealous of our new wealth and world
+power, bitter with the belief that we have coined gold out of agony; the
+other is the Teutonic Union, smarting because of our aid to its
+enemies, stinging under reverses, mad with a desire to recuperate.
+
+Examine our trade relations with warring Europe and you see how
+hazardous a shift in old-time relations would be. To the fighting
+peoples and their colonies in normal times we send nearly seventy-eight
+per cent of our exports, and from them we derive seventy per cent of our
+exports. The Allies alone, principally England and her colonies, get
+sixty-three per cent of these exports and send us fifty-four per cent of
+all we get from foreign lands.
+
+As the National Foreign-Trade Council of the United States points out:
+"Any sweeping change of tariff, navigation or financial policy on the
+part of either group of the Allies, and particularly on the part of the
+Entente Allies, may seriously affect the domestic prosperity of the
+United States, in which foreign trade is a vital element."
+
+Why is this foreign trade so vital? Because, during these last two years
+of world upheaval we have rolled up the immense favourable trade balance
+of over three billion dollars. In peace time this would be paid for in
+merchandise. But fighting Europe's industries, with the exception of a
+part of England's, are mobilised for munitions. Therefore, these goods
+have been paid for largely in gold.
+
+This gold is now part of our basis of credit. When the war ends Europe
+will make every effort that ingenuity, backed up by trade resource, can
+devise to get that gold back. One way is through loans from us; the
+other is by exports to us. Now you see why we must maintain our foreign
+commerce.
+
+Our huge gold reserve hides another menace: The war demands for our
+commodities, paid for with the yellow metal, have increased the cost of
+production; and it will stay up. This will lead to an unequal
+competition with the cheap labour markets of Europe when the war is
+over. Both groups of Allies will be able to undersell us.
+
+Turn to the raw materials and you encounter a further danger in the
+economic pact. If the Allies develop their own sources, it will cut down
+our export of cotton, copper and oil. If they cannot develop sufficient
+sources for self-supply they may, through co-operative buying outside
+their dominions, satisfy their needs. In the third place, they may
+stimulate, through tariff or shipping concessions, or by
+subsidies--which are much talked of in Europe to-day--a preference for
+their own manufactures over American products in both allied and neutral
+markets.
+
+Take navigation: England controls an immense shipping. As a matter of
+fact, outside the three-mile limit, she practically owns the waters of
+the world. If she makes lower rates for her allies, or others to whom
+she gives preference, where shall we be in our chronic and unpardonable
+dependence upon foreign bottoms? Here is where we shall pay the price
+for neglecting our merchant marine.
+
+Still another menace to our trade lies in preferential alliances between
+Mother Countries and their colonies, which is part of the projected
+programme. Our next-door neighbour, Canada, has just given an
+illuminating instance of what may be in store for us. A Co-operative
+Export Association has been formed in the Dominion to get business
+throughout the British Empire and the other allied nations. In the
+circular announcing its organisation it declares that "the products of
+Canada will be preferred against the products of her great neutral
+competitor, the United States, who has stayed outside of the war and has
+borne no sacrifice of life and money made by the allied countries."
+
+Return to the economic pact again and you find that it continues to
+bristle with dangerous possibilities for us. You will recall that one of
+the clauses forbids the resumption of a favoured-nation arrangement with
+enemy countries for a period "to be fixed by mutual agreement." This may
+be for an indefinite time.
+
+Now the danger here lies in the European interpretation of the
+favoured-nation idea. To quote an authority: "Most of these countries
+have treaties under which each must grant most-favoured-nation treatment
+to the other; and this means that a reduction in duties granted to one
+country is automatically extended to all other countries with whom such
+treaties exist. The result is that the lowest rate in any treaty
+becomes, with exception, the rate extended to all countries."
+
+We have the favoured-nation relation with many European countries, and
+herein lies the possible danger: The war automatically annulled all
+treaties between belligerents. When the day of treaty making comes again
+shall we suffer for the sins of friend and foe in the rearrangement of
+international trade and lose some precious commercial privileges? It is
+worth thinking about.
+
+
+
+
+II--_England Awake_
+
+
+Meantime, regardless of how the economic pact works out, England's
+policy is "Deeds, not Words," as she prepares for the time when normal
+life and business succeed the strain and frenzy of fighting days.
+
+No man can range up and down the British Isles to-day without catching
+the thrill of a galvanic awakening, or feeling an imperial heartbeat
+that proclaims a people roused and alive to what the future holds and
+means. The kingdom is a mighty crucible out of which will emerge a new
+England determined to come back to her old industrial authority. It is
+with England that our commerce must reckon; it is English competition
+that will grapple with Yankee enterprise wherever the trade winds blow.
+
+There are many reasons why. "For England," as one man has put it,
+"victory must mean prosperity. However triumphant she may be in arms,
+her future lies in a preeminence in world industries. Through it she
+will rise as an empire or sink to a second-rate nation."
+
+In the second place, as all hope of indemnity fades, England realises
+that she will not only have to pay all her own bills but likewise some
+of the bills of her allies. Already her millions have been poured into
+the allied defence; many more must follow.
+
+Hence, the relentless energy of her throbbing mills; the searching
+appraisal of her resources; the marshalling of all her genius of trade
+conquest. Dominating all this is the kindling idea of a self-contained
+empire, linked with the slogan: "Home Patronage of Home Product." The
+war found her unprepared to fight; she is determined that peace shall
+see her fit for economic battle.
+
+This is what she is doing and every act has a meaning all its own for
+us. Take Industry: Forty-eight hundred government-controlled factories,
+working day and night, are sending out a ceaseless flood of war
+supplies. The old bars of restricted output are down; the old sex
+discrimination has faded away. Women are doing men's work, getting men's
+pay, making themselves useful and necessary cogs in the productive
+machine. They will neither quit nor lose their cunning when peace
+comes.
+
+I have watched the inspiring spectacle of some of these factories, have
+walked through their forest of American-made automatics, heard the hum
+of American tools as they pounded and drilled and ground the instruments
+of death. What does it signify? This: that quantity output of shot and
+shell for war means quantity output of motors and many other products
+for peace. You may say that quantity output is a matter of temperament
+and that the British nature cannot be adapted to it; but speeded-up
+munitions making has proved the contrary. The British workman has
+learned to his profit that it pays to step lively. High war wages have
+accustomed him to luxuries he never enjoyed before, and he will not give
+them up. Unrestricted output has come to stay.
+
+Five years ago the efficiency expert was regarded in England as an
+intruder and a quack; to use a stop watch on production was high crime
+and treason. To-day there are thousands of students of business science
+and factory management. In the spinning district girls in clogs sit
+alongside their foremen listening to lectures on how to save time and
+energy in work. Scores of old establishments are being reborn
+productively. There is the case of a famous chocolate works that before
+the war rebuffed an instructor in factory reorganisation. Last year it
+saw the light, hired an American expert, and to-day the output has been
+increased by twenty-five per cent.
+
+The infant industries, growing out of the needs of war and the desire of
+self-sufficiency, are resting on the foundations of the new creed.
+"Speed up!" is the industrial cry, and with it goes a whole new scheme
+of national industrial education. The British youth will be taught a
+trade almost with his A-B-C's.
+
+Formerly in England the standardisation of plan and product was almost
+unknown. For example, no matter how closely ships resembled each other
+in tonnage, structure or design, a separate drawing was made for each.
+Now on the Clyde the same specifications serve for twenty vessels.
+England has gone into the wholesale production; and what is true of
+ships in the stress of hungry war demand will be true of scores of
+articles for trade afterward. The old rule-of-thumb traditions that
+hampered expansion have gone into the discard, along with voluntary
+military service and the fetish of free trade.
+
+Typical of the new methods is the standardisation of exports, which have
+increased steadily during the past year. In a room of the Building of
+the Board of Trade, down in Whitehall, and where the whole trade
+strategy of the war is worked out, I saw a significant diagram, streaked
+with purple and red lines, which shows the way it is done. The purple
+indicated the rosters of the great industries; the red, the number of
+men recruited from them for military service. No matter how the battle
+lines yearn for men, the workers in the factories that send goods across
+the sea are kept at their task. This diagram is the barometer. For
+exports keep up the rate of exchange and husband gold.
+
+England is creating a whole new line of industrial defence. The
+manufacture of dyestuffs will illustrate: This process, which originated
+in England, was permitted to pass to the Germans, who practically got a
+world monopoly in it. Now England is determined that this and similar
+dependence must cease.
+
+For dyemaking she has established a systematic co-operation among state,
+education and trade. In the University of Leeds a department in colour
+chemistry and dyeing has been established, to make researches and to
+give special facilities to firms entering the industry, all in the
+national interest. A huge, subsidised mother concern, known as British
+Dyes, Limited, has been formed, and it will take the place of the great
+dye trust of Germany, in which the government was a partner.
+
+This procedure is being repeated in the launching of an optical-glass
+industry; this trade has also been in Teutonic hands. I could cite many
+other instances, but these will show the new spirit of British
+commercial enterprise and protection.
+
+Everywhere nationalisation is the keynote of trade activity. Coal
+furnishes an instance: The collieries of the kingdom not only stoke the
+fires of myriad furnaces but drive the ships of a mighty marine. Through
+her control of coal England has one whip hand over her allies, for many
+of the French mines are in the occupied districts, and Italy's supply
+from Germany has stopped. Coal means life in war or peace. Now England
+proposes a state control of coal similar to that of railroads.
+
+It spells fresh power over the neutral shipping that coals at British
+ports. If the government controls the coal it will be in a position to
+stipulate the use that the consumer shall make of it, and require him to
+call for his return cargo at specified ports. Such supervision in war
+may mean similar domination in peace--another bulwark for British
+control of the sea.
+
+Throughout England all trade facilities are being broadened and
+bettered. The local Chambers of Commerce, whose chief function for years
+was solemnly to pass resolutions, have stirred out of their slumbers.
+The Birmingham body has formed a House of Commerce to stimulate and
+develop the commerce of the capital of the Midlands.
+
+This stimulation at home is accompanied by a programme of trade
+extension abroad. The Board of Trade has granted a licence to the
+Latin-American Chamber of Commerce in Great Britain, formed to promote
+British trade in Central and South America and Mexico. Sections of the
+chamber are being organised for each of the important trades and
+industries in the kingdom, and committees named to enter into
+negotiations with every one of the Latin-American republics, where
+offices will be established in all important towns.
+
+The Board of Trade has also learned the lesson of co-operation for
+foreign trade. As one result, British syndicates, composed of small
+manufacturers, who share the overhead cost, are forming to open up new
+markets the world over. These syndicates correspond with the familiar
+German Cartel, which did so much to plant German products wherever the
+sun shone.
+
+England, too, has wiped out one other block to her trade expansion: For
+years many of her consuls were naturalised Germans. Many of them were
+trustworthy public servants. Others, true to the promptings of birth,
+diverted trade to their Fatherland. To-day the Consular Service is
+purged of Teutonic blood. It is one more evidence of the gospel of
+"England for the English!"
+
+All this new trade expansion cannot be achieved without the real sinew
+of war, which is capital. Here, too, England is awake to the emergency.
+Typical of her plan of campaign is the projected British Trade Bank,
+which will provide facilities for oversea commercial development, and
+which will not conflict with the work ordinarily done by the
+joint-stock, colonial and British foreign banks. It will do for British
+foreign trade what the huge German combinations of capital did so long
+and so effectively for Teuton commerce. Furthermore, it will make a
+close corporation of finance and trade, with the government sitting in
+the board of directors and lending all the aid that imperial support can
+bestow.
+
+The bank will be capitalised at fifty million dollars. It will not
+accept deposits subject to call at short notice, which means constant
+mobilisation of resources; it will open accounts only with those who
+propose to make use of its oversea machinery; it will specialise in
+credits for clients abroad, and it will become the centre of syndicate
+operations. One of its chief purposes, I might add, will be to enable
+the British manufacturer and exporter to assume profitably the long
+credits so much desired in foreign trade.
+
+From the confidential report of its organisation let me quote one
+illuminating paragraph which is full of suggestion for American banking,
+for it shows the new idea of British preparedness for world business.
+Here it is:
+
+"Nearly as important as the Board would be the General Staff. It is fair
+to assume that women will in the future take a considerable share in
+purely clerical work, and this fact will enable the institution to take
+fuller advantage of the qualifications of its male staff to push its
+affairs in every quarter of the globe. Youths should not be engaged
+without a language qualification, and after a few years' training they
+should be sent abroad. It could probably be arranged that associated
+banks abroad would agree to employ at each of their principal branches
+one of the Institution's clerks, not necessarily to remain there for an
+indefinite period, but to get a knowledge of the trade and
+characteristics of the country. Such clerks might in many cases sever
+their connection with the banks to which they were appointed and start
+in business on their own account. They would, however, probably look
+upon the institution as their 'Alma Mater,' Every endeavour should be
+made to promote _esprit de corps_; and where exceptional ability is
+developed it should be ungrudgingly rewarded. If industry is to be
+extended it is essential that British products should be _pushed_; and
+manufacturers, merchants and bankers must combine to push them. It is
+believed that this pushing could be assisted by the creation of a body
+of young business men in the way above described."
+
+The scope and purpose of this British Trade Bank suggest another East
+India Company with all the possibilities of gold and glory which
+attended that romantic eighteenth-century enterprise. Perhaps another
+Clive or a second Hastings is somewhere in the making.
+
+That the British Government proposes to follow the German lead and
+definitely go into business--thus reversing its tradition of aloofness
+from financial enterprise--is shown in the new British and Italian
+Corporation, formed to establish close economic relations between
+Britain and Italy. It starts a whole era in British banking, for it
+means the subsidising of a private undertaking out of national funds.
+
+It embodies a meaning that goes deeper and travels much farther than
+this. Up to the outbreak of the great war Germany was the banker of
+Italy. Cities like Milan and Rome were almost completely in the grip of
+the Teutonic lender, and his country cashed in strong on this surest and
+hardest of all dominations. This was the one big reason why the Italian
+declaration of war against Germany was so long delayed. With this new
+banking corporation England not only supplants the German influence but
+forges the economic irons that will bind Italy to her.
+
+The capital of the British and Italian Corporation is nominally only
+five million dollars. The government, however, agrees to contribute
+during each of the first ten years of its existence the sum of two
+hundred and fifty thousand dollars. Though imperial stimulation of trade
+is one of its main objects, this institution is not without its larger
+political value. As this and many other similar enterprises show,
+politics and world trade, so far as Great Britain is concerned, will
+hereafter be closely interwoven.
+
+Throughout all this British organisation runs the increasing purpose of
+an Empire Self-Contained. Whether that phase of the Paris Pact which
+calls for development and mobilisation of natural resources sees the
+light of reality or not, Britain is determined to take no chances for
+her own. She is scouring and searching the world for new fields and new
+supplies. She is planning to increase her tea and coffee growing in
+Ceylon and make cotton plantations of huge tracts in India and Africa.
+The control of the metal fields of Australia has reverted to her hands;
+she will get tungsten and oil from Burma. It took the war to make her
+realise that, with the exception of the United States, Cuba and Hawaii,
+all the sugar-cane areas of the world are within the imperial confines.
+They will now become part of the Empire of Self-Supply. Even a partial
+carrying out of this far-flung plan is bound seriously to affect our
+whole export business.
+
+You have seen how this self-contained idea may work abroad. Go back to
+England and you find it forecasting an agricultural revolution that may
+be one of the after-war miracles.
+
+For many years England has raised about twenty per cent of her wheat
+supplies. One reason was her dependence on grass instead of arable land;
+another was the inherent objection of the British farmer to adopt
+scientific methods of soil cultivation or engage in co-operative
+marketing. The old way was the best way; he wanted to go "on his own."
+
+The war has opened his eyes, and likewise the eyes and purse of the
+ultimate consumer. Denmark did some of this awakening. England depended
+upon her for enormous supplies of bacon, cheese, butter and eggs. When
+the war broke out and the ring of steel hemmed Germany in, the
+speculative prices offered by the Fatherland were too much for the
+little domain. Holland also "let down" her old customer, poured her food
+into Germany, and fattened on immense profits. Norway and Sweden, which
+were also important sources of more or less perishable British food
+supplies, have done the same thing. When peace comes you may be sure
+that England will have a reckoning.
+
+This scarcity of food, coupled with the incessant sinking of supply
+ships by enemy submarines, the rigid censorship of imports, and all
+those other factors that bring about the high cost of war, has made the
+Englishman sit up and take notice of his agricultural plight.
+
+"We must grow more of our food," is the new determination. To achieve it
+plans for collective marketing, for intensive farming, for co-operative
+land-credit banks, are being made. The gentleman farmer will become a
+working farmer.
+
+England's gospel of self-sufficiency has a significance for us that
+extends far beyond her growing independence in foodstuffs and raw
+materials. It is fashioning a weapon aimed straight at the heart of our
+overseas industrial development.
+
+Most people who read the newspapers know that many articles of American
+make, ranging from bathtubs to motor cars, have been excluded from
+England. The reasons for this--which are all logical--are the necessity
+for cutting down imports to protect the trade balance and keep the gold
+at home; the need of ship tonnage for food and war supplies; and the
+campaign to curtail luxury.
+
+Admirable as are these reasons, there is a growing feeling among
+Americans doing business in England that this wartime prohibition, which
+is part of the programme of military necessity, is the prelude to a more
+permanent, if less drastic, exclusion when peace comes.
+
+Habit is strong with Englishmen, and the shrewd insular manufacturer has
+been quick to see the opportunities for advancement that lie in this
+closed-door campaign.
+
+"Get the consumer out of the habit of using a certain American product
+during the war," he argues, "and when the war is over--even before--he
+will be a good 'prospect' for the English substitute."
+
+Here is a concrete story that will illustrate how the exclusion works
+and what lies behind:
+
+Last summer a certain well-known American machine, whose gross annual
+business in Great Britain alone amounts to more than half a million
+dollars a year, was suddenly denied entrance into the kingdom. When the
+managing director protested that it was a necessity in hundreds of
+British ships he was told that it made no difference.
+
+"But what are the reasons for exclusion?" he asked.
+
+"We don't want English money to go out of England," was the reply.
+
+"Then we shall not only bank all our receipts here but will bring over
+one hundred thousand pounds more," came from the director.
+
+It had no effect.
+
+"Is it tonnage?" was the next query.
+
+"Yes," said the official.
+
+"Then we shall ship machines in our president's yacht," was the ready
+response.
+
+This staggered the official. After a long discussion the director
+received permission to bring in what machines were on the way; and,
+also, he got a date for a second hearing.
+
+Meantime he adapted a type of machine to the needs of a certain
+department in the Board of Trade, sold two, and got them installed and
+working before he next appeared before the Trade Censors, who, by the
+way, knew absolutely nothing at all about the article they were
+prohibiting. The first question popped to him was:
+
+"Are machines like yours made in England?"
+
+"Yes," replied the director; "but they have never been practical or
+commercial."
+
+Then he produced the record of the machines he had sold to the
+government. Each one saved the labour of eight persons and considerable
+office space. This made a distinct impression and the company got
+permission to import two hundred tons of their product. But not even an
+application for more can be filed until the first of next year. Only the
+dire necessity for this article, coupled with the fact that it is
+without British competition, got it over.
+
+I cite this incident to show what many Americans in England believe to
+be one of the real reasons behind the prohibition, which, summed up, is
+simply this: England is trying to keep out everything that competes with
+anything that is made in England or that can be made in England!
+
+For some time after the war began our motor cars went in free. Then
+followed an ad-valorem duty of thirty-three and a third per cent.
+Despite this handicap, agents were able to sell American machines, which
+were both popular and serviceable. The tariff was imposed ostensibly to
+cut down imports, but mainly to please the British motor manufacturers,
+who claimed that the surrender of their factories to the government for
+making munitions left the automobile market at the mercy of the American
+product, which meant loss of goodwill.
+
+Subsequently a complete embargo was placed on the entry of American
+pleasure cars and the business practically came to a standstill. What is
+the result? Let the agent of a well-known popular-priced American car
+tell his story.
+
+"Before the war and up to the time of the embargo," he said, "I was
+selling a good many American automobiles. With the embargo on cars also
+came a prohibition of spare parts. It was absolutely impossible to get
+any into the country. Many of my customers wanted replacements, and,
+when I could not furnish them, they abandoned the cars I sold them and
+bought English-made machines whose parts could be replaced."
+
+All through the motor business in England I found a strong disposition
+on the part of the British manufacturer and dealer to create a market
+for his own car as soon as the war is over. Some even talked of a large
+output of low-priced machines to meet the competition of the familiar
+car that put the automobile joke on the map. The only American comeback
+to this growing prejudice is to build factories or assembling plants
+within the British Isles. This will save excessive freight rates, keep
+down the costly-tariff "overhead," and get the benefit of all the
+goodwill accruing from the employment of British labour.
+
+A by-product of British exclusion is the inauguration of a
+Made-in-England campaign. Buy a hat in Regent Street or Oxford Street
+and you see stamped on the inside band the words, "British Manufacture."
+This English crusade is more likely to succeed than our Made-in-U.S.A.
+attempt, for the simple reason that the government is squarely behind
+it.
+
+This same spirit dominates newspaper publicity. You find a British
+fountain pen glowingly proclaimed in a big display advertisement,
+illustrated with the picture of men trundling boxes of gold down to a
+waiting steamer. Alongside are these words:
+
+"The man who buys a foreign-made fountain pen is paying away gold, even
+if the money he hands across the counter is a Treasury note. The British
+shop may get the paper; the foreign manufacturer gets gold for all the
+pens he sends over here. What is the sense of carrying an empty
+sovereign-purse in one pocket if you put a foreign-made fountain pen in
+another?"
+
+Behind all this British exclusion is an old prejudice against our wares.
+There has never been any secret about it. I found a large body of
+opinion headed by brilliant men who have bidden farewell to the
+Hands-Across-the-Sea sentiment; who have little faith in the theory that
+blood is thicker than water when it comes to a keen commercial clash.
+
+What of the human element behind the whole British awakening? Will
+organised labour, an ancient sore on the British body, rise up and
+complicate these well-laid schemes for economic expansion? As with the
+question of practicability of the Paris Pact, there is a wide difference
+of opinion.
+
+On one hand, you find the air full of the menace of post-war
+unemployment and the problem of replacing the woman worker by the man
+who went away to fight. To offset this, however, there will be the
+undoubted scarcity of male help due to battle or disease, and the
+inevitable emigration of the soldier, desirous of a free and open life,
+to the Colonies.
+
+On the other hand, there is the conviction that unrestricted output,
+having registered its golden returns, will be the rule, not the
+exception, among the English artisans. England's frenzied desire for
+economic authority proclaims a job for everybody.
+
+I asked a member of the British Cabinet, a man perhaps better qualified
+than any other in England to speak on this subject, to sum up the whole
+after-war labour situation, as he saw it, and his epigrammatic reply
+was:
+
+"After the war capital will be ungrudging in its remuneration to labour;
+and labour, in turn, must be ungrudging in its output."
+
+No one doubts that after the war the British worker will have his full
+share of profits. As one large manufacturer told me: "We have so gotten
+into the habit of turning our profits over to the government that it
+will be easy to divide with our employees." Here may be the panacea for
+the whole English labour ill.
+
+But, whatever may be the readjustment of this labour problem, one thing
+is certain: Peace will find a disciplined England. The five million men,
+trained to military service, will dominate the new English life; and
+this means that it will be orderly and productive.
+
+With this discipline will come a democracy--social and industrial--such
+as England has never known. The comradeship between peer and valet,
+master and man, born of common danger under fire, will find renewal, in
+part at least, when they go back to their respective tasks. This wiping
+out of caste in shop, mill and counting room will likewise remove one of
+the old barriers to the larger prosperity.
+
+England wants the closest trade relations with her Dominions. But will
+the Colonies accept the idea of a fiscal union of empire, which
+practically means intercolonial free trade? Or will they want to
+protect their own industries, even against the Mother Country? Like the
+French, they are willing to risk life and limb for a cause, but they
+likewise want to guard jealously their purse and products. They have not
+forgotten the click when Churchill locked the home door against them.
+
+This leads to the question that is agitating all England: Will peace
+bring tariff reform? Both English and American economic destiny will be
+affected by the decision, whatever it may be.
+
+Canvass England and you encounter a widespread movement that means, as
+the advocates see it, a broadening of the home market; security for the
+infant "key" industries; a safeguard for British labour--in short, the
+end of the old inequality of a Free England against a Protected Germany.
+
+Protection in England, hitched to a world-wide freeze-out business
+campaign against Germany, would doubtless divert a whole new
+international discount business to New York. German exporters under
+these circumstances might refuse payments from their other customers on
+London, demanding bills on New York instead. To hold this business,
+however, we should need direct banking and cable connections with all
+the grand divisions of trade, adequate sea-carrying power, dollar
+credits, and a government friendly to business.
+
+Then, there is the middle English ground which demands a "tariff for
+revenue only," and subsidy--not protection--for the new industries.
+
+Combating all this is the dyed-in-the-bone free trader, who points to
+the fact that free trade made England the richest of the Allies and gave
+her control of the sea. "How can a nation that is one huge seaport, and
+which lives by foreign trade, ever be a protectionist?" he asks.
+
+If he has his way we shall have to struggle harder for our share of
+universal business. More than this, it will block what is likely to be
+one of Germany's schemes for rehabilitation. Here is the possible
+procedure:
+
+Germany's financial position after the war will be badly strained. She
+can be saved only by an effective export policy. To do this she must
+seek all possible neutral markets; and to get them quickly she will
+offer broad--even extravagant--reciprocity programmes. They may conflict
+with the proposed Franco-British programmes of protection and embargo
+against neutral trade interests.
+
+But if the Franco-British programme leaves the allied markets for goods
+and money open, as before the war, the German reciprocity scheme will
+fail of its effect by the sheer force of natural competition. Hence
+England can throttle the re-establishment of German credit by a free and
+liberal trade policy, open to all the world. Though poor, after the war
+she can actually be stronger, in view of her great army and navy, her
+new individual efficiency, and renewed commercial vitality.
+
+Will all this keep Germany out? There are many people, even in England,
+who think not. Already Germans by the thousands are becoming naturalised
+citizens of Holland, Spain, Switzerland and Denmark; building factories
+there and shipping the product into the enemy strongholds, stamped with
+neutral names. Much of the "Swiss" chocolate you buy in Paris was made
+by Teutonic hands.
+
+A French manufacturer who bought a grinding machine in Zurich the other
+day thought it looked familiar; and when he compared it with a picture
+in a German catalogue he found it was the identical article, made in
+Germany, which had been offered to him by a Frankfort firm six months
+before the war began. Only certificates of origin will bar out the
+German product.
+
+Amid the hatred that the war has engendered, England wonders at the
+price she will pay for German exclusion. Men like Sir John Simon
+solemnly assert in Parliament: "In proportion as we divert German trade
+after the war we throw the trade of the Central European Powers more and
+more into the hands of America, with the result that, unhappily, if we
+became involved in another European war we should not be able to count
+on the friendly neutrality which America has shown in this war." Others
+inquire: "What of the future trade of India, the great part of whose
+cotton crop before the war went to Central Europe?"
+
+Sober-minded and farseeing men, in England and elsewhere, believe that,
+despite the ravage of her men and trade, Germany will come back
+commercially.
+
+"You must not forget," said one of them, "that, no matter how badly she
+is beaten, Germany will still be a going business concern. She will have
+an immense plant; her genius of efficiency and organisation cannot be
+killed. Through her magnificent industrial education system she has
+trained millions of boys to take the vacant stools and stands in shop
+and mill. England and France have no such reserves. Besides, if we
+pauperise Germany, no one--not even Belgium--will get a pound of
+indemnity."
+
+You have now seen the moving picture of half a world in process of
+significant change, wrought by clash of arms, and facing a complete
+economic readjustment with peace. Whether the Paris Pact is practical or
+visionary, no matter if England is free trade or protectionist,
+regardless of Germany's ability to find herself industrially at once,
+one thing we do know--the end of the war will find the Empire of World
+Trade molten and in the remaking.
+
+Fresh paths must be shaped; the race will be to the best-prepared.
+Whatever our position, be it neutral or belligerent--and no man can
+tell which now--we shall face a supreme test of our resource and our
+readiness. What can we do to meet this crisis, which will mean continued
+prosperity or costly reaction?
+
+Many things; but they must be done now, when immunity from actual
+conflict gives us a merciful leeway. More than ever before, we shall
+face united business fronts. Therefore, co-operation among competitors
+is necessary to a successful foreign trade.
+
+Since the coming trade war will rage round tariffs, it will be well to
+heed the resolution recently adopted by the National Foreign-Trade
+Council: "That the American tariff system, whatever be its underlying
+principle, shall possess adequate resources for the encouragement of the
+foreign trade of the United States by commercial treaties or agreements,
+or executive concessions within defined limits, and for its protection
+from undue discrimination in the markets of the world." In short, we
+must have a flexible and bargaining tariff.
+
+We must train our men for foreign-trade fields; they must know alien
+languages as well as needs; we must perfect processes of packing that
+will deliver goods intact. With these goods, we must sell goodwill
+through service and contact. Secondhand-business getting will have no
+place in the new rivalry.
+
+Our money, too, must go adventuring, and courage must combine with
+capital. Our dawning international banking system, which first saw the
+light in South America, needs world-wide expansion. Dollar credit will
+be a world necessity if we capitalise the opportunity that peace may
+bring us. No financial aid should be so welcome as ours, because it is
+nonpolitical.
+
+This trade machinery will be inadequate if we have no merchant marine.
+Chronic failure to heed the warning for a national shipping will make
+our dependence upon foreign holds both acute and costly.
+
+Our trade needs more than a government professedly friendly to business.
+It requires a definite co-operation with business. An advisory board of
+practical men of commercial affairs would be of more constructive
+benefit to the country than all the lawmakers combined.
+
+Here, then, is the protection against organised European economic
+aggression, the armour for the inevitable trade conflict. Unless we gird
+it on, we shall be onlookers instead of participants.
+
+
+
+
+III--_American Business in France_
+
+
+Two Americans met by chance one day last summer at a little table in
+front of the Cafe de la Paix in Paris. One had arrived only a month
+before; the other was an old resident in France. After the fashion of
+their kind they became acquainted and began to talk. Before them passed
+a picturesque parade, brilliant with the uniforms of half a dozen
+nations, and streaked with the symbols of mourning that attested to the
+ravage of war.
+
+"There is something wrong with these Frenchmen," said the first
+American.
+
+"How is that?" asked his companion.
+
+"It's like this," was the reply. "I have sold goods from the Atlantic to
+the Pacific, and yet I can get nowhere over here. I give these fellows
+the swiftest line of selling talk in the world and it makes no
+impression."
+
+"How well do you speak French?" queried his new-found acquaintance.
+
+"Not at all."
+
+"Have you studied the ways and needs of the Frenchman?"
+
+"Of course not. I've got something they want and they ought to take it."
+
+The man who had long lived in France was silent for a moment. Then he
+said:
+
+"The fault is not with the Frenchman, my friend. Think it over." He did,
+and with reflection he changed his method. He put a curb on strenuosity;
+started to study the French temperament; he began to see why he had not
+succeeded.
+
+This incident illumines one of the strangest and most inconsistent
+situations in our foreign trade. By a curious irony we have failed to
+realise our commercial destiny in the one Allied Nation where real
+respect and affection for us remain. France--a sister Republic--is bound
+to us by sentimental ties and the kinship of a common struggle for
+liberty. Her people are warm-hearted and generous and _want_ to do
+business with us.
+
+Yet, as long and costly experience shows, we have almost gone out of our
+way to clash with their customs and misunderstand their motives. In
+short, we have neglected a great opportunity to develop a permanent and
+worth-while export business with them. It was bad enough before the war.
+Events since the outbreak of the monster conflict have emphasised it
+more keenly.
+
+       *       *       *       *       *
+
+Why have Americans failed so signally in France? There are many reasons.
+First of all, their whole system of selling has been wrong.
+
+For years many of our manufacturers were represented in Paris and
+elsewhere in France by German agents, who also represented producers in
+their own country. The energetic Teuton did not hesitate to install an
+American machine or a line of American goods. But what happened? When
+the machine part wore out or the stock of goods was exhausted, there was
+seldom any American product on hand to meet the swift and sometime
+impatient demand for replacement or renewal. By a strange "coincidence"
+there was always an abundant supply of German material available. The
+German salesman always saw to that. Necessity knows no nationality. The
+result invariably was that German output supplanted the American. The
+Frenchman did not want to be caught the second time.
+
+This prompt renewal created an immense goodwill for German goods. Right
+here is one of the first big lessons for the American exporter to learn,
+no matter what country he expects to sell in. It lies in keeping goods
+"on the shelf," and being able to meet emergency demand.
+
+The Frenchman in trade is a sort of Missourian. He must be "shown." He
+shies at samples; distrusts drawings. He likes to go into a warehouse
+and look over stocks; it gives him satisfaction to pick and choose. He
+is the most fastidious buyer in the world and he likes to do things his
+own way. Any attempt to ram foreign methods--either in buying or
+selling--down his sensitive throat is bound to react.
+
+Here is a case in point: The General Representative in France of a large
+American manufacturing concern decided to engage some French salesmen.
+He was a shark on business system; he fairly oozed with "scientific
+salesmanship"; he decided to gird his Gallic emissaries with the most
+improved American selling methods. So he prepared an elaborate "What I
+did" schedule for them. Into it was to be written every evening the
+complete record of the business day.
+
+When he handed one of these blanks to his leading French salesman, that
+gentleman shrugged his shoulders and said:
+
+"It eez imposseeble."
+
+When the American became insistent all the French salesmen resigned in a
+body. This objection was purely temperamental. If there is one thing
+above all others that puts a Frenchman into panic it is publicity of his
+personal affairs. He believes that the greatest crime in the world is to
+be found out, whether in business or in love. There was nothing perhaps
+to hide in a biography of his daily work, but it was the wrong tack to
+take.
+
+In the same way militant and masterful salesmanship also fails. A man
+may be a crack seller in Kansas City, Denver, and all points West, but
+he finds to his sorrow that his dynamic process goes straight over the
+head of a Frenchman. He refuses to be driven; he wants time for mature
+reflection and an opportunity to talk the thing over with his wife.
+
+This irritating attempt to force uncongenial methods on French buyers is
+duplicated in a corresponding lack of plain everyday intelligence in
+meeting the simplest French requirements.
+
+Indeed, the omissions of Americans are wellnigh incredible. Take the
+matter of postage to France. The head of a great French concern made
+this statement to me in sober earnestness: "Won't you be good enough to
+beg American manufacturers to put their office boys through a course of
+instruction in postal rates between Europe and the United States?"
+
+When I asked him the reason he said: "We sometimes get twenty letters
+from America in one mail and each comes under a two cent stamp. This has
+been going on for years despite our repeated protest about it. Some
+months my firm was required to pay from ten to fifteen dollars in excess
+postage."
+
+Now the amount of money involved in this transaction is the slightest
+feature: it is the chronic laxity and carelessness of the American
+business man that gets on the Frenchman's nerve.
+
+Here is another case in point: A well known French firm has been writing
+weekly letters for the past eighteen months to a New England factory
+trying to persuade the Manager to mark his export cases with a stencil
+plate and in ink rather than with a heavy lead pencil, as the latter
+marking is almost obliterated by the time the shipment arrives at Havre.
+In fact, this French firm went to the extent of sending a stencil and
+brush to New England to be used in marking the firm's cases. But the old
+pencil habit is too strong and a weekly hunt has to be instituted on the
+French docks for odd cases containing valuable consignments of machine
+tools. Vexatious delays result. It is just one more nail that the
+heedless American manufacturer drives into the coffin of his French
+business.
+
+These incidents and many more that I could cite, are merely the
+approach, however, to a succession of mistakes that make you wonder if
+so-called Yankee enterprise gets stage fright or "cold feet" as soon as
+it comes in contact with French commercial possibilities. Let me now
+tell the prize story of neglected trade opportunity.
+
+Last spring the American Commercial Attache in Paris made a speech at a
+dinner in Philadelphia. He painted such a glowing picture of trade
+prospects in France that the head of one of the greatest hardware
+concerns in America, who happened to be present, came to him afterwards
+with enthusiasm and said: "We want to get some of that foreign business
+you talked about and we will do everything in our power to land it. Help
+us if you can."
+
+The Attache promised that he would and returned to his post in Paris. He
+studied the hardware situation and found a tremendous need for our
+goods. He was about to make a report to the hardware manufacturer when
+an alert upstanding young American breezed into his office and said:
+
+"I have been looking into the hardware situation here and I find that
+there is a big chance for us. In fact, I have already booked some fat
+orders. Will you put me in touch with the right people in America to
+handle the business?"
+
+"Certainly," replied the Attache. "I know just the firm you are looking
+for." He recalled the enthusiastic remarks of the man who came to him
+after the Philadelphia speech, so he said: "Write to the Blank Hardware
+Company in ----, and I am sure you will get quick action."
+
+"No," said the enterprising young American, "I will cable." He
+immediately got off a long wire telling what orders he had and giving
+gilt edge banking references.
+
+Quite naturally he expected a cable reply, but he was too optimistic.
+Day after day passed amid a great silence from America. At the end of
+two weeks he received a _letter_ from the Export Manager of the firm who
+said, among other things: "We are not prepared to quote any prices for
+the French trade now. We have decided to wait with any extension of our
+foreign business until after the war. Meanwhile you might call on our
+agent in Paris who may be able to do something for you."
+
+The young American dashed up to the agent's warehouse. The agent was an
+old man becalmed in a sea of empty space. All his young men were off at
+the front; a few grey beards aided by some women comprised his working
+staff.
+
+"I have no American hardware in stock," he said, "but I may be able to
+get you some English or Swiss goods." This did not appeal to the young
+American. He is now making a study of Russian finance.
+
+Full brother to this episode is the experience of another American in
+Paris who found out that there was great need among French women for
+curling irons. Despite war, sacrifice and sudden death, the French woman
+is determined to look her best. Besides, she is earning more money than
+ever before and buying more luxuries. Knowing these facts, the Yankee
+sent the following cable to a well known concern in the Middle West:
+
+"Rush fifty thousand dollars' worth of curling irons. Cable acceptance."
+He also cabled his financial references which would have started a bank.
+
+He, too, was doomed to disappointment. After a fortnight came the usual
+letter from America containing the now familiar phrase: "See Blank
+Blank, our Paris representative. He may be able to take care of you."
+
+Manfully he went to see Monsieur Blank Blank, who not only had no
+curling irons but refused to display the slightest interest in them.
+
+Still another American took an order for some kid skins, intended for
+the manufacture of fine shoe uppers. By the terms of the agreement they
+were to be three feet in width. The money for them amounting to $30,000
+was deposited in a New York bank before shipment.
+
+When the skins reached Paris they were found to be heavy, coarse leather
+and measuring five feet in width. They were absolutely useless for the
+desired purpose. The average French buyer, however, is not a welcher. He
+accepted the undesirable stuff, but with a comment in French that,
+translated into the frankest American, means, "Never again!"
+
+All this oversight is aided and abetted by a twin evil, a lack of
+knowledge of the French language. Here you touch one of the chief
+obstacles in the way of our foreign business expansion everywhere. It
+has put the American salesman at the mercy of the interpreter, and since
+most interpreters are crooks, you can readily see the handicap under
+which the helpless commercial scout labours. A concrete episode will
+show what it costs:
+
+A certain American firm, desirous of establishing a more or less
+permanent connection in France, sent over one of its principal officers.
+This man could not speak a word of French, so he secured the services of
+a so-called "interpreter guide." It was proposed to select a
+representative for the company from among a number of firms in a certain
+large French seaport. The firm chosen was to receive and pay for
+consignments through a local bank and act generally for the American
+company.
+
+Friend "interpreter guide" said he knew all the big business houses in
+the city, so he selected a firm which the American accepted without
+making the slightest investigation. A bank agreed to take care of the
+shipments and the whole transaction was quickly concluded. The American
+grabbed the papers in the case (and I might add without the formality of
+having them examined by a third party) and left France immensely
+impressed with the ease and swiftness with which business could be
+transacted with that country.
+
+But there was an unexpected and unfortunate sequel to this performance.
+A few months later another officer of this American company came
+post-haste to France to straighten out an ugly tangle. It developed that
+the French firm chosen by the "interpreter guide" was not of the highest
+standing: that the interpreter, for reasons and profits best known to
+himself, had entirely misrepresented the conversation, that instead of
+paying four per cent for services, the American firm was really paying
+about ten. The whole transaction had to be called off and a new one
+instituted at considerable expense of time and money.
+
+Another American came to Paris without knowing the language, used an
+interpreter every day for nine weeks, and was unable to place a single
+order. Yet in this time he spent enough money on his language
+intermediary to pay the rent of a suitable office in Paris for a whole
+year.
+
+The dependence of Americans with important interests or commissions upon
+interpreters is well nigh incredible. On the steamer that took me to
+France last summer was the new Continental Manager of a large American
+manufacturing company. I assumed, of course, that he could speak French.
+A few days after I arrived in Paris I met him in the Boulevard des
+Italiens in the grip of a five franc a day interpreter. He told me with
+great enthusiasm that an interpreter was "the greatest institution in
+the world." In six months he will probably reverse his opinion.
+
+The lesson of this lack of knowledge of French as applied to
+salesmanship is this: That while the average Frenchman is greatly
+flattered when you tell him that his English is good, he prefers to talk
+business in his own vernacular. He thinks and calculates better in
+French. Frequently when you engage him in conversation in English and
+the question of business comes up, you find that he instinctively lapses
+into his mother tongue.
+
+I was talking one day with Monsieur Ribot, the French Minister of
+Finance, whose English is almost above reproach, and who maintained the
+integrity of his English through a long conversation. But the moment I
+asked him a question about the proposed bond issue, he shifted into
+French and kept that key until every financial rock had been passed.
+
+In short, you find that if you want to do business in France, you must
+know the French language. It is one of the keys to an understanding of
+the French temperament.
+
+Even when Americans do become energetic in France, they sometimes fail
+to fortify themselves with important facts before entering into hard and
+fast transactions. As usual, they pay dearly for such omissions. This
+brings us to what might be called The Great American Deluge which
+overwhelmed not a few Yankee pocketbooks and left their owners sadder
+and saner.
+
+Fully to understand this series of events, you must know that since the
+beginning of the war the question of an adequate French coal supply has
+been acute. Indeed, for a while the country faced a real crisis. Many of
+her mines are in the hands of the Germans and she was forced to turn to
+England for help. Not only has the English price risen, but to it must
+be added the high cost of transportation, the heavy war risk, and all
+those other details that enter into such negotiations.
+
+France had to have coal and various enterprising Americans got on the
+job. At least, they thought they were enterprising. Before they got
+through, they wished that they had not been so headlong as the following
+tale, now to be unfolded, will indicate.
+
+A group of New York men made a contract to deliver three shiploads of
+coal at Bordeaux at a certain price. _After_ they had signed the
+contract, freight rates from Baltimore to the French port almost
+doubled. This was the first of their troubles. When their vessel finally
+reached Bordeaux, the dock was so crowded with ships unloading war
+munitions that they could not get pier space. In France demurrage begins
+the moment a ship stops outside of port. The net result was that these
+vessels were held up for nearly two weeks and the high price of
+transportation coupled with the very large demurrage practically wiped
+out all the profits.
+
+Another group of Americans made a contract to deliver coal to a French
+railway "subject to call." Without taking the trouble to inquire just
+what "subject to call" meant in France, they signed and sealed the
+bargain. Then they discovered that the railroad wanted the coal
+delivered in irregular instalments. Meanwhile the consignors had to
+store the coal in French yards where space to-day is almost as valuable
+as a corner lot on Broadway. They were glad to pay a cash bonus and
+escape with their skin.
+
+Still another group made a contract with the Paris Gas Company for a
+large quantity of coal. They discovered later that the company expected
+the coal to be delivered to their bins in Paris.
+
+"But the American plan is to sell coal f.o.b. Norfolk," said the
+spokesman.
+
+"We are sorry," replied the Frenchmen, "but the coal must be delivered
+to us in Paris. The English have been doing it for forty years, and if
+you expect to do business with us you must do likewise."
+
+When the Americans demurred the company held them to their contract.
+
+This last episode shows one of the great defects in the American system
+of doing business abroad. We insist upon the f.o.b. arrangement, that
+is, the price at the American point of shipment. The foreigner, and
+especially the Frenchman, wants a c.i.f. price which includes cost,
+insurance and freight and which puts the article down at his door. The
+German and English shippers, and particularly the former, have made this
+kind of shipment part of their export creed, and it is one reason why
+they have succeeded so wonderfully in the foreign field.
+
+The Great American Coal Deluge also precipitated a flood of miserable
+titled ladies all selling coal for "well known American companies." Most
+of them were clever American women, married, or thinking they were
+married, to Italian or French noblemen. Their chief effort was to get a
+cash advance payment to bind the contract. Such details as price,
+transportation, credit, and other essentials were unimportant.
+
+Here is a little story which shows how these women did business and
+undid American good will.
+
+One day last August, the telephone rang in the office of the General
+Manager of a long established American concern in Paris. A woman was at
+the other end.
+
+"Is this Mr. Blank?"
+
+"Yes."
+
+"I am Countess A. and I have a letter of introduction for you."
+
+"Yes."
+
+"I represent several large American coal companies and have secured a
+large order for Italy."
+
+"Yes."
+
+"Can you tell me how I can get the coal to Italy?"
+
+"Yes."
+
+"Splendid! But how?"
+
+"By boats."
+
+"Oh, yes, I know, but have you got the boats and can I get them? I have
+the order, you see, and that is the main thing."
+
+"But, madam," asked the man, "have you cabled your company in America
+about the contract?"
+
+"No," answered the woman. "What's the use of doing that. I have no money
+to spend on cables. Besides, I have full power to act. The price is all
+right and the buyers are ready to sign but they want to put into the
+agreement some silly business about delivery and I am asking you to help
+me get the boats."
+
+"Come and see me," said the Manager.
+
+The woman promised to call the next morning, but she never came. Just
+what she had in mind the Manager could never quite tell. But one thing
+was proved in this and similar activities: The "Countess" and most of
+her sisters who have been trying to put over coal and other contracts in
+Paris, have little or no real authorisation for their performances, and
+the principal result has been to prejudice French and Italian buyers
+against us.
+
+In seeking to make French contracts, some of these adventurers (and they
+include both sexes) make the most extravagant claims. One group
+circulated a really startling prospectus. At the top was the imposing
+name of the corporation with a long list of branches in every part of
+the world. Then followed a list of names of individuals and firms with
+their assets supposed to be part and parcel of the corporation. One man
+whose name I had never heard before and who was set down as a
+Pittsburgher, was accredited with assets of $250,000,000. Under other
+individual and firm resources ranged from one to twenty-five million.
+The list included the name of a great American retail merchant, without
+his consent I might add, but the promoters had cunningly misspelled his
+name, which kept them within the pale of the law. The total assets of
+these "concerns personally responsible for all orders entrusted" was
+precisely $340,000,000. In spite of this dazzling array of
+misinformation, let it be said to the credit of the French buyer that he
+failed to fall for the glittering bait.
+
+The more you go into the reasons why so many of our business men have
+failed in France, the more you find out that plain everyday business
+organisation seems to be conspicuously absent. Take, for example, the
+question of credit. The average American doing business in France
+proceeds in the assumption that every Frenchman is dishonest. This being
+his theory, he either exacts cash in advance or sells "cash against
+documents." Such a procedure galls the Frenchman who is accustomed to
+long credit from English, German, Swiss and Spanish manufacturers and
+merchants.
+
+Of course, behind all these American errors in judgment and tact is a
+lack of organised credit information. To illustrate:
+
+When I was in London, the English Managing Director of one of the
+greatest of Wall Street Banks received an inquiry from his home office
+for information about the Compagnie Generale Transatlantique (the French
+Line). The amazing thing was that this bank, that prides itself on its
+world-wide information, had no data regarding the leading steamship line
+between England and France. You may be sure that the Credit Lyonnais or
+any other French banking institution has a complete record of the
+American Line.
+
+Not long ago, one of the largest banks in Chicago refused to extend
+credit to a French concern, although the French Government backed up the
+purchase. This concern had occasionally done business with a New York
+Trust Company in the Rue de la Paix, whose French Manager was a live,
+virile, far-seeing young American. The President of the French Company
+laid his case before him. Quick as a flash he said:
+
+"All right! If they won't guarantee it, I will, and on my own
+responsibility."
+
+Whereupon he put the deal through. It was the kind of swift, dramatic
+performance that appeals to the Frenchman. The net result was that the
+service has come back a hundredfold to the Trust Company.
+
+The idea prevailing in America that French firms are not worthy of
+credit is a matter of great surprise all over Europe. Here is the way an
+Englishman whose firm has done business in France for fifty years, sized
+up the situation:
+
+"There are no better contracts in the world than those entered into in
+France. Americans who have had little experience in such matters may
+find the negotiations leading up to the signing of a French contract
+somewhat tedious, but we do not mind this and one is so completely
+protected by the laws of the country, that losses are almost unknown.
+
+"Not long ago we had a case in point. A purchaser of lathes who had
+already made an advance payment, received his machines and then by
+various excuses put off the final payments for the remainder from week
+to week. We waited four weeks and then made our complaint to the judge
+at the tribunal. Two days later the judge ordered the delinquent firm
+to pay up in full and we received our money the very same day. How long
+do you think a New York court would have taken to decide a simple
+question of business of this kind? The fact is that in spite of the war,
+French credit remains to-day as good as any you can find."
+
+On top of their resentment over our lack of confidence in their credit
+is the added feeling which has cropped up since the beginning of the war
+over the way American manufacturers have ignored many of their French
+contracts. A French manufacturer summed it up in this way:
+
+"There is no doubt that some American manufacturers who had signed
+contracts for the delivery of machinery in France, deliberately sold
+these machines at home at higher prices. It has created a very bad
+impression and I am afraid that henceforth your salesmen will find it
+much harder to operate in my country.
+
+"The trouble is that Americans have been spoiled by too many orders.
+Before the war they were all crying out for business. Now that they have
+everything their own way, they have become independent and arrogant.
+With the ending of the war, all this will change, for the French are not
+likely to forget some of the bitter lessons they have learned.
+Henceforth they will profit by them."
+
+One reason for our laxity all up and down the French business line is
+that the American has never taken the French export business any too
+seriously. On the other hand, stern necessity has been the driving force
+behind the English and German manufacturer. The American, too, has made
+the great mistake of assuming that the foreigner, and especially the
+Frenchman, is not always serious-minded and to be depended upon. If he
+wants his mind disabused in this matter, let me suggest that he see him
+at war. He will realise that the superb spirit of aggression and
+organisation that mark him now is bound to last when peace comes.
+
+You must not get the impression from this long list of American business
+calamity that all our endeavour has failed in France. Those few great
+American corporations who have planted the flag of our commercial
+enterprise wherever the trade winds blow, have long and successfully
+held up their end throughout the Republic. So, too, with some
+individuals. The story of what one New Yorker did is an inspiring and
+perhaps helpful lesson in the right way to do business in France.
+
+This man is resolute and resourceful: he speaks French fluently and he
+was familiar with the foreign trade field. With the outbreak of war he
+did not lose his head and try to get business indiscriminately. Instead,
+he made a careful survey of the field; he did not listen to the optimist
+who said it would be a short war: his instinct told him, on the
+contrary, that it would be a long one. "What will France need more than
+anything else?" he asked himself.
+
+He realised that most of all France would need machine tools. He got the
+cables busy assembling goods, and by every known route he brought them
+to France. When he had a warehouse full of material, he began to sell.
+He not only had what the French were hungering for, but he had them to
+deliver overnight. While his colleagues were frantically trying to get
+their stuff in, he was getting all the business. The French like the
+man who makes good.
+
+This man met their expectations and to-day he stands at the top of the
+selling heap.
+
+More than this, he is building a factory on the outskirts of Paris where
+he will make and assemble his product. Ask him the reason why he is
+doing this, and he will tell you:
+
+"First, it means good will; second, we will get the benefit of native
+and cheap labour; third, we will be able to replace parts at once; and,
+fourth, we will get inside the wall of the Economic Alliance."
+
+
+
+
+IV--_The New France_
+
+
+No matter how we heed the example of the few progressive Americans who
+have successfully planted their business interests in France, we will
+face a new handicap when the war ends. As in England, we will be bang up
+against an industrial awakening that will mark an epoch. Coupled with
+this revival will be an efficiency born of the war needs that will act
+as a tremendous speeder-up.
+
+In France this galvanised industrial life will be stimulated by a
+brilliant imagination wholly lacking in the English temperament. It will
+go a long way toward opening up fresh fields of labour and distribution.
+
+Self-sufficiency will be the keynote. The automobile is a striking
+instance. We had established a very promising motor market (and
+especially with moderate-and low-priced cars) among the French. When the
+Government assumed control of the French automobile factories and
+changed their output to war munitions, the two great automobile
+syndicates protested that the cutting off of the French motor supply
+would mean an immense loss of good will. First came a 70 per cent duty
+on practically all American cars and this was followed up by an almost
+complete restriction of all American cars.
+
+This prohibition will have the same effect as the English exclusion in
+that it will stimulate the demand for the native French cars. Here we
+get to one of the striking phases of the new industrial development of
+immense concern to us. France has her eye on quantity output. Many signs
+point to it.
+
+When the war broke out, a certain young French engineer saw great
+opportunity in shell making. He was immuned from military service, he
+had a little capital of his own, and with Government aid he set to work.
+Within four months he had built an enormous plant on the banks of the
+Seine almost within the shadow of the Eiffel Tower. In six months he had
+enlarged his capacity so that he was producing 15,000 shells a day. Last
+summer he sent for the agent of a large American machinery company: "I
+am going to make automobiles in series after the war." "In series" is
+the French way of expressing quantity output.
+
+"All right," said the American. "What can I do for you?"
+
+"Simply this," said the Frenchman. "I wish to order sufficient
+automatics to meet the demand when peace comes."
+
+This is the spirit of the awakened French industry. I know of half a
+dozen automobile and other producing establishments who are making plans
+to manufacture popular-priced cars when the war is over. This output
+will not only affect the sale of American cars in France, but will also
+interfere with the market for our cheap machines in South America.
+Already France is making every effort to increase her Latin-American
+trade. She has immense sums of money invested in Brazil and she will
+follow up this advantage keenly.
+
+It is important for us to remember that France like England will have a
+well oiled productive machine after the war. It will not only be better
+but bigger than ever before. The German ill wind that devastated the
+northern section will blow good in the end. Hundreds of factories
+operated by hand labour before the war will now be equipped with
+American labour-saving machinery. The products of these machines
+operated by cheap labour will be in competition with our own commodities
+manufactured by more expensive labour in many of the markets of the
+world.
+
+Formerly the French artisan could produce an article almost from raw
+material to finished product: now he has learned to stand at an
+automatic and labour at a single part. In short, he is becoming a
+specialist which makes him a cog in the machine of quantity output.
+
+What is true of machines and men is also true of money. The old wariness
+of the French banker in underwriting industry is passing away. He is
+thinking in terms of large figures and vast projects.
+
+I could cite many examples of the new Gospel of French Self-Supply.
+Before the war France manufactured lathes that were beautiful examples
+of art and precision. The firms that made them were old and solid and
+took infinite pride in their product. Now they realise that output must
+dominate. A simple type of machine has been chosen as model and will
+henceforth be made in large quantities.
+
+Then there is the sewing machine. Before the war two
+groups--Anglo-American and German--controlled the French market. By the
+ingenious use of export premiums, the Germans had the best of it.
+
+"Why always pay tribute to strangers?" now asks the French housewife. So
+far as Germany is concerned, this question is already settled. But the
+American sewing machine will have to struggle for its existence
+hereafter in France, for plans have been made for at least three huge
+factories for its production.
+
+Striking evidence of the growing French industrial independence of
+Germany is her advance in crucible making. For years Sevres vied with
+Limoges for ceramic honours. To-day the vast plant which once produced
+the most exquisite and delicate ware in the world is now producing the
+less lovely but more serviceable crucibles, condensers and retorts
+necessary for the distillation of the powerful acid used in modern high
+explosives. Previous to the war, the Central Empire had a monopoly on
+this market. Indeed, much of the pottery and glassware used in
+laboratories and chemical factories was made in Bohemia and marketed by
+Germany. Now the Sevres plant is shipping these goods to England and
+Russia.
+
+So, too, with dye stuffs. A whole new French colouring industry is being
+created. A Societe d'Etude has been formed to make a scientific survey
+and this will be replaced by a National Company to undertake the
+manufacture of all coal tar products.
+
+The use of a certain number of new war factories has been guaranteed to
+the company by the Minister of War. Typical of the purpose which will
+animate the enterprise is one of the articles of the National Company
+which provides that the Director of the Dye Stuff Industry must be of
+French birth. An agreement has also been made with England and Italy to
+protect the colour output of the three countries with a high tariff
+after the war. Here you find one tangible evidence of the working out of
+the Paris Economic Pact.
+
+Even while the invader's hand still lies heavy upon the land, France
+looks ahead to reconstruction. Last summer Paris flocked to a graphic
+exhibition of how to rebuild a destroyed city. It was called La Cite
+Reconstitue, and was held in the Tuileries Garden. Here you could see
+the modern way of making a Phoenix rise quickly out of the ashes. There
+were model schoolhouses, churches, factories, and cottages, all with
+standardised parts which could be thrown together in an almost
+incredibly short time.
+
+With Self-Sufficiency has come a desire for new business knowledge. Not
+long ago an American business man who has lived in Paris for many years,
+received a letter from a young French friend in the trenches at Verdun.
+The soldier wrote:
+
+"I realise that when this war is over we must be better equipped than
+ever before to meet world business competition. I want to be a better
+salesman. Please send me some books on American salesmanship and also
+some of the American trade papers. I have begun the study of Spanish
+because I believe we are going to have our part in the Latin-American
+trade." Here was a young Frenchman risking his life every moment in one
+of the greatest battles the world has ever known: yet in the midst of
+death he was looking forward to a new business life.
+
+The whole attitude of the Frenchman toward life has undergone a change,
+first under the stress of ruthless war, and under the spur of his
+kindling desire for rehabilitation. Formerly, for example, the French
+loathed to travel. When he knew he was going away on a journey, he spent
+a month telling his relatives good-bye. Now he packs his bag and is off
+in an hour to Lyon, Marseilles, Bordeaux, or any other place where
+business might dictate.
+
+The new and efficient French industrial machine is not the only factor
+that American business in France must reckon with after the war. The
+French woman is fast becoming a force, thus setting up an altogether
+unequal and almost unfair competition, because to shrewd wit and
+resource is added the power of sex and beauty.
+
+In France, as most people know, the woman exerts an enormous influence,
+regardless of her social class. In all regulated bourgeois families the
+wife holds the purse strings; in the small shops she keeps the cash and
+runs things generally. No average Frenchman would think of embarking on
+any sort of enterprise without first talking it over with his _femme_,
+who is also his partner. This team work lies at the root of all French
+thrift.
+
+The woman of the lower class has met the grim emergency of war with
+sacrifice and courage. Not only has she faced the loss of those most
+dear with uncomplaining lips, but she has taken her man's place
+everywhere. You can see her standing Amazon-like in leather apron
+pouring molten metal in the shell factory; she drives you in a cab or a
+taxi; she runs the train and takes the tickets in the Underground: in
+short, she has become a whole new asset in the human wealth of the
+nation and as such she will help to make up for the inevitable shortage
+of men.
+
+Her sister of the upper class, at once the most practical and most
+feminine of her sex, is also doing her bit. She is the lovely thorn in
+the path of the American business promoter in France.
+
+Before the war, it was rare to find this type of woman competing with
+men in outside business affairs, although her influence has always
+counted immensely in official life where she pulls the strings to get
+husband or lover Government preferment or concession.
+
+Since the war, however, necessity has sharply developed her latent
+business qualities. Now it is not unusual to find her in direct
+competition, using all those delightful charms with which Nature has
+endowed her. This is especially true of widows and women whose husbands
+are at the front. They often rely more upon persuasion than upon any
+technical or practical knowledge. One reason why they succeed is their
+almost uncanny knowledge of men. And this often enables them to grasp
+swiftly the clue that business opportunity offers.
+
+One night at dinner a Colonel's widow, a gracious and beguiling lady,
+heard that the French Government was in the market for 50,000 head of
+cattle. The next morning she sent half a dozen cables to South America,
+got options, and in three days her formal bid was at the War Office.
+Within a week she had the contract.
+
+I know of a case of the wife of a Colonel at the front, who heard one
+day at lunch that the War Office needed 50,000 sacks of flour for the
+army at Saloniki. That same day she put the matter before some American
+brokers in Paris, who wired to their New York firm and received the
+usual American reply: "Am not interested in the French trade now. Will
+wait until after the war."
+
+With the utmost difficulty the woman was able to secure 10,000 sacks by
+way of Italy and Switzerland. She is not likely to seek American sources
+of supply soon again.
+
+An American got a tip one day that a certain contract for machine tools
+was available. He had an appointment for lunch, so he said to himself:
+"Why hurry? These French people are slow. I'll get busy this afternoon
+or to-morrow."
+
+When he went to the establishment in question the next day, he found
+that an exquisitely gowned woman had just preceded him; indeed, the
+fragrance of the perfume she used still hovered about the outer office.
+The man cooled his heels for half an hour when the lovely feminine
+vision flashed by him going out. He started to make his selling talk to
+the Purchasing Agent, who said, at the first opening:
+
+"I am extremely sorry, Monsieur, but we have just closed the contract
+with Madam Blank who left a few moments ago."
+
+The New France has brought forth a New Woman!
+
+Through all the organised approach to Self-Sufficiency and Economic
+Rehabilitation, France has not lost sight of her grudge against the
+Germans. Indeed, no phase of her business life to-day is more
+picturesque than the campaign now in full swing not only against
+Teutonic trade, but against any resumption of commercial relation with
+the hated enemy across the Rhine. Right here you get a striking
+difference between English and French methods. While Britain takes out
+some of her enmity against German trade in eloquent conversation, France
+has gone about it in a practical way, shot through with all the colour
+and imagination that only the French could employ upon such procedure.
+
+Preliminary to this campaign was a characteristic episode. Almost with
+the flareup of war, the French mind turned sentimentally to those
+fateful early Seventies when Germany in the flush of her great victory
+seized the fruits of that triumph. Some of those fruits were embodied
+in the famous Treaty of Frankfort in which the Teuton clamped the mailed
+fist down on every favoured French trade relation.
+
+The war automatically annulled this treaty, and although the nation was
+in the first throes of a struggle that threatened existence, it
+celebrated the revocation in characteristic fashion. Millions of copies
+of the Frankfort Treaty were printed and sold on the streets of Paris
+and elsewhere. The excited Frenchman rushed up and down brandishing his
+copy and saying: "Now we will ram this treaty down the throat of the
+Boche!"
+
+This emotional prelude was now followed by a definite crusade for the
+elimination of German goods. Anti-German societies were formed all over
+the country. Backing these up are dozens of other formidable
+organisations, such as Chambers of Commerce and Business Clubs. Typical
+of the campaign is the formation of a Buyers' League which is intended
+to assemble all persons who will take a resolution never to buy a German
+product and be satisfied for the remainder of their lives with the
+French manufactured article.
+
+Wherever you go in France, you find some concrete and striking evidence
+of the Anti-German wave. When you get a bundle from a Paris shop, you
+are likely to find stuck on it a brilliantly coloured stamp showing a
+pair of bloody hands holding a number of packages, the largest one
+labeled "made in Germany." Under it is the sentence in French reading:
+"Frenchmen, do not buy German products. The hands that made are reddened
+with the blood of our soldiers."
+
+There is great variety in these stamps, which are used on letters and
+packages. One of the most popular shows a helmeted German with a brutal
+face holding a smiling mask before his visage. In one hand he holds a
+bundle marked "Made in Germany." On this stamp is the inscription:
+"Mistrust their smiles--in every German there is a spy."
+
+Still another and equally popular stamp pictures a soldier with bandaged
+head standing by a prostrate comrade and pointing to a fleeing German.
+The inscription reads: "We chase the Germans during the war. You,
+civilians, will you allow them to return after peace?"
+
+One stamp used much throughout the Provincial French cities shows a
+woman in deep mourning weeping over a grave marked with a cross
+surmounted by a red soldier cap. The woman is supposed to be saying
+these words: "French people, buy no more German products. Remember this
+grave."
+
+A companion stamp shows a figure representing the French Republic and
+holding the tri-colour. The flag is attached to a spear with which she
+is piercing the breast of a German eagle on the ground. At her side is
+the national bird of France, the Cock, crowing triumphantly. Underneath
+are the words: "Refuse all German products."
+
+Similar in idea is another dramatic conception showing a white robed
+female figure holding a battle axe in one hand and pointing with the
+other to a burning cathedral. Her words are: "Frenchmen, do not consume
+any German products. Remember 1914."
+
+Most of the large French cities have their own Anti-German stamps which
+are enlarged and used on billboards as posters. A typical city stamp is
+that of Lyon, which shows a Cock in brilliant colours standing proudly
+in the red and blue rays of a white sun. Attached is the legend:
+"National League of Defence of French Interests--The Anti-German League:
+Buy French Products."
+
+The City of Marseilles has a stamp showing the French Cock standing on a
+German helmet surrounded by the words "Anti-German League." Elsewhere on
+the stamp is the inscription: "No more of the people--No more German
+products."
+
+Whether the Frenchman buys or sells, he has poked under his nose or
+flaunted before his eyes every hour of the business day some concrete
+evidence that his country has put the German people and their products
+under the ban.
+
+In connection with this campaign are some facts of utmost significance
+to the American business man who has studied the intent and purpose of
+the Paris Economic Pact which is described in a previous chapter, and
+which declared for an Allied war of economic reprisal against Germany
+and the other Central Powers. In that chapter, as you may recall, the
+point was made that since individuals and not nations do business, the
+Pact was likely to fail.
+
+With their usual intelligence, the French understand this, and their
+whole educational campaign at home is to make the individual Frenchman
+immune against the lure of the cheap German products. The French know
+that it is the sum of individual French resistance to German buying that
+will keep the German product forever outside the realm of the Republic.
+
+Indeed, the clearest-minded men in France to-day believe that more
+commercial advantage will accrue to France by the intensive development
+of her resources, the perfection of old industries and the creation of
+new ones than in the formation of committees devoted to plans for
+commercial alliances dedicated to reprisal. In other words, this helps
+to bear out the theory held in many quarters that the economic pact is
+after all merely a campaign document and utterly impracticable.
+
+In France there are other signs that point to a rift in the Pact. While
+I was in Paris, a well known Senator pointed out that as soon as the
+war ended France would need coal and would look to Italy for it as she
+had done in the past. To obtain her coal more cheaply than she is now
+doing from the United States or England, Italy would very likely make
+concessions to Germany in order to obtain German fuel. The result would
+be an interchange of merchandise between the two countries regardless of
+the decree of the Paris Pact. The question arises: Could France place
+restrictions upon the Italian frontier to the annoyance of her Allies?
+
+Meanwhile France is seeking immunity from any future coal crisis by
+developing a system of hydraulic power which will not only be
+economical, but will also help to cut down her imports. It is just one
+more phase of the ever-widening programme of Self-Sufficiency.
+
+Despite our past blunders, our present lack of organised initiative, and
+the efforts toward Self-Supply, the future holds a large business
+opportunity for America in France. As a matter of fact, half of the
+selling work is already registered because the French are eager and
+anxious to do business with their great sister democracy across the
+sea. It is, therefore, up to the American exporter to capitalise the
+needs of the nation and the good will that it bears toward us. But it
+must be done now.
+
+For one thing, it cannot be achieved without constructive co-operative
+work. Groups of exporters must organise and establish offices in Paris
+and elsewhere in France. The reason for this is that the Frenchman
+abhors the fly-by-night salesman: he likes to feel that the man with
+whom he is trading has taken some sort of root in his midst.
+
+With organisation must come knowledge. Why did the Germans succeed so
+amazingly in France? Geographical proximity and the Frankfort Treaty
+helped some, but the principal selling power he wielded was that he
+lived with his clients, found out what they wanted, and gave it to them.
+If a French farmer, for example, wanted a purple plough share fastened
+to a yellow body, the German assumed that he knew what he wanted and
+made it for him. The average American exporter, on the other hand, has
+always assumed that the foreign customer had to take what was given to
+him. For this reason we have failed in South America and for this
+reason we will fail in France unless we change our methods. Knowledge is
+selling power.
+
+We must be prepared to give the French long credits, and if necessary,
+finance French enterprises. Despite her immense gold hoardings, she may
+feel an economic pinch after the war. We must also have sound and
+organised French credit information.
+
+Our salesmen must know the French language and sympathise with the
+French temperament. Give the French buyer a ghost of a chance and he
+will meet you more than half way. Unlike the stolid Englishman he is
+plastic, adaptable and imaginative. Understanding is a large part of the
+trade battle.
+
+We must accumulate large stocks of American goods in France to indulge
+the purchaser in his favourite occupation of long and elaborate choosing
+and to meet demands for renewal. To ship these goods we must have our
+own bottoms. Here, as elsewhere in the whole export outlook, is the old
+need of a merchant marine.
+
+But we will never realise our trade destiny in France without
+reciprocity. We cannot sell without buying. France looks to us to take
+part of the huge flood of goods that once went to Germany. We take some
+of her wine: we must take more. We buy her silks and frocks: the
+American market for them must now be widened. We depended upon Germany
+for many of our toys: France expects the Anglo-Saxon nursery henceforth
+to rattle with the mechanical devices which will provide meat and drink
+for her maimed soldiers. And so on down a long list of commodities.
+
+All this means that before the mood cools we must conclude new
+commercial treaties with France and assure for ourselves a really
+favoured nation relation that carries the guarantee of a permanent
+foreign trade now so necessary to our permanent prosperity.
+
+In the last analysis you will find that it is France and not England to
+whom we must look for the larger commercial kinship after the war. The
+spirit of the awakened Britain, so far as we are concerned, is the
+spirit of militant trade conquest: the dominant desire of the speeded-up
+France is benevolent Self-Sufficiency.
+
+Whether England realises her vast dream remains to be seen. But one
+thing is certain: No man can watch France in the supreme Test of War
+without catching the thrill of her heroic endeavour, or feeling the
+influence of that immense and unconquerable serenity with which she has
+faced Triumph and Disaster. They proclaim the deathlessness of her
+democracy, the hope of a new world leadership in art and craft.
+
+She will be a worthy trade ally.
+
+
+
+
+V--_Saving for Victory_
+
+
+By making patriotism profitable, England has enlisted an Army of Savers
+and launched the greatest of all Campaigns of Conservation. No contrast
+in the greatest of all conflicts is so marked as this flowering of
+thrift amid the ruins of a mighty extravagance. The story of Britain's
+"Economy First" campaign is a chapter of regeneration through
+destruction that is full of interest and significance for every man,
+woman, and child in the United States. Through self-denial a complete
+revolution in national habits has begun. Out of colossal evil has come
+some good.
+
+It has taken a desperate disease to invoke a desperate remedy. The
+average American, firm in his belief that he holds a monopoly on world
+waste, has had, almost without his knowledge, a formidable rival in
+England these past years. Whether the visiting Yankee tourist helped to
+set the pace or not, the fact remains that when the war broke over
+England she was as extravagant as she was unprepared.
+
+The Englishman, like his American brother, though unlike the Scotch, is
+not thrifty by instinct. He regards thrift as a vice. He prefers to let
+the tax gatherer do his saving for him. He believes with his great
+compatriot Gladstone that "it is more difficult to save a shilling than
+to spend a million."
+
+Contrasting the Englishman and the Frenchman in the matter of economy,
+you find this interesting parallel: With the Frenchman the first
+question that attends income is "How much can I _save_?" Saving is the
+supreme thing. With the Briton, however, it becomes a matter of "How
+much can I _spend_?" Saving is incidental.
+
+To associate thrift with the British workingman is to conceive a
+miracle. To be sure, he seldom had anything to save before the war. But
+with the speeding-up of industry to meet the insatiate hunger for
+munitions and the corresponding increase of from thirty to fifty per
+cent, even more, in wages, he suddenly began to revel in a wealth that
+he never dreamed was possible. The more he made the more he spent. He
+squandered his financial substance on fine cigars, expensive clothes,
+and excessive drinks, while his wife bedecked herself in gaudy finery
+and installed pianos or phonographs in her house. No one thought of
+To-morrow.
+
+Just as it took the shock of a long succession of military reverses to
+rouse the English mind to the consciousness that the war would be long
+and bitter, so did the abuse of all this temporary and inflated war time
+prosperity bring to far-seeing men throughout England the realisation
+that the British people, and more especially those who worked with their
+hands, were booked for serious social and economic trouble when peace
+came, unless they saw the error of their wasteful ways.
+
+"What can we do to stem this tide of extravagance and at the same time
+plant the seed of permanent thrift," asked these men who ranged from
+Premier to Prelate. No one knew better than they the difficulties of the
+task before them. In England, as in America, thrift is more regarded as
+a vice than a virtue. Like the taste for olives it is an acquired
+thing. To spend, not to save, is the instinct of the race.
+
+But there were other and equally serious reasons why all England should
+buck up financially and make every penny do more than its duty. First
+and foremost was the terrific cost of the war that every day took its
+toll of $25,000,000; second was the enormous increase in imports and the
+diminished flow of exports, a reversal of pre-war conditions that meant
+that England each day was buying $5,000,000 worth of goods more than
+other countries were purchasing from her; third was the human shrinkage
+due to the incessant demand of battlefield and factory. Everywhere was
+colossal expenditure of men and money: nowhere existed check or
+restraint. Something had to be done.
+
+It was generally admitted that the first thing for everybody to do was
+to spend less on themselves than in times of peace. When, where and how
+to save became the great question. To save money at the cost of
+efficiency for essential and urgent work was not true economy. "But,"
+said the thrift promoters, "waste is possible even in the process of
+attaining efficiency. For example, people may eat too much as well as
+too little, they may buy more clothes than they actually need, ride when
+they could walk, employ a servant when they could do their own work, use
+their motors when they could travel in a tram."
+
+Thus every class came within the range of the lightning that was about
+to strike at the root of an ancient evil.
+
+The start was interesting. Before the war was a year old definite order
+emerged of what was at the beginning a scattered protest against
+reckless spending. But long before the first organised message of saving
+went to the home and purse of the worker, the rich began to economise.
+Here is where you encounter the first of the many ironies and contrasts
+that mark this whole campaign. The people who could most afford to be
+extravagant were the first to draw in their horns. This, of course, was
+not particularly surprising because the rich are naturally thrifty. It
+is one reason why they get and stay rich.
+
+Among the pioneer organisations was the Women's War Economy League
+founded and developed by a group of titled women who got hundreds of
+their sisters to pledge themselves to give up unnecessary entertaining,
+not to employ men servants unless ineligible for military service, to
+buy no new motor cars and use their old ones for public or charitable
+work, to buy as few expensive articles of clothing as possible, to
+reduce in every way their expenditures on imported goods, and to limit
+the buying of everything that came under the category of luxuries.
+Champagne was banned from the dinner table, decollete gowns disappeared:
+men substituted black for white waistcoats in the evening.
+
+The rich really needed no organised stimulus to retrench. The great
+target for attack was the mass of the population who did not know what
+it meant to save and who required just the sort of constructive lesson
+that an organised thrift movement could teach.
+
+Much of the increase in wages among the workers was going for food and
+drink. Hence the opening assault was made on the market bill.
+Fortunately, an agency was already in operation. At the outbreak of the
+war a National Food Fund was started to feed the hungry Belgians. That
+work had become more or less automatic (the Belgians' appetite is a
+pretty regular clock), so its machinery was now trained to the twin
+conservation of British stomachs and savings.
+
+"Save the Food of the Nation," was the appeal that went forth on every
+side. "No One is too Rich or Poor to Help. Every man, woman and child in
+the country who wants to serve the state and help win the war can do so
+by giving thought to the question of conserving food. Since the great
+bulk of our food comes from abroad, it takes toll in men, ships and
+money. Every scrap of food wasted means a dead loss to the Nation in
+men, ships and money. If all the food that is now being wasted could be
+saved and properly used it would spare more money, more ships, more men
+for the National defence."
+
+Now began a notable campaign of education which was carried straight
+into the kitchen. Food demonstrators whose work ranged from showing the
+economy of cooking potatoes in their skins to making fire-less cookers
+out of a soap box and a bundle of straw, went up and down the Kingdom
+holding classes. In town halls, schools, village centres and
+drawing-rooms, mistress and maid sat side by side. "Waste nothing," was
+the new watchword.
+
+Backing up the uttered word was a perfect deluge of literature that
+included "Hand Books for House Wives," "Notes on Cooking," "Hints for
+Saving Fuel," "Economy in Food," in fact, dozens of pamphlets all
+showing how to make one scrap of food or a single stick of wood do the
+work of two.
+
+The people behind this movement knew that with waste of food was the
+kindred waste of money. They realised, too, that even the most effective
+preachment for food economy must inevitably be met by the cry,
+"Everybody must eat." With money, on the other hand, there seemed a
+better opportunity to drive home a permanent thrift lesson. So the
+forces that had built the bulwark around the English stomach now set to
+work to rear a rampart about the English pocketbook.
+
+Circumstances played into their hand. The Great War Loan of
+$3,000,000,000 had just been authorised. "Why not make this loan the
+text of a great National thrift lesson and give every working man and
+woman a chance to become a financial partner of the Empire," said the
+saving mentors. It was decided to put part of this loan within the range
+of everybody, that is, to issue it in denominations from five shilling
+scrip pieces up, to sell it through the post office and thus bring the
+new savings bank to the very doors of the people.
+
+Again a machine was needed, and once more as in the case of the food
+campaign one was well oiled and accessible. It was the organisation that
+had raised, by eloquent word and equally stimulating poster and
+pamphlet, the great volunteer army of 3,000,000 men. Just as it had
+drawn soldiers to the fighting colours, so did it now seek to lure the
+savings of the people to the financial standard of the nation.
+
+The Parliamentary Recruiting Committee became the Parliamentary War
+Savings Committee and it loosed a campaign of exploitation such as
+England had never seen before. From newspapers, bill boards and rostrums
+was hurled the injunction to buy the War Loan and help mould the Silver
+Bullet that would crush the Germans. It was literally a "popular loan"
+in that the five shilling short-term vouchers, bought at the post
+office, and which paid 5 per cent, could be exchanged when they had
+grown to five pounds for a share of long-term War Stock paying 41/2 per
+cent. The higher rate of interest was the inducement to begin saving and
+it worked like a charm.
+
+Tribute to the efficacy of this programme is the fact that more than
+1,000,000 English workers purchased the War Loan. Through this procedure
+they learned, what most of them did not know before, that when you put
+money out to work it earns more money. It meant that they had become
+investors and were starting on the road to independence.
+
+But this campaign, admirable as it was in scope and execution, failed in
+its larger purpose of reaching the great mass of the people. While more
+than 1,000,000 workers participated in the loan their holdings really
+comprised but a small percentage of the immense total. The bulk of the
+buying was by banks, corporations, trustees, and wealthy individuals.
+The message, therefore, of permanent thrift combined with a more or
+less continuous investment opportunity for every man still had to be
+delivered. All the while the Empire hungered for money as well as for
+men.
+
+Such was the state of affairs when the Chancellor of the Exchequer
+appointed the Committee on War Loans for the Small Investor. It had two
+definite functions: to raise funds for the national defence and to
+provide through the medium selected some simple and accessible means for
+the employment of the average man's money.
+
+This Committee recommended that an issue be made of Five Per Cent
+Exchequer Bonds in denominations of five, twenty and fifty pounds to be
+sold at all post offices. It was an excellent idea and was immediately
+authorised by the Treasury. The Exchequer Bond became part of the
+swelling flood of British war securities and might have had a
+distinction all its own but for the enterprise and sagacity of one man
+who happened to be a member of this Committee.
+
+That man was Sir Hedley Le Bas. You must know his story before you can
+go into the part that he played in the great drama of British investment
+that is now to be unfolded. A generation ago he was the lustiest lad in
+Jersey, his birthplace. His feats as swimmer were the talk of a race
+inured to the hardships of the sea. After seven years in the Army he
+came to London to make his fortune. From an humble clerical position he
+rose to be head of one of the great book publishing houses in Great
+Britain, employing over 400 salesmen, spending over a quarter of a
+million dollars a year in advertising alone.
+
+Sir Hedley is big of bone, dynamic of personality, more like the alert,
+wideawake American business man than almost any other individual I have
+ever met in England. One day he gave the British publishing business the
+jolt of its long and dignified life by taking a whole page in the _Daily
+Mail_ to advertise a single book. His colleagues said it was
+"unprofessional," that it violated all precedent. Sir Hedley thought to
+the contrary and in vindication of his judgment the book developed into
+a "best seller." That pioneer page in the _Mail_ was the first of many.
+
+Prior to the outbreak of the present war, Sir Hedley had been consulted
+by the then Minister of War as to the most advisable means of getting
+recruits.
+
+"Why don't you advertise?" he asked.
+
+"It's never been done before," replied the Minister.
+
+"Then it's high time to begin," said the hard-headed Jerseyman.
+
+His plan scarcely had time to be considered when the Great War broke.
+Sir Hedley was made a member of the Parliamentary Recruiting Committee
+and with Kitchener helped to face England's huge problem of raising a
+volunteer army. How was it to be done?
+
+Hardly had the new War Chief warmed the chair in his office down in
+Whitehall, than Le Bas came to him with this suggestion: "The quickest
+way to raise the new army is to advertise for men."
+
+Kitchener's huge bulk straightened: he looked surprised: the idea seemed
+unsoldierly, almost unpatriotic. But he knew Le Bas. After a moment's
+hesitancy:
+
+"All right. Go ahead."
+
+Under Le Bas was launched the publicity campaign which no man who
+visited England during its progress will ever forget. This galvanic
+publisher geared all the Forces of Print up to the idea of selling
+Military Service. Instead of books the Merchandise was Men.
+
+The most lureful, colourful and effective posters that artist brain
+could possibly conceive flashed from every bill board in the Kingdom. No
+one could escape them.
+
+It was Le Bas who created the phrase "Your King and Country Need You"
+that went echoing throughout the Kingdom and drew more men to the
+colours perhaps than any other plea of the war.
+
+When the Parliamentary Recruiting Committee became the Parliamentary War
+Savings Committee, Le Bas went with it. Its first job was to sell the
+Great War Loan. The Treasury officials wanted it done in the usual
+dignified British way.
+
+At the first meeting of the Committee, Le Bas objected to this
+procedure. Early the next morning he went around to the house of
+Reginald McKenna, Chancellor of the Exchequer.
+
+"The Chancellor is in his bath," said the footman who opened the door.
+
+"Then I'll wait until he can get a robe on," said Le Bas.
+
+Fifteen minutes later, the man who holds the British purse strings sat
+clad in a dressing gown and listened to the suggestion that
+revolutionised British methods of financial salesmanship.
+
+"If we want to sell the War Loan, Mr. Chancellor," said Sir Hedley, "we
+will have to advertise in a big way. It's a business proposition and we
+must adopt business methods."
+
+"It sounds interesting," said the Chancellor. "Come to my office at ten
+and we will talk it over."
+
+It was then 8:30 o'clock. By the time he met the Chancellor at the
+Treasury he had dictated the whole outline of the advertising campaign.
+The scheme was adopted: the Government spent fifty thousand pounds
+advertising the loan but it sold every penny of it.
+
+This then was the type of man who had sat in the six meetings of War
+Loan for Small Investors and listened to many conventional suggestions.
+He instinctively knew that the Five Pound Exchequer Bond was not a
+sufficient bait to hook the small savings of the great mass of the
+people.
+
+"We've got to make some kind of attractive offer," said Sir Hedley to
+himself. "In fact, we must give the investor something for nothing to
+make him lend his money to the country. A pound note looks big to the
+average Englishman. Why not give him a pound for every fifteen shillings
+and sixpence that he will lay aside for the use of the Nation? In other
+words, why not make patriotism profitable?"
+
+When he laid this plan before the Committee, it was unanimously
+approved. The maxim of "Fifteen and Six for a Pound" was now unfurled to
+the breezes and the super-campaign to corral the British penny was on,
+under the auspices of the National War Savings Committee which now
+superseded all other organisations as the head and front of the National
+Thrift idea.
+
+Although he had a strong selling appeal in the fact that he was giving
+the small British investor something for nothing, Sir Hedley realised
+that his first bid for savings must have the real punch of war in it.
+What was it to be?
+
+He thought a moment and then went over to the War Office where Lloyd
+George had just succeeded the lamented Kitchener.
+
+"What could a man buy for fifteen and six?" he asked the many-sided
+little Welshman who was progressively filling every important job in the
+Empire.
+
+"He could buy six trench bombs," was the reply.
+
+"What else?" queried the publisher.
+
+"He could get 124 cartridges or--"
+
+"That's enough!" exclaimed Le Bas. "I've got it!"
+
+Lloyd George looked a little startled, whereupon his visitor remarked:
+"You have given me just the thing I wanted. Wait until to-morrow and you
+will find out what it is."
+
+The very next day Lloyd George and a great part of the whole British
+Nation knew exactly what Sir Hedley got out of his interview with the
+War Minister, because the first advertisement announcing the new type of
+War Loan read like this:
+
+
+     "ONE HUNDRED AND TWENTY-FOUR CARTRIDGES FOR FIFTEEN AND SIX, AND
+                   YOUR MONEY BACK WITH COMPOUND INTEREST
+
+     "Do you know that every 15/6 you put into War Savings Certificates
+     can purchase 124 rifle cartridges?
+
+     "How many Cartridges will you provide for our men at the Front?
+
+     "For every 15/6 you put into War Savings Certificates now you will
+     receive L1 in five years' time. This is equal to compound interest
+     at the rate of 5.47 per cent.
+
+     "Each year your money grows as follows:
+
+
+                          In 1 year  it becomes 15/9
+                          In 2 years it becomes 16/9
+                          In 3 years it becomes 17/9
+                          In 4 years it becomes 18/9
+                          In 5 years it becomes   L1
+
+
+     "If you need it you can withdraw your money at any time, together
+     with any interest that has accrued."
+
+
+This advertisement made a good many people sit up because it brought
+home for the first time one concrete use of the money absorbed in war
+loans.
+
+The National War Savings Committee had two things to sell. One was the
+Five Per Cent Exchequer Bond: the other was the new Fifteen and Six War
+Savings Certificate. The promoters were quick to see that while the
+Exchequer Bond was very desirable, the principal effort must be
+concentrated on the War Savings Certificate for which the widest appeal
+and the best selling talk could be made.
+
+That it was a good "buy" nobody could deny. It was the obligation of the
+British Government: it was free from Income Tax: it could be cashed in
+at any time at a profit: and it made the owner part and parcel of the
+financing of the war. Every post office and nearly every bank became a
+selling agent. In short, it was a simple, cheap and worth-while
+investment absolutely within the scope of every one.
+
+At the outset the sale was restricted to those whose income did not
+exceed $1,500, the purpose being to keep the investment among the wage
+earners. So many munition workers were receiving such large incomes
+that this ban was removed. The only limitation imposed was that no
+individual could hold more than 500 Certificates. This did not prevent
+the various members of a family, for example, from each acquiring the
+full limit.
+
+Having decided to make the War Savings Certificate its prize commodity,
+the Committee proceeded to launch a spectacular, even sensational
+promotion campaign. J. Rufus Wallingford in his palmiest days was never
+more persuasive than the literature which now fairly flooded Great
+Britain.
+
+The phrase "Your King and Country Need You" that had stirred the
+recruiting fever now had a full mate in the slogan "Saving for Victory"
+which began to loosen pounds and pence from their hiding places. The
+injunction that went forth everywhere was
+
+
+                     "WORK HARD: SPEND LITTLE:
+                            SAVE MUCH"
+
+
+From every bill board and every newspaper were emblazoned:
+
+
+                  "SIX REASONS WHY _YOU_ SHOULD SAVE"
+
+     Here are the reasons:
+
+     1. Because when you save you help our soldiers and sailors to win
+     the war.
+
+     2. Because when you spend on things you do not need you help the
+     Germans.
+
+     3. Because when you spend you make other people work for you, and
+     the work of every one is wanted now to help our fighting men, or to
+     produce necessaries, or to make goods for export.
+
+     4. Because by going without things and confining your spending to
+     necessaries you relieve the strain on our ships and docks and
+     railways and make transport cheaper and quicker.
+
+     5. Because when you spend you make things dearer for every one,
+     especially for those who are poorer than you.
+
+     6. Because every shilling saved helps twice, first when you don't
+     spend it and again when you lend it to the Nation.
+
+
+The word "Save" which had dropped out of the British vocabulary suddenly
+came back. It was dramatised in every possible way and it became part of
+a new gospel that vied with the war spirit itself.
+
+The National War Savings Committee became a centre of activity whose
+long arms reached to every point of the Kingdom. Branch organisations
+were perfected in every village, town and county: the Admiralty and the
+War Office were enlisted: through the Board of Education every school
+teacher became an advance agent of thrift: the Church preached economy
+with the Scripture: in a word, no agency was overlooked.
+
+The sale of Certificates started off fairly well. On the first day more
+than 2,000 were sold and the number steadily increased. But while many
+individuals rallied to the cause, there was not sufficient team work.
+
+One serious obstacle stood in the way. While fifteen shillings and a
+sixpence is a comparatively small sum to a man who makes a good income,
+it looms large to the wage earner, especially when it has to be "put by"
+and then goes out of sight for four or five years. So the National War
+Savings Committee set about establishing some means by which the
+average man or woman could start his or her investment with a sixpence,
+that is, twelve cents. Even here there was a difficulty. Millions of
+people in England could save a sixpence a week, but the chances are that
+before they piled up the necessary fifteen and six to buy the first
+Certificate they would succumb to temptation and spend it.
+
+The English small investor, like his brother nearly everywhere, is a
+person who needs a good deal of urging or the power of immediate example
+about him. Thereupon the Committee said: "What seems impossible for the
+individual, may be possible for a group."
+
+Thus was born the idea of the War Savings Association, planned to enable
+a group of people to get together for collective saving and co-operative
+investment. This proved to be one of the master strokes of the campaign.
+From the moment these Associations sprang into existence, the whole War
+Savings Certificates project began to boom and it has boomed ever since.
+
+War Savings Associations are groups of people who may be clerks in the
+same office, shop assistants in the same establishments, workers in the
+same factory or warehouse, people attending the same place of worship,
+residents in any well-defined locality such as a village or ward of a
+town, members of a club, the servants in a household: in short, any
+number of people who are willing to work together. Some have been
+started with 10 members, others with as many as 500. Up to the first of
+January nearly 10,000 of these Associations had been formed throughout
+the Kingdom.
+
+Now came the inspiration that was little short of genius for it enabled
+the lowliest worker who could only set aside a sixpence a week to become
+an intimate part of the great British Saving and Investment Scheme. The
+idea was this:
+
+If one man saves sixpence a week, it would take him thirty-one weeks to
+get a One Pound War Certificate. But if thirty-one people each save
+sixpence a week, they can buy a Certificate at once and keep on buying
+one every week. Thus their savings begin to earn interest immediately.
+Thus every War Savings Association became a co-operative saving and
+investment syndicate--a pool of profit.
+
+How are the Certificates distributed? The usual procedure is to draw
+lots. In a small Association no member is ordinarily permitted to win
+more than one Certificate in a period of thirty-one weeks, except by
+special arrangement. Each Association, however, can make its own
+allotment rules. The value of winning a Certificate the first week is
+that the winner's 15/6 will have grown to one pound in four years and a
+half instead of five. This is broadly the financial advantage gained by
+being a member of an Association, although the larger reason is that it
+is more or less compulsory as well as co-operative saving.
+
+Britain is buzzing with these War Savings Associations. You find them in
+the mobilisation camps, on the training ships, on the grim grey fighters
+of the Grand Fleet, even in the trenches up against the battle line. The
+London telephone girls have their own organisation: sales forces of
+large commercial houses are grouped in thrift units: there are saving
+battalions in most of the munition works, and so it goes. In many of
+the big mercantile establishments that have Associations, the weekly
+drawings of Certificates with all their elements of chance and profits
+are exciting events.
+
+Many Britishers shy at co-operation. For example, they like to save "on
+their own." To meet this desire, the War Savings Committee devised an
+individual saving and investment plan which begins with a penny, that is
+two cents. Any person can go to the Treasurer of a War Savings
+Association and get a blank stamp book. Each penny that he deposits is
+marked with a lead pencil cross in a blank square. When six of these
+marks are recorded, a sixpenny stamp is pasted on the blank space. As
+soon as the book contains thirty-one stamps it is exchanged for a War
+Savings Certificate.
+
+Still another plan has been devised to meet requirements of people who
+do not care to affiliate with the War Savings Associations. Any post
+office will issue a stamp book in which ordinary sixpenny postage stamps
+can be pasted. When thirty-one have been affixed they may be exchanged
+at the post office for a pound Savings Certificate. These books have
+this striking inscription on their cover: "Save your Silver and it will
+turn into Gold! 15/6 now means a sovereign five years hence."
+
+The whole Savings Campaign is studded with picturesque little lessons in
+thrift. The London costers--the pearl-buttoned men who drive the little
+donkey carts--subscribed to $1,000 worth of Certificates in a single
+week, although they had made a previous investment of $4,000.
+
+In hundreds of factories the idea has taken root. In some of them War
+Savings subscriptions are obtained by means of deductions from wages.
+Employees can sign an authorisation for a certain amount to be taken
+each week or month out of their wages. They get accustomed to having
+two, three, four or five shillings lifted out of their wages and thus
+their saving becomes automatic.
+
+Often the employer helps the movement by contributing either the first
+or last sixpence of each Certificate or offering Certificates as bonuses
+for good conduct or extra work. When one small employer that I heard of
+pays his men their War Bonus, he gets them, if they are willing, to
+place two sixpenny stamps on a stamp card, for which he deducts
+tenpence. The employees are thus given twopence for every shilling they
+save. When these cards bear stamps up to the value of 15/6 they are
+exchanged for War Savings Certificates.
+
+No field has been more fruitful than the public schools where the thrift
+seed has been planted early. In hundreds of public educational
+institutions Savings Clubs have been formed to buy Certificates. In
+Huntingdonshire, where there were less than 150 pupils, more than $35.00
+was subscribed in a single morning. At Grimsby a successful trawler
+owner gave $5,000 to the local teachers' association to help the War
+Savings crusade. A shilling has been placed to the credit of every child
+who undertakes to save up for a War Savings Certificate, the child's
+payments being made in any sum from a penny up. Ninety-five per cent of
+the children in the town have begun to save. Similarly, a councillor of
+Colwyn Bay has offered to pay one shilling on each Certificate bought by
+the scholars of one of the town's schools, and also offered to add fifty
+per cent to all sums paid into the school savings bank during one
+particular week, provided that the money was used to purchase War
+Savings Certificates.
+
+Almost countless schemes have been devised to instil, encourage and
+develop the thrift idea. In certain districts, patriotic women make
+house to house canvasses to collect the instalments for the
+Certificates. They become living Thrift Reminders. Tenants of model
+flats and dwelling houses pay weekly or monthly War Savings Certificates
+at the same time they pay their rent.
+
+That this economy and savings idea has gone home to high and low was
+proved by an incident that happened while I was in London. A man
+appeared before a certain well-known judge to ask for payment out of a
+sum of money that stood to his credit for compensation to "buy clothes."
+The judge reprimanded him sharply, saying, "Are you not aware that one
+of the principal War Don'ts is, 'Don't buy clothes: wear your old
+ones.'" With this he held up his own sleeve which showed considerable
+signs of wear. Then he added: "If I can afford to wear old garments, you
+can. Your application is dismissed."
+
+With saving has come a spirit of sacrifice as this incident shows: A
+London household comprising father, mother and two children moved into a
+smaller house, thus saving fifty dollars a year. By becoming teetotalers
+they saved another five shillings (one dollar and a quarter) and on
+clothes the same weekly sum. They took no holiday this summer: ate meat
+only three times a week, abstained from sugar in their tea, cut down
+short tramway rides, and the father reduced his smoking allowance. By
+these means they have been able to buy a War Savings Certificate every
+week.
+
+Just as no sum has been too small to save, so is no act too trivial to
+achieve some kind of conservation. People are urged to carry home their
+bundles from shops. This means saving time and labour in delivery and
+permits the automobile or wagon to be used in more important work. I
+could cite many other instances of this kind.
+
+Even the children think and write in terms of economy. At the annual
+meeting of the British Association for the Advancement of Science held
+last summer at Newcastle, an eminent doctor read a paper on "London
+Children's Ideas of How to Help the War." The replies to his questions,
+which were sent to more than a thousand families, all indicated that the
+juvenile mind was thoroughly soaked with the savings idea. Some of the
+answers that he quoted were very humorous. A boy in Kensington gave the
+following reasons:
+
+"Eat less and the soldiers get more: If you make a silly mistake in your
+arithmetic tell your mother not to let you have any jam, and put the
+money saved in the War Loan: Stop climbing lamp-posts and save your
+clothes: Don't wear out your boots by striking sparks on the kerbstones:
+If you buy a pair of boots you are a traitor to your country, because
+the man who makes them may keep a soldier waiting for his: Don't use so
+much soap: Don't buy German-made toys."
+
+The net result of this mobilisation of the forces of thrift is that up
+to January the first 50,000,000 War Certificates had been sold,
+representing an investment of nearly 40,000,000 pounds or approximately
+$200,000,000. The striking feature about this large sum is that it was
+reared with the coppers of working men and women. "Serve by Saving" in
+England has become more than a phrase.
+
+All this was not achieved, however, without the most persistent
+publicity. England to-day is almost one continuous bill board. The
+hoardings which blazed with the appeal for recruits and the War Loan now
+proclaim in word and picture the virtues of saving and the value of the
+now familiar War Certificates. Likewise they embody a spectacular lesson
+in thrift for everybody.
+
+One of the most effective posters is headed "ARE YOU HELPING THE
+GERMANS?" Under this caption is the subscription:
+
+"You are helping the Germans when you use a motor car for pleasure: when
+you buy extravagant clothes: when you employ more servants than you
+need: when you waste coal, electric light or gas: when you eat and drink
+more than is necessary to your health and efficiency.
+
+"Set the right example, free labour for more useful purposes, save money
+and lend it to the Nation and so help your Country."
+
+A gruesome, but none the less striking, poster is entitled: "What is
+the Price of Your Arms?"
+
+Then comes the following dialogue:
+
+Civilian: "How did you lose your arm, my lad?"
+
+Soldier: "Fighting for you, sir."
+
+Civilian: "I'm grateful to you, my lad."
+
+Soldier: "How much are you grateful, sir?"
+
+Civilian: "What do you mean?"
+
+Soldier: "How much money have you lent your Country?"
+
+Civilian: "What has that to do with it?"
+
+Soldier: "A lot. How much is one of your arms worth?"
+
+Civilian: "I'd pay anything rather than lose an arm."
+
+Soldier: "Very well. Put the price of your arm, or as much as you can
+afford, into Exchequer Bonds or War Savings Certificates, and lend your
+money to your Country."
+
+Still another is entitled "BAD FORM IN DRESS" and reads:
+
+"The National Organising Committee for War Savings appeals against
+extravagance in women's dress.
+
+"Many women have already recognised that elaboration and variety in
+dress are bad form in the present crisis, but there is still a large
+section of the community, both amongst the rich and amongst the less
+well to do, who appear to make little or no difference in their habits.
+
+"New clothes should only be bought when absolutely necessary and these
+should be durable and suitable for all occasions. Luxurious forms, for
+example, of hats, boots, shoes, stockings, gloves, and veils should be
+avoided.
+
+"It is essential, not only that money should be saved, but that labour
+employed in the clothing trades should be set free."
+
+Harnessed to the Saving and Investment Campaign is a definite and
+organised crusade against drink, ancient curse of the British worker,
+male and female. It is really part of the movement instituted by the
+Government at the beginning of the war to curtail liquor consumption.
+One phase is devoted to Anti-Treating, which makes it impossible to buy
+any one a drink in England. This was followed by a drastic restriction
+of drinking hours in all public places where alcohol is served. Liquors
+may only be obtained now between the hours of 12 noon and 2:30 in the
+afternoon and from 6 to 9:30 at night. As a matter of fact, the only
+tipple that you can get at supper after the play, even in the smartest
+London hotels, is a fruit cup, which is a highly sterilised concoction.
+
+The War Savings Committee has borne down hard on the drinking evil and
+England's enormous yearly outlay for liquor--nearly a billion
+dollars--is used as a telling argument for thrift. A poster and a
+pamphlet that you see on all sides is headed, "THE NATION'S DRINK BILL,"
+and reads:
+
+"The National War Savings Committee calls attention to the fact that the
+sum now being spent by the Nation on alcoholic liquors is estimated at
+
+
+                      L182,000,000 a year.
+
+
+"And appeals earnestly for an immediate and substantial reduction of
+this expenditure in view of the urgent and increasing need for economy
+in all departments of the Nation's life.
+
+"Obviously, in the present national emergency a daily expenditure of
+practically L500,000 on spirits, wine and beer cannot be justified on
+the ground of necessity. This expenditure, therefore, like every other
+form and degree of expenditure beyond what is required to maintain
+health and efficiency is directly injurious to national interests.
+
+"Much of the money spent on alcohol could be saved. Even more important
+would be (1) the saving for more useful purposes of large quantities of
+barley, rice, maize and sugar; and (2) the setting free of much labour
+urgently needed to meet the requirements of the Navy and the Army.
+
+"To do without everything not essential to health and efficiency while
+the war lasts is the truest patriotism."
+
+Under the silent but none the less convincing plea of these posters,
+backed up by millions of leaflets and booklets explaining every phase of
+the Savings Campaign, the sale of Certificates rose steadily. From
+906,000 in May they jumped to nearly 3,000,000 in June. But this was not
+enough. "Let us make one big smash and see what happens," said the
+Committee. Thereupon came the idea for a War Savings Week, which was to
+be a notable rallying of all the Forces of Thrift and Saving.
+
+No grand assault on any of the actual battle fronts was worked out with
+greater care or more elaborate attention to detail than this Savings
+Drive. No loophole to register was overlooked. It was planned to begin
+the work on Sunday, July 16th.
+
+First of all, the resources of the Church were mobilised. A Thrift
+sermon was preached that Sunday morning in nearly every religious
+edifice in the Kingdom. Following its rule to leave nothing to chance,
+the War Savings Committee prepared a special book of notes and texts for
+sermons which was sent to Minister, Leaders of Brotherhoods and Men's
+Societies. Texts were suggested and ready-made and ready to deliver
+sermons were included. One of these sermons was called "The Honour of
+the Willing Gift," another was entitled "The Nation and Its Conflict,"
+and its peculiarly appropriate text was "Well is it with the man that
+dealeth graciously and lendeth."
+
+A special address (in words of one syllable) to the children of England
+embodying the virtues of penny saving and showing how these pennies
+could be made to work and earn more pennies, as shown in the concrete
+example of a War Savings Certificate, was read by thousands of Sunday
+school teachers to their classes throughout the nation.
+
+Nearly every human being in Great Britain got the Message of Thrift that
+week. Boy Scouts and Girl Guides went from house to house bearing copies
+of the various kinds of instructive literature that had been prepared
+for the campaign. Typical of the thoroughness of the detail is the fact
+that in Wales all this material was printed in the Welsh language. The
+only country where no special efforts were made was Scotland, where to
+preach thrift is little less than an insult.
+
+For seven days and nights the almost incessant onslaught was kept up.
+When the smoke cleared and the count was taken, it was found that
+3,000,000 Certificates had been sold during the week while the total for
+the month was 10,700,000.
+
+So vividly was the phrase "War Savings Week" driven home that the War
+Savings Committee decided instantly to capitalise this new asset. In a
+few days hundreds of bill boards and fences throughout the Kingdom
+blossomed forth with this sentence, painted in red, white and blue
+letters: "Make Every Week National War Savings Week."
+
+Not content with splashing the bill boards with the injunction to save,
+the National Committee hit upon what came to be the most popular medium
+for disseminating the Gospel of Thrift. It enlisted the movies. A film
+called "For the Empire" was made by a number of well known motion
+picture actors and actresses who gave their services free of charge.
+
+It was a moving and graphic story of the war showing how a certain
+English lad volunteers at the outset and goes to the front. You get a
+vivid picture of life in the trenches shown in actual war scenes. Then
+you see the young soldier fall while gallantly leading a charge: his
+body is brought home and he is buried with military honours. Then the
+screens hurls the question at the audience: "This man has died for his
+Country. What are you doing for the Nation in its hour of trial?" Now
+follows a vivid lesson in how to save and buy a War Savings
+Certificate. This film has been shown in 2500 cinema theatres up to the
+first of the year and was booked to be shown in 1000 more within the
+next few months.
+
+So widespread has the Thrift movement become that the War Savings
+Committee now publishes its own monthly magazine called _War Savings_.
+The first issue appeared on September first and included such timely
+articles as "The Might of a Mite," a lesson in penny building: "The
+Final Mobilisation," which showed how the last L100,000,000 would win
+the war: a third article explained the Economy Exhibition now being held
+all over Great Britain as part of the Thrift crusade. There was also an
+article on the War Saving movement by Reginald McKenna, Chancellor of
+the Exchequer, and a very illuminating appeal, "Every Household Must
+Help Win the War."
+
+This leads to one of the most instructive branches of the whole
+campaign, the one devoted to the elimination of waste in the household.
+Under the direction of the Patriotic Food League a voluminous and
+helpful literature has been prepared and distributed. One booklet
+devoted to "Waste in the Well-to-do Household" shows how gas, coal and
+electric light bills, and the whole cost of living can be reduced.
+Another called "Household Economies" has helpful hints for mistress and
+maid: a third is "The Best Foods in War-Time." A stirring plea was made
+to every household in the shape of a card surmounted by a picture of
+Lord Kitchener and containing his famous warning to the English people:
+"Either the civilian population must go short of many things to which it
+is accustomed in times of peace, or our armies must go short of
+munitions and other things indispensable to them." Below this quotation
+was the stirring question:
+
+"Which is it to be: economy in the household or shortage in the Army and
+Navy?"
+
+Under the title of "War Savings in the Home" a plan of campaign has been
+sent to every household in England for operation during the whole period
+of war. Among other things it urges every family to give up meat for at
+least one day in the week, and in any case to use it only once a day.
+Margarine is recommended instead of butter. Home baking is strenuously
+suggested. It is shown how reduction in personal and household
+expenditure can be effected, for example, in the laundry by using
+curtains and linen that can be washed in the house. A special appeal to
+dispense with starched and ornamental lingerie is made. In these and
+many other ways the style of living is simplified so that the amount of
+domestic service in every home is greatly cut down and much labour set
+free for war work and general production.
+
+Indeed, no phase of Life or Work has escaped the Search-Light of the
+benevolent Inquisition which has wrought Conservation out of Waste.
+
+It has a larger significance than merely changing habits and converting
+pounds and pence into guns and shells. It means that England is creating
+a Sovereignty of Small Investors, thus setting up the safeguard that is
+the salvation of any land. The War Savings Certificate will have a
+successor in the shape of a more permanent but equally stable Government
+bond.
+
+When all is said and done you find that huge reservoirs of Savings at
+work form a country's real bulwark. Through investment in small,
+accessible, and marketable securities a people become independent and
+therefore more efficient and productive. It mobilises money.
+
+Behind all the spectacular publicity that has swept hundreds of millions
+of British shillings into safe and profitable employment is a Lesson of
+Preparedness that America may well heed. It means a form of National
+Service that is just as vital to the general welfare as physical
+training for actual conflict. A nation trained to save is a nation
+equipped to meet the shock of economic crisis which is more potent than
+the attack of armed forces.
+
+What does it all mean? Simply this: no man can touch the English thrift
+campaign without seeing in it another evidence of a great nation's grim
+determination to win, whatever the sacrifice.
+
+The British people at home have come to realise that by personal economy
+and denial they can serve their country and their cause just as
+effectively as those who fight amid the blare of battle abroad. They are
+animated by a New Patriotism that is both practical and self-effacing.
+It is giving the Englishman generally a higher sense of public devotion:
+it is making him a better and more productive human unit: it is
+equipping the nation to meet the drastic economic ordeal of to-morrow.
+
+If this lesson of conservation is heeded after the war and becomes a
+feature of the permanent British life, then the Great Conflict will
+almost have been worth its dreadful cost in blood and treasure. He who
+saves now will not have saved in vain.
+
+
+
+
+VI--_The Price of Glory_
+
+
+When John Jones of the U.S.A. puts his thousand dollars into an English,
+French, Russian or German bond he becomes part and parcel of the
+mightiest financial structure ever dedicated to a single purpose. He
+cannot tell how his funds will be used. They may buy a few hundred
+shells, clothe a thousand soldiers, feed a battalion or build a trench.
+All he knows is that his mite joins the continuous and colossal stream
+of expense that makes up the Red Wage of War.
+
+Now if John Jones employs his money in the stock or bond of a railroad,
+corporation, or public utility enterprise he can find out almost
+precisely what it does, for it lays down a track, provides new equipment
+or builds a power house. The investment, in short, represents something
+that produces more wealth.
+
+War, on the other hand, is a gigantic engine of destruction. Instead of
+building up, it tears down. It is a monster machine consecrated to
+waste. The only possible dividend can be peace.
+
+The cost of the European conflict has a deeper interest for us than mere
+curiosity over staggering statistics. The reason is that we have joined
+the Paymaster's Corps. In other words, we have backed up our sympathy
+with cash. We are silent partners in the costliest and deadliest of all
+businesses.
+
+Up to the present stupendous struggle and with the exception of the
+Russo-Japanese War in which we floated several issues for the little
+yellow men, we have had no definite economic part in the wars that shook
+other nations. The losses in money and in men fell on the combatants.
+
+This war, which has shattered so many precedents, has drawn the United
+States out of its one-time aloofness. To the dignity of World Trader we
+have added the twin distinction of World Banker. Already we have poured
+out practically two billions of dollars for securities and credits of
+the warring countries. To this must be added an even greater sum
+representing our enormous war exports. The price, therefore, of whatever
+freedom emerges from these years of bloodshed intimately touches
+thousands of American pocketbooks in one way or another.
+
+What is the final toll that Battle will take: more important than this,
+what is the future of the treasure that we have laid on its Consuming
+Altar?
+
+Before making any analysis of the American stake in the cost of the
+European War, it is important to find out first just how much money has
+been expended and what the likelihood of future outlay will be. Like
+every other phase of the stupendous upheaval this one is both
+speculative and problematical.
+
+To deal with these European War figures is to flirt with Titanic
+Numerals. They are more the Playthings of the Gods than matters for mere
+mortals to juggle with.
+
+Up to the first of January, 1917, the total military expenses of both
+sides had reached approximately $61,000,000,000. It is only when you
+reduce this enormous sum to terms that every man and woman can
+understand that you begin to get some idea of the amazing cost of
+conflict.
+
+The amount of money expended for direct war purposes alone since August
+1, 1914, is equal to three times the par value capitalization of all
+the American railroads. It represents fifty times the net national debt
+of the United States: eighteen times the amount of money in actual
+circulation in this country: and eleven times the total deposits in all
+our savings banks. With it you could build 146 Panama Canals or pay for
+the Napoleonic, Crimean, Russo-Japanese, South African and American
+Civil Wars and still have a surplus of $34,000,000,000 left. Such is the
+New and High Cost of War!
+
+The price of glory is being constantly advanced. The expenditures for
+the first year of the war were $17,500,000,000: for the second they had
+increased to $28,000,000,000: the estimate for the third year, to end
+August 1, 1917, at the present rate of spending is about
+$33,000,000,000. This means that by the time the next harvest moon
+shines (and no man in Europe to-day doubts that it will gleam on
+carnage), the war will have represented a sacrifice for military
+purposes alone of $78,500,000,000.
+
+Taking the daily cost of the war you find that England is $25,000,000
+poorer for every twenty-four hours that pass: that France must check
+out $20,000,000: Russia $16,000,000: Italy $5,000,000. Little Roumania
+is cutting her war expenditure teeth at the rate of $1,000,000 per diem.
+
+Cross the frontier (for war expense is no respecter of cause or creed),
+and Germany is "discovered," as they say in play-books, spending
+$17,500,000 every day: Austria, Turkey and Bulgaria, $11,000,000. Thus
+between sunrises that break over these warring hosts very nearly
+$100,000,000 has gone up in smoke, splinters or ruin of some kind, or
+the upkeep of fighting.
+
+Since England's cost each day is heavier than any of the other countries
+at war, due to the fact that she is Financial First Aid to most of her
+Allies and is maintaining a fleet almost equal to all the others
+combined, let us reduce her enormous daily war bill of $25,000,000 to
+simpler form. It means that participation in the greatest of all wars is
+costing her $1,410,666 an hour, $17,361 a minute and a little over $289
+a second. At this rate of waste John D. Rockefeller would be bankrupt in
+forty days; Andrew Carnegie would be in the bread line in ten. The sum
+is greater than the entire net public debt of Chicago; it equals the
+assessed valuation of all the taxable property in Poughkeepsie, New
+York.
+
+Work out this immense daily outlay from still another angle and these
+striking facts develop: the war is costing at the rate of 29 cents a day
+for every inhabitant of the United Kingdom: 31 cents for every
+individual in France: 22 cents for every person in the Kaiser's domain,
+and 6 cents for each human unit in the Russian Empire.
+
+Yet this well-nigh overwhelming rush of figures only accounts for the
+actual cost of hostilities. By this I mean arms and armament, food and
+military supplies, the construction, maintenance and renewal of fleets,
+the cost of transport and the pay of soldiers and sailors.
+
+To the vast sum already recorded must be added the loss registered by
+the destruction of cities, towns and villages, the sinking of ships, the
+wiping out of factories, warehouses, bridges, roads and railways.
+
+Then, too, you must allow for the almost incalculable productive loss
+due to the killing and maiming of millions of men: the shrinkage of
+agricultural yields and the more or less general dislocation of the
+machinery of output. All these factors pile up a total, the calculation
+of which would almost cause a compound fracture of the brain. Sufficient
+to say it puts a terrific human and financial tax on coming generations
+and we in America will feel its effects when the world begins to
+readjust itself to the altered social and economic conditions which will
+come with peace.
+
+Of course the inevitable question arises: Who is paying the Scarlet
+Piper? In seeking the answer you encounter for the first time America's
+intimate and all-important part in the costly drama now being unfolded
+to the tune of billions. She sits in the armoured box-office with the
+Treasurers of the embattled nations.
+
+At the outset of the war all the belligerent countries believed that
+they could finance their needs without seeking neutral aid. Less than a
+year was enough to dispel this delusion. Although England and France
+immediately voted immense credits they were not long in finding out that
+they must back up their unprecedented mobilisation of resources with
+outside help. They came to us.
+
+When the great Anglo-French loan of $500,000,000 was first discussed as
+a possible American financial feat, people over here began to wonder why
+Great Britain and France, whose combined wealth exceeds that of all the
+other nations at war, should want overseas assistance. Since the reason
+for this loan as well as the disposition of proceeds are practically the
+same as that of most of the other Allied issues in this country in which
+thousands of our investors have participated, it is well worth
+explaining because it also carries with it a lesson in international
+barter. Here it is:
+
+Before the war our foreign trade was growing fast. England and France,
+in particular, were good customers for our wheat and other foodstuffs,
+iron and cotton manufactures, oil and automobiles. In exchange we
+imported the product of many European factories.
+
+Business relations between nations are not settled like transactions
+between individuals and firms, that is, with checks or cash. They are
+settled by balances. England's imports from the United States, for
+example, are paid by her exports to us. Usually exports and imports so
+nearly balance that the difference is paid by gold or with the temporary
+use of bank credit. Therefore it is not a question of actual money but
+of exchange and this foreign exchange is a commodity whose value
+fluctuates with supply and demand.
+
+Along came the war. Millions of artisans in France and England were
+withdrawn from lathe and loom to fight in the battle line. What workers
+remained at their posts had to produce war supplies. Yet civilian and
+soldier needed food, clothing and arms. The demand for our products
+increased and the United States suddenly became the work-shop and the
+granary of the world.
+
+The Allies, in control of the seas, became our principal foreign
+customers. American exports soared: those of France and England declined
+correspondingly. A huge balance of trade--the biggest in our
+history--swung to our favour.
+
+This balance of trade had to be settled, but on an abnormal basis. What
+was ordinarily a comparatively trivial matter of a few millions
+suddenly became an item of many millions and it was all owed on one
+side. The demand for exchange on New York greatly exceeded the supply
+and the inevitable dislocation happened. England and France had to pay a
+drastic premium on the American dollar. The English pound, normally
+rated $4.86, dropped to $4.50; the franc, ordinarily worth 19.29 cents,
+fell to 16.94 cents. This shrinkage in values was not due to any
+impairment of the resource or wealth of the Allies but because the
+machinery of international payment works automatically and
+unsentimentally.
+
+Here was a crisis that without aid from us might have eventually cost us
+dear. Rather than submit to the terrific drain on the exchange value of
+the pound and franc, England and France could have set about emulating
+the example of Germany and become self-sufficient. It was not a month's
+work or even a year's work, but ultimately it would have made these
+countries more independent of the United States after the war is over.
+
+Of course England and France could have met the situation by shipping
+gold. Each had a large reserve but the United States had all the gold it
+wanted, and still has. Besides, in such an emergency gold is an inert
+and unproductive commodity.
+
+Again, the Allies might have "dumped" their American securities
+representing an investment of over three billions of dollars, which
+would have upset the American stock market and sent prices down. Either
+one of these performances would have done us no good.
+
+It was important, therefore, for the benefit of all interest involved,
+that the Allies establish a credit in the United States that would
+enable them to buy freely and remove the costly handicap on American
+exchange. In a word, instead of having to pay their bills through an
+intricate mechanism that rose and fell with the tides of trade and put a
+premium on trading with us, a medium was needed that would restore the
+whole economic trade balance. It was as essential to us as to our
+customers.
+
+Hence the Anglo-French Five Hundred Million Dollar Loan was floated and
+Uncle Sam became a war banker. This loan, however, was nothing more or
+less than the setting up of a credit of half a billion dollars for
+England and France in the United States. To put it in another way, it is
+just as if the two Allies had deposited this sum in an American bank and
+then drew checks against it for goods and raw materials made or mined in
+America. In a word, we lent to ourselves.
+
+Put out at a time when money was scarce, the loan would have been
+unpatriotic and uneconomic. But our banks were filled with idle cash:
+everywhere capital sought safe and profitable employment. Now you begin
+to see why these allied loans are really good business in more ways than
+one.
+
+What is our financial stake in the cost of the war: what does it yield:
+how is it safeguarded?
+
+Clearly to understand this whole situation you must know just how these
+foreign bonds are put out. There are two kinds. One is the internal loan
+issued in the money of the country whose name it bears. This means that
+if it is a French bond it is in terms of francs: if English it calls for
+payment in pounds sterling: if Russian, in roubles: if German, in
+marks. An external loan, on the other hand, is issued in the money of
+the country in which it is floated. The Anglo-French loan is an example
+of this kind because both principal and interest are to be paid in
+United States gold coin. These internal and external loans may be direct
+obligations of the issuing governments or may be secured by collateral.
+
+There is still a third medium for the employment of American money in
+the war. Technically it is known as bank credit. Through this agency,
+foreign firms make deposits of money or collateral in the national banks
+of their respective countries and purchase goods in America through
+credits thus established for them in a group of New York banks or trust
+companies. The acceptances for the goods thus bought become negotiable
+documents and are bought and sold by institutions and investors at a
+discount.
+
+This evidence of debt is not the kind of foreign investment suitable for
+the man or woman with savings to employ because it is more or less a
+banking transaction. These credits usually net about 61/2 per cent.
+
+With the exception of a comparatively small amount of German and
+Austrian Bonds bought in the main by natives of these two countries for
+purely sentimental and patriotic reasons, the entire bulk of European
+loans placed in America is for the Allied countries, principally England
+and France who are our heaviest customers in trade.
+
+The largest foreign loan brought out here so far is the Anglo-French 5
+per cent External Loan which was negotiated through J. P. Morgan &
+Company--Fiscal Agents for the Allies over here--by the Commission
+headed by Lord Reading and Sir Edward Holden. It is the Joint and
+Several Obligation of the Governments of the United Kingdom of Great
+Britain and Ireland and the French Republic, is dated October 15, 1915,
+and is due five years after that date. It ranks first amongst the
+foreign war obligations of these countries.
+
+This was the first big credit arranged by England or France in the
+United States and the proceeds were used, in the manner that I have
+already described, for the purchase of American goods and to stabilize
+the foreign exchange. These bonds which have had a very wide sale in
+America were brought out at 98 and interest and at the time of issue
+represented an investment that paid nearly 51/2 per cent.
+
+These bonds, I might add, are convertible at the option of the holder on
+any date not later than April 15, 1920, or provided that notice is given
+not later than this date, par for par, into 15-25 Year Joint and Several
+41/2 per cent bonds of the Governments of the United Kingdom of Great
+Britain and Ireland and the French Republic. Such 41/2 per cent bonds,
+payable, principal and interest, in United States gold coin, in New York
+City, and free from deduction for any present or future British or
+French taxes, will mature October 15, 1940, but will be redeemable, at
+par and accrued interest, in whole or in part, on any interest date not
+earlier than October 15, 1930, upon three months' notice.
+
+The equity behind these bonds is the good name, wealth and taxing power
+of the issuing countries. The interest on this loan equals only
+one-fifth of one per cent of the total estimated income of the British
+people in 1914. It is slightly more than one-third of one per cent of
+the French Republic in 1914.
+
+Between this loan and the next large borrowing by England or France in
+the United States occurred an event of significance to the American
+investor interested in the securities of foreign nations. The
+Anglo-French loan, as you know, was simply the promise to pay of two
+great countries whose Government Bonds at home represented the last word
+in unshakable security.
+
+But when England and France stepped up to our money counters again,
+Uncle Sam put sentiment aside and became a pawn broker. "I think you are
+all right," he said, "but you are in a war that may last a very long
+time and I must have collateral."
+
+To English pride this was a terrific jolt. I happened to be in England
+at the time and I recall the astonishment of no less a distinguished
+individual than the Chancellor of the British Exchequer. It was
+unbelievable that any nation could demand greater security than the
+good name of the Empire. "If the elder J. P. Morgan were alive this would
+never have happened," said the London bankers. They knew that the
+Grizzled Old Lion of American Finance always held that character was the
+best collateral. In the war emergency, however, many American bankers
+thought to the contrary and the net result was that with all external
+loans thereafter England and France have been forced to dig into their
+strong boxes and do what any individual does when he borrows money--put
+up a good margin of security.
+
+An illustration of this secured obligation of the British Government is
+the issue of $300,000,000 Five and a Half Per Cent Gold Notes dated
+November 1, 1916. Principal and interest are payable without deduction
+of any English tax in New York and in United States gold coin. The
+holder of these notes, however, has the option to get his money in
+London but at a fixed rate of $4.86 per pound sterling, the normal value
+of the pound in peace time. Since the pound sterling at the time this
+article is written is quoted at $4.76, this is a decided advantage.
+
+The new English loan is secured by stocks and bonds whose total market
+value is not less than $360,000,000. One group of this collateral
+consists of stocks, bonds and other obligations of American corporations
+and the obligation, either as maker or guarantor, of the Government of
+the Dominion of Canada, the Colony of Newfoundland and Canadian
+Provinces and Municipalities. The second group included obligations of
+Australia, Union of South Africa, New Zealand, Argentina, Chili, Cuba,
+Japan, Egypt, India and a group of English Railway Companies. I
+enumerate this collateral to show the inroads upon British securities
+that increasing war cost is making. This collateral must always show a
+market value margin of twenty per cent above the amount of the loan. It
+means that should there be any slump the English Government must supply
+additional security.
+
+This issue was brought out in two forms. Half of the loan is in Three
+Year Notes due November 1, 1919, which were issued at 991/4 and interest
+and yielding over 5.75 per cent: the other half is in Five1/4 Year Notes
+due November 1, 1921, brought out at 981/2 and interest and yielding about
+5.85 per cent. These Notes are redeemable at the option of the
+Government at various interest dates between 1917 and 1920 at prices
+ranging from 101 to 105 and interest.
+
+Having established the precedent of a secured loan, all succeeding
+English issues in this country have been backed up with ample
+collateral. These bonds have a ready market, an important detail that
+the investor must not overlook in purchasing foreign securities.
+
+Now turn to the borrowings of France in the United States. With this
+great nation, whose middle name is Thrift, Uncle Sam was no respecter of
+past performance. For the one separate French external loan he exacted
+his pound of collateral. As a matter of fact it amounted to nearly a
+ton.
+
+I refer to the issue of $100,000,000 Three Year Five Per Cent Gold Notes
+bearing the date of August 1, 1916. To float this loan the American
+Foreign Securities Company was formed which arranged to lend the French
+Government $100,000,000. As security the Company--it was merely a group
+of American bankers, required France to deposit stocks and bonds having
+a value at prevailing market and exchange rate of $120,000,000. Should
+the value of these securities fall below this sum they must be
+replenished until there is a margin of twenty per cent in excess of the
+principal of the loan.
+
+These securities throw an interesting sidelight upon the resource of the
+French Republic and its ability to borrow desirable collateral from
+patriotic citizens. They include obligations of the Government of
+Argentine, Sweden, Norway, Denmark, Switzerland, Holland, Uruguay,
+Egypt, Brazil, Spain, and Quebec. The most picturesque parcel in the lot
+is $11,000,000 in Suez Canal shares. This stock is one of the corporate
+heirlooms of France and is very closely held. It not only pays a large
+dividend but shares in the profits of the company which in peace times
+are big. The fact that France should put these prize securities in
+"hock" is evidence of her determination to keep her credit absolutely
+above reproach.
+
+The Three Year French Notes were brought out at 98 and interest and at
+the time of issue yielded about 5.73 per cent.
+
+But all direct French borrowing in America has not been on the pound of
+flesh basis. For now we come to what might well be called The Loan of
+Sentiment. It is the $50,000,000 City of Paris Five Year Six Per Cent
+Gold Bond Issue dated October 15, 1916. It gave Americans the
+opportunity to pay a substantial tribute of affectionate gratitude for
+happy hours spent in the Queen City of Europe and have the prospect of a
+desirable dividend at the same time. Here is a piece of foreign
+financing with a distinction and a background all its own. Aside from
+its purely sentimental phase it is perhaps the only loan floated in
+America since the war which is dedicated to construction instead of
+destruction. The proceeds are to be used to reimburse the City of Paris
+for expenditures in building hospitals and making other necessary
+humanitarian improvements and to provide a sinking fund to meet similar
+disbursements. Amid the incessant hate and passion of war it is
+pleasant to find this back water of cooling relief.
+
+Like most of the foreign issues made during the war it follows the
+highly intelligent European practice of putting out loans in small
+denominations so as to be within the reach of the great mass of the
+people. These bonds may be had in multiples of $100 and upward. The
+Government of France has agreed to permit the exportation of sufficient
+gold to permit the payment of principal and interest in the yellow metal
+in New York. The loan--the only external one of the City of Paris--was
+brought out at 983/4 and interest, which would make an investment of
+6.30 per cent. In addition to this yield as an investment there is the
+possibility of profit in exchange in view of the option to collect
+principal and interest at the rate of 5.50 francs per dollar instead of
+the normal rate of exchange before the war.
+
+This statement of possible exchange profits leads us to one of the
+conspicuous features of the latest National French Loan, which although
+internal in form has been put within the ken of the American investor.
+
+Fully to comprehend it you must know that in ordinary times a dollar in
+American money is worth 5.18 francs. On account of the dislocation in
+foreign exchange the value of a dollar in French money has risen to
+approximately 5.85 francs. Therefore when you buy a French security in
+terms of francs for American dollars you get a great deal more for your
+money than you would have received before the war. Hence the possibility
+of profit when francs return to normal is large.
+
+The National French Loan was sold to American investors at an exchange
+rate of 5.90, which means that every dollar you employ gives you a
+principal of 5.90 francs. On this basis the price for the security
+issued at a par of 100 would be 871/2, which would make the direct
+yield over 5.70 per cent. Should exchange return to normal, the
+subscription price would be equivalent to 751/2, which would make the
+direct yield over 6-5/8 per cent.
+
+Translating this loan into terms of money, you find that for every
+$14.83 you invest you get 100 francs capital: for every $148.30 you get
+1000 francs capital: for $741.52 you receive 5000 francs capital. If
+French exchange should return to normal and the securities sell at the
+issue price--871/2--the investor would receive $16.89 for every 100 francs
+of capital: $168.88 for every 1000 francs: $844.39 for every 5000
+francs. On this basis without regard to income return the holder of 5000
+francs capital would receive a profit of $103.94 or over 13.75 per cent
+on his investment.
+
+Should the market price of the issue advance to 100 and exchange return
+to normal the investor would get $19.30 for every 100 francs capital;
+$193.00 for every 1000 francs capital; $965.00 for every 5000 francs
+capital. In this case and again without regard to income return, the
+holder of 5000 francs capital would receive a net profit of $223.50 or
+approximately 30 per cent.
+
+This loan is issued in _Rentes_ and in denominations of 100 francs and
+multiples. _Rentes_ is the form in which all French Government issues
+are brought out at home. The word means interest or income. The French
+always refer to their Government Bonds in terms of interest without any
+mention of principal. This is because _rentes_ are supposed to be
+perpetual. The new French loan just explained is not redeemable or
+convertible before 1931.
+
+Usually there is no limit to these National French loans. To be in
+France during the war and see the popular response to the appeal for
+funds is to have a thrilling experience in the practical side of
+patriotism.
+
+I chanced to be in Paris when one of these loans was launched.
+Throughout a day of driving rain thousands of people stood in line at
+the post offices and private institutions waiting for a chance to put
+their money out to work for their country. The French wage worker, be he
+artisan or street cleaner, needed no coaching in the art of employing
+his funds safely and profitably. Just as saving is instinct with him, so
+is the putting of these savings out to work in a Government bond second
+nature. He is the thriftiest and most cautious investor in the world. He
+has established a close and confidential relation with his banker such
+as exists in no other nation. Therefore when the French financier offers
+him Government Bonds or "Loans of Victory" as the war issues are
+emotionally termed, he does not hesitate. He knows it is all right.
+
+Alluring as is the possibility of profit in the new French Rente at the
+present abnormal exchange basis, it fades before the prospects for
+similar profit that lie in some of the Russian Government Bonds
+available in the United States. The Imperial Russian Internal Five and a
+Half Per Cent Loan of 1916 amounting to 2,000,000,000 roubles will
+illustrate.
+
+Ordinarily the Russian rouble is worth 51.45 cents in American money. It
+has gone down to 32 cents. At this rate of exchange a thousand rouble
+bond bearing interest at 51/2 per cent would only cost $320.00. Based on
+the normal value of the rouble this bond would be worth $514.60 or
+$194.60 above the present price of the bond--an increase of about 60.8
+per cent on the investment. Figuring roubles at the normal rate of
+exchange the yearly yield would be $28.28 or 8.8 per cent on the
+investment.
+
+The fact that roubles are down so low is evidence that Russian credit at
+the moment is not as high as it might be. The principal equity behind
+this bond, as well as most other Russian securities available in
+America, is the fact that Russia has immense post-war possibilities. She
+will emerge from the conflict like a giant awakened and with the first
+realisation of her enormous undeveloped resources. To offset this,
+however, is the lack of stability of Russian Government as compared with
+the other Allies which makes all Russian Bonds speculative.
+
+On account of the difficulty in shipping bonds and the preponderance of
+pro-Ally sentiment here, there has been a comparatively small market for
+German and Austrian war issues in the United States. Yet, in the face of
+these handicaps, a considerable market has developed. It is due to two
+definite reasons. One is the desire of the native born and transplanted
+Teuton to help his country. Many of them appear at the German banks with
+their savings books eager and ready to make financial sacrifice for the
+Fatherland. The other reason is that the German mark has so greatly
+depreciated (it has gone down from 23.82 cents to 17.65 cents) that
+should it ever come back to anything like normal and the Government
+does not repudiate its issues the investment will be very profitable.
+
+Here is the way it works out: in ordinary times a 4000 mark bond which
+would be the equivalent of a $1000 American piece, costs about $960. At
+the present low rate of exchange the same German bond costs $690.00 in
+American money and therefore shows a profit on the exchange basis alone
+of $270.00 or over 28 per cent. Austrian Bonds show even a larger
+profit.
+
+Summarise our war lending and you get a total of all loans to
+belligerent Governments since the outbreak of the war that aggregate
+$1,828,600,000, which is nearly one-third of the whole cost of the Civil
+War. Add to this our loans of $185,000,000 to Canadian Provinces and
+Cities and $8,200,000 to the City of Dublin and to the City of London
+for water works improvements, a grand total of $2,075,800,000 is rolled
+up. Of this sum $156,400,000 in obligations have matured and been paid
+off, which leaves a net debt to us of $1,919,400,000. It divides up as
+follows:
+
+
+            Great Britain                          $858,400,000
+            France                                  656,200,000
+            Russia                                  167,200,000
+            Italy                                    25,000,000
+            Dominion of Canada                      120,000,000
+            Canadian Provinces and Municipalities   185,000,000
+            Germany                                  20,000,000
+
+
+Having taken this financial plunge into European financial waters, Uncle
+Sam has got the foreign lending habit and has loaned $117,000,000 to
+Latin-America, mainly to Argentina and Chili: $39,000,000 to neutral
+European nations, including Switzerland, Norway, Greece and Sweden. Not
+desiring to play any race favourites, he has speeded China on her way to
+enlightenment to the extent of $4,000,000.
+
+In buying foreign war bonds--a procedure which in war time naturally
+involves sentiment--it is wise for the investor to watch his step.
+Patriotism is all right in its place but unless you can afford to
+contribute money for purely emotional reasons, a cold business estimate
+of the situation is advisable. This applies especially to the man or
+woman with savings who cannot afford to take chances. He or she will
+find it a good rule to stick to external bonds except under exceptional
+conditions.
+
+One objection to the average internal bond is that with the exception of
+England the native money has greatly depreciated in international value.
+Of course, if all these countries finally get back to their old
+standards of wealth, these investments will yield a very large profit.
+To reap this benefit, however, it will be necessary to hold the
+securities for a considerable period because it will take the warring
+countries a long time to "come back." Another fact in connection with
+internal bonds well worth remembering is that while belligerent
+countries will scrupulously respect their obligations held by a great
+neutral like the United States whose good will and resources will be
+very necessary after the close of hostilities, there is the possibility,
+remote though it may be, that repudiation of home issues may come in the
+shock of readjustment.
+
+In a word, in purchasing a foreign war bond be sure to get a stable
+national name, accumulated wealth, habits of thrift, an ample taxing
+power, and a good conversion basis behind the security.
+
+Amid all our war lending lurks a menace to future and necessary American
+financing. In flush times like these it is comparatively easy for us to
+spare large sums of money, because such capital is available and not
+missed at home. If there was the absolute certainty that all the foreign
+short term loans would be paid on maturity there would be no reason to
+show the red light.
+
+But any man who knows anything about the European financial situation
+also knows that it will be extremely difficult, almost impossible, for
+the fighting nations to meet their obligations within the time
+specified. This does not mean that they will be unable to pay. It does
+mean, however, that the inroads of the war will have been so terrific
+that pressing needs will so continue to pile up that renewals must be
+sought. Thus our money will still be tied up.
+
+What will happen at home? Simply this. American enterprise which will
+need capital for expansion may have to wait. In discussing this matter
+one of the best known American bankers said this to me the other day:
+
+"If America had a benevolent despot I believe that he ought to set
+aside an arbitrary sum which would represent the limit that we as a
+nation could lend each year to foreign countries."
+
+There is still another hardship in this outward flow of our capital. It
+lies in the fact that the very attractive terms of the war loans have
+made it very difficult for American railroads and corporations to
+finance their needs. They must pay more for their requirements than ever
+before.
+
+Yet this war financing has done more for us than merely provide an
+opportunity for the profitable employment of hundreds of millions of
+dollars. It has brought back home about $1,500,000,000 of our
+securities, mostly in railroad, that were held abroad. This has not only
+meant a considerable cutting down in the sum that we formerly had to
+send to Europe in interest and dividends, but it has helped to make us
+more economically independent. There is still $1,780,000,000 of our
+securities held abroad, and if the war keeps on much longer a great
+portion of it is likely to come back.
+
+There were two good reasons for this liquidation. One was that the
+holder of the American security in England is subject to a very high
+tax in addition to the normal income tax on large fortunes. Another was
+the necessity for the mobilisation of American securities to become part
+of the collateral offered by the British Government for the loans made
+in this country. In many instances the English owner of American
+securities has simply loaned them to his country as a patriotic act. In
+numerous other cases, however, he has sold them outright and put the
+proceeds into home war issues.
+
+You have seen how our millions have joined that greater stream of
+European billions to meet the rising tide of war cost. How is this vast
+debt to be paid and what is the paying capacity of the nations involved?
+
+In analysing the war debt and its costly hangover for posterity, you
+must remember that not all of it is in actual money. The nations at war
+have not only taxed their economic reserve through the destruction of
+productive capacity in the loss of men and material--as I have already
+pointed out--but have made a costly and well-nigh permanent drain upon
+what might be called their nervous systems.
+
+Look for a moment at the American Civil War whose cost was a mere flea
+bite as compared with the stupendous price of the European
+Conflagration. At the end of that war only half of its reckoning was
+represented in the country's bonded debt. After fifty years we are still
+paying in some way for the other and larger outlay, the invisible strain
+on the country.
+
+Strange as it may seem in the light of the present frightful ravage in
+Europe, no country has ever been completely ravaged by war. When I
+returned from Europe more than a year ago, I was convinced that economic
+exhaustion would be the determining factor: that victory would perch on
+the side of the biggest bank roll. After a second trip to the warring
+lands I am convinced that I was wrong in my first impression.
+Observation again in England and France leads me to believe that man
+power--beef, not gold--will win. The extents to which financial credit
+can be extended in the countries at war seem to be almost without limit.
+
+This leads to the final but all essential detail: How will the European
+nations pay?
+
+Since the Allies practically have a monopoly on the American money sent
+abroad for war purposes, let us briefly look at the equity behind the
+Thing known as National Honour. Its first and foremost bulwark is
+Wealth. Take England first. The wealth of the United Kingdom is
+$90,000,000,000: the annual income of the people $12,000,000,000. To
+this you can add the wealth, resource and income of all her far-flung
+colonies and the immense amount of money due to her from foreign
+countries. Unlike France and save for a few Zeppelin raids, the Empire
+is absolutely free from the ravage of war. The principal assault has
+been upon her income, for her great Principal is still intact.
+
+In examining the methods adopted by England and France to meet the cost
+of the war, you find a sharp difference of procedure which is
+characteristic of the countries. Following the British tradition,
+England is trying to make the war "pay its way" with taxation. Out of a
+total expenditure of $9,500,000,000 for the current year, no less than
+$2,500,000,000 was raised by taxation. The rest was obtained by loans at
+home and abroad.
+
+The income tax alone will serve to show the enormous increase in
+tribute. From .04 per cent on small incomes to 13 per cent on large ones
+before the war it has risen to 1 per cent on small incomes to over 411/2
+per cent on big ones. Again, 60 per cent of all excess profits earned
+since the war are surrendered to the State.
+
+I can give no better evidence of the result of this taxation than to
+repeat what Reginald McKenna, Chancellor of the British Exchequer, said
+to me in London last August:
+
+"The English position is so sound," he declared, "that if the war ended
+at the end of the current financial year, that is, on March the 31st,
+1917, our present scale of taxation would provide not only for the whole
+of our peace expenditures and the interest on the entire National Debt
+but also for a sinking fund calculated to redeem that debt in less than
+forty years. There would still remain a surplus sufficient to allow me
+to wipe out the excess profit tax and to reduce other taxes
+considerably."
+
+When I asked him to make this more specific, he continued:
+
+"The total revenue for the current year is $2,545,000,000. Our last
+Peace Budget was $1,000,000,000. Assuming that the war would end by next
+March 1st, you must add another $590,000,000 for interest and sinking
+fund on the war debt together with a further $100,000,000 for pensions
+which would make the total yearly expenditure for the first year of
+peace $1,690,000,000. Deducting this from the existing taxation you get
+a surplus of $855,000,000. Thus after withdrawing the $430,000,000
+received from the excess profits tax there still remains a margin of
+$425,000,000."
+
+Indeed, to analyze British war finance to-day is to find something
+besides debits and credits and balances. It is a great moral force that
+does not reckon in terms of pounds or pence. There is no thought of
+indemnity to soothe the scars of waste: no dream of conquest to atone
+for friendly land despoiled.
+
+Money grubbing has gone, if only for the moment, along with the other
+baser things that have evaporated in the giant melting pot of the war.
+In England to-day there are only two things, Work and Fight. They are
+giving the nation an economic rebirth: a new idea of the dignity of
+toil: they have begot a spirit of denial that is rearing an impregnable
+rampart of resource.
+
+Even more marvellous is the financial devotion of the French who present
+a spectacle of unselfish sacrifice that merely to touch, as alien, is to
+have a thrilling and unforgettable experience.
+
+When you look into the French method of paying for the war you get the
+really picturesque and human interest details. In place of taxation you
+find that the war is being paid, in the main, out of the savings of the
+people. Instead of mortgaging the future, the Gaul is utilising his
+thrifty past.
+
+Never in all history is there a more impressive or inspiring
+demonstration of the value of thrift as a national asset. It has reared
+the bulwark that will enable France to withstand whatever economic
+attack the war will make.
+
+The difference between the English and French system of war financing
+is psychological as well as material. The average Frenchman has a great
+deal of the peasant in him. He is willing to give his life and his
+honour to the nation but he absolutely draws the line at paying taxes.
+This is why the French have made it a war of loans.
+
+Go up and down the battle line in France and you get startling evidence
+of the French devotion to savings. More than one English officer has
+told me of tearful requests from French peasants for permission to go
+back to their steel-swept and war-torn little farms to dig up the few
+hundreds of francs buried in some corner of field or garden. Equally
+impressive is the sight of farmers--usually old men and women--working
+in the fields while shells shriek overhead and the artillery rumbles
+along dusty highways.
+
+Thus the French war debt will be met because of the almost incredible
+saving power of the French people. It is at once their pride and their
+prosperity. When all is said and done, you discover that with nations as
+with individuals it is not what they make but what they save that makes
+them strong and enduring.
+
+One afternoon last summer I talked in Paris with M. Alexandre Ribot, the
+French Minister of Finance: a stately white-bearded figure of a man who
+looked as if he had just stepped out of a Rembrandt etching. He sat in a
+richly tapestried room in the old Louvre Palace where more than one King
+had danced to merry tune. Now this stately apartment was the nerve
+centre of a marvellous and close-knit structure that represented a real
+financial democracy.
+
+"How long can France stand the financial strain of war?" I asked the
+Minister.
+
+Light flashed in his eyes as he replied:
+
+"So long as the French people know how to save, and this means
+indefinitely."
+
+Although the invader has crossed her threshold, France continues to
+save. Every wife in the Republic who is earning her livelihood while her
+husband is at the front (and nearly every man who can carry a gun is
+fighting or in training), is putting something by. It means the building
+up of a future financial reserve against which the nation can draw for
+war or peace.
+
+One rock of French economic solidity lies in her immense gold supply.
+The per capita amount of gold is $30.02 and is larger than any other
+country in the world. The United States is next with $19.39, after which
+come the United Kingdom with $18.28, and Germany $14.08. Let me add, in
+this connection, that a good deal of the French gold is still in
+stocking and cupboard.
+
+By the end of 1916 the war had cost France $11,000,000,000, which means
+an annual fixed charge of $600,000,000, to which must be added
+$200,000,000 for pensions, making the total fixed burden of
+$800,000,000.
+
+All this cannot be paid out of savings, although in normal times France
+saves exactly $1,000,000,000 a year. But the Government has one big
+trump card up its sleeve. It is the large fortunes of her citizens. They
+have been untouched by the war because practically no income tax has
+been levied.
+
+While the average Frenchman will sacrifice his life rather than submit
+to taxation, the upper and wealthy class will do both. The annual income
+of the people of France is $6,000,000,000. Therefore a 12 per cent tax
+on this income would very nearly produce the entire fixed charge on the
+war debt. France looks into the financial future unafraid.
+
+Financially, Russia ambles along like the Big Bear she typifies. In one
+respect her method of financing the war cost differs distinctly from her
+Allies in the fact that she has received heavy advances from England and
+France. From England alone she borrowed $1,250,000,000 which was
+expended for arms and ammunition and field equipment. The Czar's Empire
+has put out five internal loans while the rest of the money needed has
+been raised out of the sale of short term Treasury Bills, paper money
+issues and tax levies.
+
+Except for the few millions of dollars obtained in the United States,
+Germany's financing--like her whole conduct of the war--is
+self-contained. Through five Imperial 5 per cent loans ranging from one
+to three billion dollars each, she has established a war credit of
+$12,500,000,000. This money--to a smaller degree than in France--has
+come from the great mass of the German people.
+
+Other sources of revenue that are enabling the Kaiser to pay for the
+war are Treasury Bills sold at home and a taxation that is moderate
+compared with the colossal pre-war taxation which spelled Germany's
+Preparedness. At the time I write this chapter her war expenditure had
+passed the $14,000,000,000 mark. Tack on to this Germany's peace debt of
+$5,000,000,000 more and you begin to see--with all the uncertainty of
+the war's duration--the immense burden that the Fatherland will have to
+carry. The war's drain on the German future is perhaps greater than that
+of any other country because all her war loans are long term. She has
+also loaned nearly $1,000,000,000 to Austria, Turkey and Bulgaria.
+
+The Teutonic war cost has one distinct advantage over all others in that
+it is confined within the German borders. Hence Germany can do as she
+pleases with regard to its settlement. If the Mailed Fist obtains after
+the war she can clamp it down on her loans, wipe them out as she chooses
+and no one can offer a protest.
+
+Now let us dump all these statistics that represent so much blood, agony
+and sacrifice into the middle of the table and strike a final balance
+sheet.
+
+On one hand you have the assets of the warring countries as represented
+by their national wealth. For the Allies, including Roumania, they show
+a total of $273,000,000,000: for the Central Powers they register
+$134,000,000,000. If wealth is the winning factor then the Allies have
+the advantage in weight of buying metal.
+
+Take the other side of the ledger and you see that up to November 1,
+1916, the four principal allied countries, England, France, Russia and
+Italy, had spent on direct war cost approximately $34,000,000,000, while
+the total Teutonic war expenditures have been $21,000,000,000. To this
+actual war cost must be added the peace debts of the belligerent nations
+which would supplement the allied expense account by $17,465,000,000 and
+that of the enemy nations by $9,808,000,000.
+
+Striking a grand total of liabilities, you find that if the war
+mercifully ends by August 1, 1917 (as Kitchener predicted it might), the
+fighting peoples would face a debt burden of all kinds that had reached
+$105,773,000,000.
+
+After this colossal scale of expenditures you may well ask: Will it ever
+be possible for European finance to see straight or count normally
+again?
+
+Be that as it may, no one can doubt that the battling nations,
+individually or with the marvellous team-work that kinship in their
+respective causes has begot, are able to pay their way while the
+struggle lasts. Grim To-day will take care of itself under the stress of
+passion born of desire to win. It is the Reckoning of that Uncertain
+To-morrow that will prove to be the problem.
+
+You cannot bankrupt a nation any more than you can ruin an individual so
+long as brains and energy are available. Peace therefore will not find a
+ruined Europe but it will dawn on a group of depleted countries facing
+enormous responsibilities. War ends but the cost of it endures. Just as
+present millions are paying with their lives so will unborn hosts pay
+with the sweat of their brows.
+
+Meanwhile our Financial Stake in the Great Struggle is secure. How much
+more we will have to put into Europe's Red Pay Envelope remains to be
+seen. In any event, we have learned how to do it.
+
+
+
+
+VII--_The Man Lloyd George_
+
+
+The door opened and almost before I had crossed the threshold the little
+grey-haired man down at the end of the long stately room began to speak.
+Lloyd George was in action.
+
+I had last seen him a year ago in the murk of a London railway station
+when I bade him farewell after a memorable day. With him I had gone to
+Bristol where he had made an impassioned plea for harmony to the Trade
+Union Congress. Then he was Minister of Munitions, Shell-Master of the
+Nation in its critical hour of Ammunition Need.
+
+Now he had succeeded the lamented Kitchener as Minister of War; sat in
+the Seat of Strategy, head of the far-flung khakied hosts that even at
+this moment were breasting death on half a dozen fronts. Just as twelve
+months before he had unflinchingly met the Great Emergency that
+threatened his country's existence, so did he again fill the National
+Breach.
+
+England's Man of Destiny whose long career is one continuous and
+spectacular public performance was on the job.
+
+But it was not the same Lloyd George who had sounded the call for
+Military and Industrial Conscription from the Peaks of Empire. Another
+year of war had etched the travail of its long agony upon his features,
+saddened the eyes that had always beheld the Vision of the Greater
+Things. The little man was fresh from the front and full of all that its
+mighty sacrifice betokened not only to the embattled nations but to the
+world as well.
+
+Though we spoke of Politics, Presidents and the Great Social Forces that
+so far as England was concerned acknowledged him as leader, the current
+of speech always swept back to war and its significance for us.
+
+"Since the war means so much to us," I said, "have you no message for
+America?"
+
+Throughout our talk he had sat in a low chair sometimes tilting it
+backward as he swayed with the vehemency of his words. Suddenly he
+became still. He turned his head and looked dreamily out the window at
+his left where he could see the throng of Whitehall as it swept back
+and forth along London's Great Military Way.
+
+Then rising slowly and with eloquent gesture and trembling voice (he
+might have been speaking to thousands instead of one person), he said:
+
+"The hope of the world is that America will realise the call that
+Destiny is making to her in tones that are getting louder and more
+insistent as the terrible months go by. That Destiny lies in the
+enforcement of respect for International Law and International Rights."
+
+It was a pregnant and unforgettable moment. From the Throne Room of a
+Mighty Conflict England's War Lord was sounding the note of a distant
+process of peace.
+
+If you had probed behind this kindling utterance you would have seen
+with Lloyd George himself that beyond the flaming battle-lines and past
+the tumult of a World at War was the hope of some far-away Tribunal that
+would judge nations and keep them, just as individuals are kept, in the
+path of Right and Humanity.
+
+But before any such bloodless antidote can be applied to International
+Dispute, to quote Lloyd George again: "This war must be fought to a
+finish."
+
+These final words, snapped like a whip-lash and emphasised with a
+fist-beat on the table, meant that England would see her Titan Task
+through and if for no other reason because the man who drives the war
+gods wills it so. What sort of man is this who goes from post to post
+with inspired faith and unfailing execution? What are the qualities that
+have lifted him from obscure provincial solicitor to be the Prop of a
+People?
+
+"Let George do it," has become the chronic plea of all Britain in her
+time of trial. How does he do it?
+
+To understand any man you must get at his beginnings. Thus to appreciate
+Lloyd George you must first know that he is Welsh and this means that he
+was cradled in revolt. He must have come into the world crying protest.
+He was reared in a land of frowning crags and lovely dales, of mingled
+snow and sunshine, of poetry and passion. About him love of liberty
+clashed with vested tyranny. These conflicting things shaped his
+character, entered into his very being and made him temperamentally a
+creature of magnificent ironies.
+
+But this conflict did not end with emotion. All his life Contrast,
+sometimes grotesque but always dramatic, has marked him for its own. You
+behold the Apostle of Peace who once espoused the Boer, translated into
+the flaming Disciple and Maker of War through the Rape of Belgium. You
+see the fiery Radical, jeered and despised by the Aristocracy, become
+the Protector of Peers. No wonder he stands to-day as the most
+picturesque, compelling and challenging figure of the English speaking
+race. Only one other man--Theodore Roosevelt--vies with him for this
+many-sided distinction.
+
+The son of a village schoolmaster who died when he was scarcely three:
+the ward of a shoe-maker who was also inspired lay-preacher: the
+political protege of a Militant Nationalist whose heart bled at the
+oppression of the Welsh, Lloyd George early looked out upon a life
+smarting with grievance and clamouring to be free. Knowing this, you can
+understand that the dominant characteristic of this man is to rebel
+against established order. Swaddled in Democracy, he became its
+Embodiment and its Voice.
+
+The world knows about the Lloyd George childhood spent amidst poverty in
+a Welsh village. The big-eyed boy ate, thought and dreamed in Welsh,
+"the language that meant a daily fare of barley bread." When he learned
+English it was like acquiring a foreign tongue. He grew up amid a great
+revival of Welsh art, letters and religion that stirred his soul. He
+missed the pulpit by a narrow margin, yet he has never lost the
+evangelistic fervour which is one of the secrets of his control and
+command of people.
+
+With the alphabet Lloyd George absorbed the wrongs of his people and
+they were many. The Welsh had a double bondage: the grasp of the
+Landlord and the Thrall of the Church. All about him quivered the
+aspiration for a free land, a free people and a free religion. In those
+days Wales was like another Ireland with all the hardship that Eviction
+imposes.
+
+The call to leadership came early. As a boy in school he led his mates
+in rebellion against the drastic dictates of a Church which prescribed
+liberty of religious thoughts and speech. He became the Apostle of
+Nonconformity and for it waged some of his fiercest battles.
+
+Always the gift of oratory was his. He preached temperance almost with
+his advent into his teens: he was a convincing speaker before most boys
+talked straight.
+
+In due time Lloyd George became a solicitor but it was merely the step
+into public life. To plead is instinct with him and with advocacy of a
+case in court he was always urging some reform for his little country.
+Politics was meat and drink to him and he stood for Parliament. An
+ardent Home Ruler, he swayed his followers with such intensity that what
+came to be known as Lloyd George's Battle Song sprang into being. Sung
+to the American tune of "Marching Through Georgia" it was hailed as the
+fighting hymn of Welsh Nationalism. Two lines show where the young Welsh
+lawyer stood in his early twenties: they also point his whole future:
+
+
+     "The Grand Young Man will triumph,
+     Lloyd George will win the day----"
+
+
+There is something Lincoln-like in the spectacle of his first struggle.
+This lowly lad fought the forces of "Squirearchy and Hierarchy." The
+Tories hurled at him the anathema that he "had been born in a cottage."
+
+"Ah," replied Lloyd George, when he heard of it: "the Tories have not
+realised that the day of the cottage-bred man has dawned."
+
+Before he got through he was destined to show, that so far as
+opportunity was concerned, the Cottage in Great Britain was to be on a
+par with a Palace.
+
+As you analyse Lloyd George's life you find that he has always been a
+sort of Human Lightning Rod that attracted the bolts of abuse. A
+campaign meant violent controversy, frequently physical conflict. The
+reason was that he always stated his cause so violently as to arouse
+bitter resentment.
+
+Into his first election he flung himself with the fury of youth and the
+eager passion of a zealot. He threw conventional Liberalism to the wind
+and made a fight for a Free and United Wales. He frankly believed
+himself to be the inspired leader of his people: often his meetings
+became riots. More than once he was warned that the Tories would kill
+him and on several occasions he narrowly escaped death. Once while
+riding with his wife in an open carriage through the streets of Bangor
+he was assailed by a hooting, jeering mob. Some one threw a blazing fire
+ball, dipped in paraffine, into the vehicle. It knocked off the
+candidate's hat and fell into Mrs. Lloyd George's lap setting her afire.
+Lloyd George threw off his coat, smothered the flames and after finding
+that the innocent victim of the assault was uninjured, calmly proceeded
+to the Town Hall where he spoke, accompanied by a fusillade of stones
+which smashed every window in the structure.
+
+In this campaign, as in all succeeding ones, Lloyd George used the full
+powers of press publicity. He made reporters his confidants. Often he
+rehearsed his speeches before them, striding up and down and declaiming
+as passionately as if he were facing huge audiences. In fact he acquired
+an interest in a group of Welsh papers.
+
+Already Welsh chieftainship was being crystallised in the aggressive
+little fire-eater. Anticipating the coming call of the Mother Country
+she was laying her burdens on his stalwart shoulders. And what George
+was now doing for Wales he was soon to do in the larger arena of the
+Empire.
+
+Once in Parliament Lloyd George was no man's man. He became a free lance
+and while sometimes he ran amuck his cause was always the cause of his
+people.
+
+In those earlier Parliamentary days you find some of the traits that
+distinguished him later on. For one thing he disdained the drudgery of
+committee work: he chafed at the confinement of the conference room;
+eagle-like he yearned to spread his wings. His forte was talking. He
+loathed to mull over dull and unresponsive reports. He frankly admitted
+a disinclination to work, and it makes him one of the most superficial
+of men in what the world calls culture. His intelligence has more than
+once been characterised as "brilliant but hasty."
+
+But offsetting all this is the man's persuasive and pleading personality
+which always gets him over the shallow ground of ignorance. This is one
+reason why Lloyd George has always been stronger in attack than in
+defence. His tactic has always been either to assault first or make a
+swift counterdrive. He is a sort of Stonewall Jackson of Debate.
+
+Then, as throughout his whole career, he showed an extraordinary
+aversion to letter-writing. He became known in Parliament as the "Great
+Unanswered." He used to say, and still does, that an unanswered letter
+answers itself in time. This led to the tradition that the only way to
+get a written reply out of Lloyd George was to enclose two addressed and
+stamped cards, one bearing the word "Yes" and the other "No." More than
+once, however, when friends and constituents tried this ruse they got
+both cards back in the same envelope!
+
+Not long ago a well known Englishman wanted to make a written request of
+Lloyd George and on consulting one of his associates was given this
+instruction: "Make it brief. Lloyd George never reads a letter that
+fills more than half a page."
+
+There is no need of rehearsing here the long-drawn struggle through
+which he made his way to party leadership. In Parliament and out, he was
+a hornet--a good thing to let alone, and an ugly customer to stir up.
+Whether he lined up with the Government or Opposition it mattered
+little. Lloyd George has always been an insurgent at heart.
+
+The crowded Nineties were now nearing their end, carrying England and
+Lloyd George on to fateful hour. Ministries rose and fell: Roseberry and
+Harcourt had their day: Chamberlain climbed to power: Asquith rose over
+the horizon. The long smouldering South African volcano burst into
+eruption. It meant a great deal to many people in England but to no man
+quite so much as to Lloyd George.
+
+Now comes the first of the many amazing freaks that Fate played with
+him. The Institution of War which in later years was to make him the
+very Rock of Empire was now, for a time at least, to be his undoing.
+
+Before the conflict with the Boers Lloyd George was a militant
+pacifist--a sort of peacemaker with a punch. When England invaded the
+Transvaal Lloyd George began a battle for peace that made him for the
+first time a force in Imperial affairs. He believed himself to be the
+Anointed Foe of the War and he dedicated himself and all his powers to
+stem what seemed to be a hopeless tide.
+
+It was a courageous thing to do for he not only risked his reputation
+but his career. Up and down the Empire he pleaded. He was in some
+respects the brilliant Bryan of the period but with the difference that
+he was crucifying himself and not his cause upon the Cross of Peace. He
+became the target of bitter attack: no epithet was too vile to hurl upon
+him. Often he carried his life in his hands as the episode of the
+Birmingham riot shows. In all his storm tossed life nothing approached
+this in daring or danger.
+
+Lloyd George was invited to speak in the Citadel of Imperialism which
+was likewise the home of Joseph Chamberlain, Arch-Apostle of the Boer
+War. Save for the staunchest Liberals the whole town rose in protest.
+For weeks the local press seethed and raged denouncing Lloyd George as
+"arch-traitor" and "self-confessed enemy." He was warned that he would
+imperil his life if he even showed himself. He sent back this word: "I
+am announced to speak and speak I will."
+
+He reached Birmingham ahead of schedule time and got to the home of his
+host in safety. All day long sandwich men paraded the highways bearing
+placards calling upon the citizenry to assemble at the Town Hall where
+Lloyd George was to speak "To defend the King, the Government and Mr.
+Chamberlain."
+
+Night came, the streets were howling mobs, every constable was on duty.
+The hall was stormed and when Lloyd George appeared on the platform he
+faced turmoil. Hundreds of men carried sticks, clubs and bricks covered
+with rags and fastened to barbed wire. When he rose to speak Bedlam let
+loose. Jeers, catcalls and frightful epithets rained on him and with
+them rocks and vegetables. He removed his overcoat and stood calm and
+smiling. When he raised his voice, however, the grand assault was made.
+Only a double cordon of constables massed around the stage kept him from
+being overwhelmed. In the free-for-all fight that followed one man was
+killed and many injured.
+
+Anything like a speech was hopeless: the main task was to save the
+speaker's life, for outside in the streets a bloodthirsty rabble waited
+for its prey. Lloyd George started to face them single-handed and it
+was only when he was told that such procedure would not only foolishly
+endanger his life but the lives of his party which included several
+women, he consented to escape through a side door, wearing a policeman's
+helmet and coat.
+
+Fourteen years later Lloyd George returned to Birmingham acclaimed as a
+Saviour of Empire. Such have been the contrasts in this career of
+careers.
+
+Fortunately England, like the rest of the world, forgets. The mists of
+unpopularity that hung about the little Welshman vanished under the
+sheer brilliancy of the man. When the Conservative Government fell after
+the Boer War he was not only a Cabinet possibility but a necessity. The
+Government had to have him. From that time on they needed him in their
+business.
+
+Lloyd George drew the dullest and dustiest of all portfolios--the Board
+of Trade. He found the post lifeless and academic; he vivified and
+galvanised it and made it a vital branch of party life and dispute. It
+is the Lloyd George way.
+
+Here you find the first big evidence of one of the great Lloyd George
+qualities that has stood him in such good stead these recent turbulent
+years. He became, like Henry Clay, the Great Conciliator. The whole
+widespread labour and industrial fabric of Great Britain was geared up
+to his desk. It shook with unrest and was studded with strife. Much of
+this clash subsided when Lloyd George came into office because he had
+the peculiar knack of bringing groups of contending interests together.
+Men learned then, as they found out later, that when they went into
+conference with Lloyd George they might as well leave their convictions
+outside the door with their hats and umbrellas.
+
+To this policy of readjustment he also brought the laurel of
+constructive legislation. To him England owes the famous Patents Bill
+which gives English labour a share in the English manufacture of all
+foreign invention; the Merchant Shipping Bill which safeguards the
+interest of English sailor and shipper; and the Port of London Bill
+which made the British metropolis immune from foreign ship menace.
+
+England was fast learning to lean on the grey-eyed Welshman. He came to
+be known as the "Government Mascot": he was continually pulling his
+party's chestnuts out of the fire of failure or folly. George had begun
+to "do it" and in a big way.
+
+Likewise the whole country was beginning to feel pride in his
+performance as the following story, which has been adapted to various
+other celebrities, will attest:
+
+Lloyd George sat one day in the compartment of a train that was held up
+at the station at Cardiff. A porter carrying a traveller's luggage
+noticed him and called his client's attention, saying:
+
+"There is Lloyd George himself in that train."
+
+The traveller seemed indifferent and again the porter called attention
+to the budding great man. After persistent efforts to rouse his
+interest, the tourist, much nettled, said tartly:
+
+"Suppose it is. He's not God Almighty."
+
+"Ah," replied the porter, "remember he's young yet."
+
+When Lloyd George became Chancellor of the Exchequer under Asquith no
+one was surprised. It is typical of the man that he should have leaped
+from the lowest to the highest place but one in the Cabinet.
+
+As Chancellor he had at last the opportunity to fulfill his democratic
+destiny. Whatever Lloyd George may be, one thing is certain: he is
+essentially a man of the masses. With his famous People's Budget he
+legislated sympathy into the law. It meant the whole kindling social
+programme of Old Age pensions, Health and Unemployment insurance,
+increased income tax and an enlarged death duty. As most people know, it
+put much of the burden of English taxation on the pocketbooks of the
+people who could best afford to pay. The Duke-baiting began.
+
+Just as he had fought for a Free Wales so did he now struggle for a Free
+Land. All his amazing picturesqueness of expression came into play. He
+contended that Monopoly had made land so valuable in Britain that it
+almost sold by the grain, like radium. In commenting on the heavy taxes
+levied by the land autocrats upon commercial enterprise in London he
+made his famous phrase:
+
+"This is not business. It is blackmail!"
+
+To democracy the Budget meant economic emancipation: the banishment of
+hunger from the hearth: the solace of an old age free from want. It made
+Lloyd George "The Little Brother of the Poor." To the Aristocracy it was
+the gauge of battle for the bitterest class war ever waged in England:
+violation of ancient privilege.
+
+The fight for this programme made Lloyd George the best known and most
+detested man in England. To hate him was one of the accomplishments of
+titled folk to whom his very name was a hissing and a by-word. Massed
+behind him were the common people whose champion he was: arrayed against
+him were the powers of wealth and rank.
+
+In this campaign Lloyd George used the three great weapons that he has
+always brought to bear. First and foremost was the force of his
+personality, for he swept England with a tidal wave of impassioned
+eloquence. Second, he unloosed as never before the reservoirs of ink,
+for he used every device of newspaper and pamphlet to drive home his
+message. He even printed his creed in Gaelic, Welsh and Erse. Third, he
+employed his kinship with the people to the fullest extent. The Commoner
+won. As the great structure of social reform rose under his dynamic
+powers so did the influence of the House of Lords crumble like an
+Edifice of Cards. Democracy in England meant something at last!
+
+The tumult and the shouting died, the smoke cleared, and Lloyd George
+stood revealed as England's Strong Man, a sort of Atlas upholding the
+World of Public Life and much of its responsibilities.
+
+Now for the first time he was caught up in the fabric of the Crimson Net
+that a few years later was to haul nearly all Europe into war. In 1911
+Germany made a hostile demonstration in Morocco. Although England had no
+territorial interests there, it was important for many reasons to warn
+the Kaiser that she would oppose his policy with armed force if
+necessary. A strong voice was needed to sound this note. Lloyd George
+did it.
+
+Hence it came about that the Chancellor of the Exchequer stood in the
+Mansion House on a certain momentous day and hurled the defi at the War
+Lord. It called the Teuton bluff for a while at least. In the light of
+later events this speech became historic. Not only did Lloyd George
+declare that "national honour is no party question," but he affirmed
+that "the peace of the world is much more likely to be secured if all
+the nations realise fairly what the conditions of peace must be."
+
+Persistent pacifist propagandists to-day may well take warning from that
+utterance. He still believes it.
+
+The spark that flashed at Agadir now burst into flame. The Great War
+broke and half the world saw red. What Lloyd George believed impossible
+now became bitter and wrathful reality. Though he did not know it at the
+moment, the supreme opportunity of his life lay on the lap of the god of
+Battles.
+
+The Lloyd George who sat in council in Downing Street was no dreaming
+pacifist. He who had tried to stop the irresistible flood of the Boer
+War now rode the full swell of the storm that threatened for the moment
+to engulf all Britain.
+
+As Chancellor of the Exchequer he was called upon to shape the fiscal
+policies that would be the determining factor in the War of Wars. "The
+last L100,000,000 will win," he said. Only one other man in
+England--Lord Kitchener--approached him in immense responsibility of
+office in the confidence of the people. It was a proud but equally
+terrifying moment.
+
+Then indeed the little Welshman became England's Handy Man. As custodian
+of the British Pocketbook he had a full-sized job. But that was only
+part of the larger demand now made on his service. Popular faith
+regarded him as the Nation's First Aid, infallible remedy for every
+crisis.
+
+If a compromise with Labor or Capital had to be effected it was Lloyd
+George who sat at the head of the table: if an Ally needed counsel or
+inspiration it was the Chancellor who sped across the water and laid
+down the law at Paris or Petrograd: if the Cause of Empire clamoured for
+expression from Government Seat or animated rostrum, he stood forth as
+the Herald of Freedom. So it went all through those dark closing months
+of 1914 as reverse after reverse shook the British arms and brought home
+the realisation that the war would be long and costly.
+
+The year 1915 dawned full of gloom for England but pointing a fresh star
+for the career of Lloyd George. Although the first wave of Kitchener's
+new army had dashed against the German lines in France and established
+another tradition for British valour, the air of England became charged
+with an ominous feeling that something was wrong at the front. The
+German advance in the west had been well nigh triumphant. Reckless
+bravery alone could not prevail against the avalanche of Teutonic steel.
+
+All the while the imperturbable Kitchener sat at his desk in the War
+Office--another man of Blood and Iron. He ran the war as he thought it
+should be run despite the criticism that began to beat about his head.
+To the average Englander he was a king who could do no wrong. But the
+conduct of war had changed mightily since Kitchener last led his troops.
+Like Business it had become a new Science, fought with new weapons and
+demanding an elastic intelligence that kept pace with the swift march of
+military events. The Germans were using every invention that marvellous
+efficiency and preparedness could devise. They met ancient England
+shrapnel with modern deadly and devastating high-explosives. If the war
+was to be won this condition had to be changed--and at once.
+
+Two men in England--Lloyd George and Lord Northcliffe--understood this
+situation. Fortunately they are both men of courageous mould and
+unwavering purpose. One day Northcliffe sent the military expert of the
+_Times_ (which he owns) to France to investigate conditions. He found
+that the greatest need of the English Army was for high-explosives. They
+were as necessary as bread. Into less than a quarter of a column he
+compressed this news. Instead of submitting it to the Censor who would
+have denied it publication, Northcliffe published the despatch and with
+it the revelation of Kitchener's long and serious omission. He not only
+risked suspension and possible suppression of his newspapers, but also
+hazarded his life because a great wave of indignation arose over what
+seemed to be an unwarranted attack upon an idol of the people. But it
+was the truth nevertheless.
+
+At a time when England was supposed to be sensation-proof this
+revelation fell like a forty-two centimetre shell. It was an amazing
+and dramatic demonstration of the power of the press and it created a
+sensation.
+
+Shell shortage at the front had full mate in a varied deficiency at
+home. Ammunition contracts had been let to private firms at excessive
+prices: labour was restricting output and breaking into periodic
+dissension: drink was deadening energy: in short, all the forces that
+should have worked together for the Imperial good were pulling apart.
+
+Northcliffe began a silent but aggressive crusade for reform in his
+newspapers, while Lloyd George let loose the powers of his tongue. A
+national crisis, literally precipitated by these two men, arose. The
+Liberal Government fell and out of its wreck emerged the Coalition
+Cabinet. This welding of one-time enemies to meet grave emergency did
+more than wipe out party lines in an hour that threatened the Empire's
+very existence.
+
+The reorganised Cabinet knew--as all England knew--that the greatest
+requirement was not only men but munitions. A galvanic personality was
+necessary to organise and direct the force that could save the day. A
+new Cabinet post--the Ministry of Munitions--was created. Who could
+fill it was the question. There was neither doubt nor uncertainty about
+the answer. It was embodied in one man.
+
+The little Welshman became Minister of Munitions.
+
+Lloyd George had led many a forlorn hope by taking up the task that
+weaker hands had laid down. Here, however, was a situation without
+precedent in a life that was a rebuke to convention. To succeed to an
+organised and going post these perilous war times was in itself a
+difficult job. In the case of the Ministry of Munitions there was
+nothing to succeed. Lloyd George had been given a blank order: it was up
+to him to fill it. He had to create a whole branch of Government from
+the ground up. All his powers of tact and persuasion were called into
+play. For one thing he had to fit the old established Ordnance
+Department rooted in tradition and jealous of its prerogatives into the
+new scheme of things.
+
+Lloyd George was no business man, but he knew how business affairs
+should be conducted. He knew, too, that America had reared the empire of
+business on close knit and efficient organisation. He did what Andrew
+Carnegie or any other captain of capital would do. He called together
+the Schwabs, the Edisons, the Garys and the Westinghouses of the Kingdom
+and made them his work fellows.
+
+From every corner of the Empire he drafted brains and experience. He
+wanted workers without stint, so he started a Bureau of Labor Supply: he
+needed publicity, so he set up an Advertising Department: to compete
+with the Germans he realised that he would need every inventive resource
+that England could command, so he founded an Invention and Research
+Bureau: he saw the disorganisation attending the output of shells in
+private establishments, so he planted the Union Jack in nearly every
+mill and took over the control of British Industry: he found labour at
+its old trick of impeding progress, so with a Munitions Act he
+practically conscripted the men of forge and mill into an industrial
+army that was almost under martial law. He cut red tape and injected red
+blood into the Department that meant national preservation. In brief,
+Lloyd George was on the job and things were happening.
+
+The Minister established himself in an old mansion in Whitehall Garden
+where belles and beaux had danced the stately minuet. It became a dynamo
+of energy whose wires radiated everywhere. "More Munitions" was the
+creed that flew from the masthead.
+
+A typical thing happened. The working force of the Ministry grew by
+leaps and bounds: already the hundreds of clerks were jam up against the
+confining walls of the old grey building. Lloyd George sent for one of
+his lieutenants and said:
+
+"We must have more room."
+
+"We have already reported that fact and the War Office says it will take
+three months to build new office space," was the reply.
+
+"Then put up tents," snapped the little man, "and we will work under
+canvas."
+
+Realising that his principal weapons were machines, Lloyd George took a
+census of all the machinery in the United Kingdom and got every pound of
+productive capacity down on paper. He was not long in finding out why
+the ammunition output was shy. Only a fifth of the lathes and tools used
+for Government work ran at night. "These machines must work every hour
+of the twenty-four," he said. Before a fortnight had passed every
+munitions mill ground incessantly.
+
+These machines needed adequate manning. Lloyd George thereupon created
+the plan that enlisted the new army of Munitions Volunteers. Nelson-like
+he issued the thrilling proclamation that England expected every machine
+to do its duty. It meant the end of restricted output.
+
+With the ban off restriction he likewise clamped the lid down on drink.
+Munitions workers could only go to the public houses within certain
+hours: the man who brought liquor into a Government controlled plant
+faced fines and if the offence was repeated, a still more drastic
+punishment.
+
+Lloyd George began a censorship of labour which disclosed the fact that
+many skilled workers were wasting time on unskilled tasks. Lloyd George
+now began to dilute the skilled forces with unskilled who included
+thousands of women.
+
+Right here came the first battle. Labour rebelled. It could find a way
+to get liquor but it resented dilution and cried out against capacity
+output. The Shell Master again became the Conciliator. He curbed the
+wild horses, agreeing to a restoration of pre-war shop conditions as
+soon as peace came. All he knew was the fact that the guns hungered and
+that it was up to him to feed them.
+
+The wheels were not whirring fast enough to suit Lloyd George. "We must
+build our own factories," he said. Almost over night rose the mills
+whose slogan was "English shells for English guns." In speeding up the
+English output the Welshman was also equipping England to meet coming
+needs, laying the first stone of the structure that is fast becoming an
+Empire Self-Contained.
+
+Lloyd George realised that he could not run every munitions plant,
+whereupon he organised local Boards of Control in the great ordnance
+centres like Woolwich, Sheffield, Newcastle and Middleboro. Each became
+a separate industrial principality but all bound up by hooks of steel to
+the Little Wizard who sat enthroned at Whitehall.
+
+England became a vast arsenal, throbbing with ceaseless activity. The
+smoke that trailed from the myriad stacks was the banner of a new and
+triumphant faith in the future.
+
+What was the result? Up and down the western battle front English cannon
+spoke in terms of victory. No longer was British gunner required to
+husband shells: to meet crash with silence. He hurled back steel for
+steel and all because England's Hope had answered England's Call. Lloyd
+George had done it again.
+
+I first met Lloyd George during those crowded days when he was
+Commander-in-Chief of the host that fed the firing line. Under his
+magnetic direction British industry had been forged into a colossal
+munitions shop. No man in England was busier: not even the King was more
+inaccessible. Life with him was one engagement after another.
+
+Now came one of those swift emergencies that seems to crowd so fast upon
+Lloyd George's life and with it arose my own opportunity.
+
+The British Trade Union Congress in annual session at Bristol had
+expressed Labour's dissatisfaction over its share of the munitions
+profits. Lloyd George had sent them a letter explaining his proposed
+excess profit tax, but this apparently was not enough. The delegates
+still growled.
+
+"Then I'll go down and speak to them in person," said the Minister with
+characteristic energy.
+
+Thus it happened that I journeyed with him to the old town, background
+of stirring naval history. On the way down half a dozen department heads
+poured into his responsive ears the up-to-the-minute details of the work
+in hand. He became a Human Sponge soaking up the waters of fact.
+
+At Bristol in a crowded stuffy hall he faced what was at the start
+almost a menacing crowd. Yet as he addressed them you would have thought
+that he had known every man and woman in the assembly all their lives.
+The easy, intimate, frank manner of his delivery: his immediate claim to
+kinship with them on the ground of a common lowly birth: his quick and
+stirring appeal to their patriotism swept aside all discord and
+disaffection. As he gave an eloquent account of his stewardship you
+could see the audience plastic under his spell. The people who had
+assembled to heckle sat spellbound. When he had finished they not only
+gave him an ovation but pledged themselves anew to the gospel of "More
+Munitions."
+
+It was on the train back to London that I got a glimpse of the real
+Lloyd George. What Roosevelt would have called "a bully day" had left
+its impress upon the little man. His long grey hair hung matted over a
+wilted collar: there was a wistful sort of weariness in his eyes. He
+sank into a big chair and looked for a long time in silence at the
+flying landscape. Then suddenly he aroused himself and began to talk.
+Like many men of his type whom you go to interview he began by
+interviewing the interviewer.
+
+The first two questions that Lloyd George asked me showed what was going
+on in his mind, for they were:
+
+"What were Lincoln's views of conscription, and did your soldiers vote
+during the Civil War?"
+
+There was definite method in these queries, for already the Shadow of
+Conscription had begun to fall over all England. It was Lloyd George,
+aided by Northcliffe, who led the fight for it.
+
+The talk always went back to the great war. When I spoke of his speech
+at Bristol his face kindled and he said:
+
+"Have you stopped to realise that this war is not so much a war of human
+mass against human mass as it is a war of machine against machine? It is
+a duel between the English and German workman."
+
+You cannot talk long with Lloyd George without touching on democracy.
+This is his chosen ground. I shall never forget the fervour with which
+he said:
+
+"The European struggle is a struggle for world liberty. It will mean in
+the end a victory for all democracy in its fight for equality."
+
+When I asked him to write an inscription for a friend of mine and
+express the hope that lay closest to his heart, he took a card from his
+pocket, gazed for a moment at the rushing country now shot through with
+the first evening lights, and then wrote: "Let Freedom win."
+
+A few days later Lloyd George made still another appearance in his now
+familiar role of England's Deliverer. The South Wales coal miners,
+2,000,000 in number, went on strike at a time when Coal meant Life to
+the Empire. There is no need of asking the name of the man who went to
+calm this storm. Only one was eligible and he lost no time.
+
+Lloyd George did not call a conference at Cardiff: he went straight to
+Wales and spoke to the workers at the mouth of the pit. What arbitration
+and conciliation had failed to do, his hypnotic oratory achieved. The
+men went back to the mines with a cheer.
+
+A week later at the London Opera House he made a notable speech to the
+Conference of Representatives of the Miners of Great Britain. To have
+heard that speech was to get a liberal education in the art of
+phraseology and to carry always in memory the magic of the man's voice.
+In this speech he said:
+
+
+     "In war and peace King Coal is the paramount industry. Every pit is
+     a trench: every workshop a rampart: every yard that can turn out
+     munitions of war is a fortress.... Coal is the most terrible of
+     enemies and the most potent of friends.... When you see the seas
+     clear and the British flag flying with impunity from realm to realm
+     and from shore to shore--when you find the German flag banished
+     from the face of the ocean, who had done it? The British miner
+     helping the British sailor."
+
+
+Small wonder that after this effort the miners of Wales should acclaim
+their gallant countryman as Industrial Messiah.
+
+You would think that by this time England had made her final tax on the
+resource of her Ready Man. But she had not. There came the desolate day
+when the news flashed over England that the "Hampshire" had gone down
+and with it Kitchener. Following the shock of this blow, greater than
+any that German arms could deliver, arose the faltering question, "Who
+is there to take his place?"
+
+It did not falter long. Once more the S.O.S. call of a Nation in
+Distress flashed out and again the spark found its man. Lloyd George
+went from Ministry of Munitions to sit in Kitchener's seat at the War
+Office. Unlike the Hero of Khartoum, he had no service in the field to
+his credit. But he knew men and he also knew how to deploy them. Just as
+he brought the Veterans of Business to sit around the Munitions Board,
+so did he now marshal war-tried campaigners for the Strategy Table. The
+Somme blow was struck: the new War Chieftain proved his worth.
+
+In the midst of all these new exactions Lloyd George found time for
+other and arduous national labours. Two more episodes will serve to
+close this narrative of unprecedented achievement.
+
+When the recent Irish Revolt had registered its tragedy of blood, death
+and execution, menacing the very structure of Empire, Lloyd George
+became the Emissary of Peace to the Isle of Unrest.
+
+Again, when prying peacemakers sought to intrude themselves upon the
+nations engaged in a life and death struggle, it was Lloyd George, in a
+remarkable interview, who warned all would-be winners of the Nobel prize
+that peace talk was unfriendly, that "there was neither clock nor
+calendar in the British Army," that the Allies would make it a finish
+fight.
+
+So it went until gloom once more took up its abode amid the Allies.
+Bucharest fell before the German assault: Greece seethed with the
+unhappy mess that Entente diplomacy had made of a great opportunity:
+land and sea registered daily some fresh evidence of Teutonic advance.
+What was wrong?
+
+England speculated, yet one man knew and that man was Lloyd George. He
+realised the futility of a many-headed direction of the war: with his
+swift insight he saw the tragic toll that all this cross purpose was
+taking. He made a demand on Asquith for a small War Council that would
+put dash, vigour and success into the British side of the conflict. The
+Premier refused to assent and Lloyd George resigned as War Chief. The
+Government toppled in a crisis that menaced the very future of the
+nation.
+
+Great Britain stood aghast. Lloyd George stood for all the popular
+confidence in victory that the nation felt. For a moment it appeared as
+if the very foundations of authority had crumbled.
+
+But not for long. When Bonar Law declined to reestablish the Government
+the oft-repeated cry for action that had invariably found its answer in
+the intrepid little Welshman, again rose up. Upon him devolved the task
+of constructing a new Cabinet which he headed as Prime Minister. He now
+reached the inevitable goal toward which he had unconsciously marched
+ever since that faraway day when his voice was first heard in
+Parliament.
+
+Even with Cabinet-making Lloyd George was a Revolutionist. He cut down
+the membership from twenty-four to five, establishing a compact and
+effective War Council whose sole task is to "win the war." He centred
+more authority in the Premiership than the English system has ever known
+before. He virtually became Dictator.
+
+On the other hand, he raised the number of Ministers outside the Cabinet
+from nineteen to twenty-eight. He scattered the coterie of lawyers who
+had so long comprised the Government Trust and put in men with red blood
+and proved achievement--in the main, self-made like himself. He
+installed a trained and competent business man of the type of Sir Albert
+Stanley, raised in the hard school of American transportation, as
+President of the Board of Trade: he drafted a seasoned commercial
+veteran like Lord Rhondda (D. A. Thomas), for President of the Local
+Government Board: he raised his old and experienced aide, Dr.
+Christopher Addison, to be Minister of Munitions: he made Lord Derby,
+who had conducted the great recruiting campaign, Minister of War: he put
+Sir Joseph Maclay, an extensive ship owner, into the post of Shipping
+Controller. Everywhere he supplanted politicians with doers.
+
+What was equally important he continued his role of Conciliator, for he
+placated Labour by giving it a large representation and he took a
+definite step toward the solution of the Irish problem by making Sir
+Edward Carson First Lord of the Admiralty.
+
+Even as he stood at what seemed the very pinnacle of his power Destiny
+once more marked him for its own. He had scarcely announced his Cabinet
+when the world was electrified by the news of the German peace proposal.
+By his own action Lloyd George had placed himself at the head of the
+Council charged with the conduct of the war. To the Wizard Welshman
+therefore was put squarely the responsibility of continuing or ending
+the stupendous struggle.
+
+Never before in the history of any country was such momentous
+responsibility concentrated in an individual. The dramatic element with
+which Lloyd George had become synonymous, found an amazing expression.
+He was ill in bed when the German suggestion was made. No official
+announcement of England's position in reply could be made until he had
+recovered. In the interim the whole world trembled with suspense while
+stock markets shivered. The Premier's name was on every tongue: the eyes
+of the universe were focussed on him. It was indeed his Great Hour.
+
+In what was the most significant speech of his career, and with all the
+force and fervour at his command, he stated the Empire's determination
+to fulfill its obligations to the trampled and ravaged countries. On
+that speech hung the stability of international financial credit, the
+lives of millions of men and the whole future security of Europe.
+
+You have seen the moving picture of a tumultuous life: what of the
+personality behind it?
+
+Reducing the Prime Minister to a formula you find that he is fifty per
+cent Roosevelt in the virility and forcefulness of his character,
+fifteen per cent Bryan in the purely demagogic phase of his makeup,
+while the rest is canny Celt opportunism. It makes a dazzling and
+well-nigh irresistible composite.
+
+It is with Roosevelt that the best and happiest comparison can be made.
+Indeed I know of no more convincing interpretation of the Thing that is
+Lloyd George than to point this live parallel. For Lloyd George is the
+British Roosevelt--the Imperial Rough Rider. Instead of using the Big
+Stick, he employs the Big Voice. No two leaders ever had so much in
+common.
+
+Each is more of an institution than a mere man: each dramatises himself
+in everything he does: each has the same genius for the benevolent
+assimilation of idea and fact. They are both persistent but brilliant
+"crammers." Trust Lloyd George to know all about the man who comes to
+see him whether he be statesman, author, explorer or plain captain of
+industry. It is one of the reasons why he maintains his amazing
+political hold.
+
+Lloyd George has Roosevelt's striking gift of phrase-making, although he
+does not share the American's love of letter writing. As I have already
+intimated, whatever may be his future, Lloyd George will never be
+confronted by accusing epistle. None exists.
+
+Like Roosevelt, Lloyd George is past master in the art of effective
+publicity. He has a monopoly on the British front page. Each of these
+remarkable men projects the fire and magnetism of his dynamic
+personality. Curiously enough, each one has been the terror of the
+Corporate Evil-doer--the conspicuous target of Big Business in his
+respective country. Each one is a dictator in the making, and it is safe
+to assume that if Lloyd George lived in a republic, like Roosevelt he
+would say: "My Army," "My Navy" and "My Policies."
+
+Roosevelt, however, has one distinct advantage over his British
+colleague in that he is a deeper student and has a wider learning.
+
+In one God-given gift Lloyd George not only surpasses Roosevelt but
+every other man I have ever met. It is an inspired oratory that is at
+once the wonder and the admiration of all who hear it. He is in many
+respects the greatest speaker of his day--the one man of his race whose
+utterance immediately becomes world property. The stage lost a great
+star when the Welsh David went into politics. There are those who say
+that he acts all the time, but that is a matter of opinion dictated by
+partisan or self-interest.
+
+Lloyd George is what we in America, and especially those of us born in
+the South, call the "silver-tongued." His whole style of delivery is
+emotional and greatly resembles the technique of the
+Breckenridge-Watterson School. In his voice is the soft melodious lilt
+of the Welsh that greatly adds to the attractiveness of his speech.
+
+Before the public he is always even-tempered and amiable, serene and
+smiling, quick to capitalize interruption and drive home the chance
+remark. He invariably establishes friendly relations with his hearers,
+and he has the extraordinary ability to make every man and woman in the
+audience before him believe that he is getting a direct and personal
+message.
+
+Lloyd George can be the unfettered poet or the lion unleashed. Shut your
+eyes as you listen and you can almost hear the music of mountain streams
+or the roar of rushing cataracts. In his great moments his eloquence is
+little short of enthralling, for it is filled with an inspired imagery.
+No living man surpasses him in splendour of oratorical expression. His
+speeches form a literature all their own.
+
+When, for example, yielding to that persistent Call of Empire for his
+service he interpreted England's cause in the war at Queen's Hall in
+London, in September, 1914, in what was in many respects his noblest
+speech, he said in referring to Belgium and Servia:
+
+"God has chosen little nations as the vessels by which He carries His
+choicest wines to the lips of humanity, to rejoice their hearts, to
+exalt their vision, to stimulate and strengthen their faith; and if we
+had stood by when two little nations were being crushed and broken by
+the brutal hands of barbarism, our shame would have rung down the
+everlasting ages."
+
+In closing this speech which he gave the characteristic Lloyd George
+title of "Through Terror to Triumph," he uttered a peroration full of
+meaning and significance to United States in its present hour of pride
+and prosperity. He said:
+
+
+     "We have been living in a sheltered valley for generations. We have
+     been too comfortable and too indulgent, many, perhaps, too
+     selfish, and the stern hand of fate has scourged us to an elevation
+     where we can see the everlasting things that matter for a
+     nation--the great peaks we had forgotten, of Honour, Duty,
+     Patriotism, and, clad in glittering white, the towering pinacle of
+     Sacrifice pointing like a rugged finger to Heaven.
+
+     "We shall descend into the valleys again; but as long as the men
+     and women of this generation last, they will carry in their hearts
+     the image of those mighty peaks whose foundations are not shaken,
+     though Europe rock and sway in the convulsions of a great war."
+
+
+Now take a closing look at the man himself. You see a stocky, well-knit
+figure, broad of shoulder and deep of chest. The animated body is
+surmounted by a face that alternately beams and gleams. There are
+strength and sensitiveness, good humour, courage and resolution in these
+features. His eyes are large and luminous, aglow at times with the
+poetry of the Celt: aflame again with the fervour of mighty purpose. He
+moves swiftly. To have him pass you by is to get a breath of life.
+
+To all this strength and power he brings undeniable charm. In action he
+is like a man exalted: in repose he becomes tender, dreamy, almost
+childlike. His whole nature seems to be driven by a vast and volcanic
+energy. This is why, like Roosevelt, he has been able to crowd the
+achievements of half a dozen careers into one. He is indeed the Happy
+Warrior.
+
+Yet Lloyd George knows how to play. I have known him to work incessantly
+all day and follow the Ministerial game far into the night. Ten o'clock
+the next morning would find him on the golf links at Walton Heath fresh
+and full of vim and energy. At fifty-three he is at the very zenith of
+his strength.
+
+Why has he succeeded? Simply because he was born to leadership. Without
+being profound he is profoundly moving: without studying life he is an
+unerring judge of men and moods. Volatile, masterful and above all human
+he is at once the most consistent and inconsistent of men.
+
+But it is a new Lloyd George who stepped from unofficial to official
+stewardship of England: a Lloyd George with the firebrand out of his
+being, purged of bitter revolt, chastened and mellowed by the years of
+war ordeal. Out of contact with mighty sacrifice has come a kinship with
+the spirit. He is to-day like a man transformed. "England hath need of
+him."
+
+There are those who see in the new Lloyd George a Conservative in
+evolution. But whatever the political product of this change may be, it
+represents the equipment necessary to meet the shock of peace. For peace
+will demand a leadership no less vigorous than war.
+
+The lowly lad who dreamed of power amid the Welsh Hills is to-day the
+Hope of Empire.
+
+
+
+
+VIII--_From Pedlar to Premier_
+
+
+The great General who once said that war is the graveyard of reputations
+might have added that in its fiery furnace great careers are welded. Out
+of the Franco-Prussian conflict emerged the Master Figure of Bismarck:
+the Soudan brought forth Kitchener and South Africa Lord Roberts. The
+Great Struggle now rending Europe has given Joffre to French history and
+up to the time of this writing it has presented to the British Empire no
+more striking nor unexpected character than William Morris Hughes, the
+battling Prime Minister of Australia--the Unknown who waked up England.
+
+Even to America where the dramatisation of the Self-made Idea has become
+a commonplace thing the story of his rise from pedlar to premier has a
+meaning all its own. Elsewhere in this book you have seen how he stirred
+Great Britain to the post-war commercial menace of the German. It is
+peculiarly fitting therefore that this narrative, dedicated as it is to
+the War after the War, should close with some attempt at interpretation
+of the personality of the man who sounded its first trumpet call.
+
+Like Lloyd George, Hughes is a Welshman. These two remarkable men, who
+have done so much to rouse their people, have more than racial kinship
+in common. They are both undersized: both rose from the humble hearth:
+both made their way to eminence by way of the bar: both gripped popular
+imagination as real leaders of democracy. They are to-day the two
+principal imperial human assets.
+
+Hughes will tell you that he was born frail and has remained so ever
+since. This son of a carpenter was a weak, thin, delicate boy, but
+always a fighter. At school in London he was the only Nonconformist
+around, and the biggest fellows invariably picked upon him. He could
+strike back with his fists and protect his narrow chest, but his legs
+were so thin that he had to stuff exercise books in his stockings to
+safeguard his shins.
+
+Hughes was trained for teaching, and only the restlessness of the Celt
+saved him from a life term in the schoolroom. At sixteen he had become
+a pupil instructor. But the sea always stirred his imagination. He would
+wander down to the East India Docks and watch the ships load with
+cargoes for spicy climes. One day as he watched the great freighters a
+boy joined him. He looked very sad, and when Hughes asked him the reason
+he said he wanted to go home to visit his people, but lacked the money.
+
+"I'll lend you some," said Hughes impulsively.
+
+He went home and out of the lining of an ancient concertina he produced
+thirty shillings, all the money he had in the world. He handed this
+hoard over to his new-found friend and promptly forgot all about it. He
+kept on teaching.
+
+I cite this little episode because it was the turning point in a great
+man's career. The boy who borrowed the shillings went to Australia.
+Several years later he returned the money and with it this message:
+"This is a great country full of opportunity for a young man. Chuck your
+teaching and come out here." Hughes went.
+
+Three months later--it was in 1884--and with half a crown in his pocket
+he walked ashore at Brisbane. He looked so frail that the husky dock
+labourers jeered at his physical weakness. Yet less than ten years from
+that date he was their militant leader marching on to the Rulership of
+all Australia.
+
+In those days Australia was a rough land. Beef, bullying and brawn were
+the things that counted most in that paradise of ticket-of-leave men.
+Hughes bucked the sternest game in the world and with it began a series
+of adventures that read like a romance and give a stirring background to
+the man's extraordinary public achievements.
+
+Hughes found out at once that all hope of earning a livelihood by
+teaching in the bush was out of the question. His money was gone: he had
+to exist, so he took the first job that came his way. A band of
+timber-cutters about to go for a month's sojourn in the woods needed a
+cook, so Hughes became their potslinger. Frail as he was, he seemed to
+thrive on hardship. In succession he became sheep shearer, railway
+labourer, boundary rider, stock runner, scrub-cleaner, coastal sailor,
+dishwasher in a bush hotel, itinerant umbrella-mender and sheep drover.
+
+With a small band he once brought fifty thousand sheep down from
+Queensland into New South Wales. For fifteen weeks he was on the tramp,
+sleeping at night under the stars, trudging the dusty roads all day. At
+the end of this trip occurred the incident that made him deaf. Over
+night he passed from the sun-baked plains to a high mountain altitude.
+Wet with perspiration, he slept out with his flocks and caught cold. The
+result was an infirmity which is only one of many physical handicaps
+that this amazing little man has had to overcome throughout his
+tempestuous life.
+
+Yet he has fought them all down. As he once humorously said: "If I had
+had a constitution I should have been dead long ago."
+
+After all his strenuous bushwhacking the year 1890 found him running a
+small shop in the suburbs of Sydney. By day he sold books and
+newspapers: at night he repaired locks and clocks in order to get enough
+money to buy law books. Into his shop drifted sailors from the wharves
+with their grievances. Born with a passionate love of freedom, these
+sounds of revolt were as music to his ears. Figuratively he sat at the
+feet of Henry George, whose "Progress and Poverty" helped to shape the
+course of his thinking. Lincoln's letters and speeches were among his
+favourites, too.
+
+One night a big dock bruiser grabbed a package of tobacco off the
+counter, but before he could move a step Hughes had caught him under the
+jaw with his fist. His burly associates cheered the game little
+shopkeeper. They now came to him with their troubles and he was soon
+their friend, philosopher and guide.
+
+For years the synonym for Australian Labour was strike. When the unions
+were merged into a national body Hughes was the unanimous choice of the
+husky stevedores for leader. He became the Great Restrainer. Never was
+influence of lip and brain over muscle and temper better demonstrated.
+The wild men of the wharves--the roughest crowd in all labour--were
+under his spell. This nimble-footed shopkeeper flouted them with his
+wit: ruled with his mind.
+
+On a certain occasion five hundred of them were crowded into a building
+at Sydney yelling bloody murder and clamouring for violence. Suddenly
+the tiny figure of Hughes appeared on the platform before them. At
+first they yelled him down, but he stood smiling, resolute, undaunted.
+He began to talk: the tumult subsided: he stepped forward, stamped his
+foot and said in a voice that reached to every corner:
+
+"You shall not strike." And they did not. David had defied the Goliaths.
+
+From that time on Hughes was the Brains of Australian Labour. He
+organised his industrial rough riders into a powerful and constructive
+union. With it he drove a wedge into the New South Wales Legislature and
+gave industry, for the first time, a seat in its Councils. He became its
+Parliamentary Voice. He was only thirty.
+
+Having got his foot in the doorway of public life, he now jammed the
+portal wide open. As trade union official he forged ahead. He became the
+Father Confessor of the Worker. His advice always was: "Avoid violence:
+put your faith in the ballot box." With this creed he tamed the Labour
+Jungle: through it he built up an industrial legislative group that
+acknowledged him as chief.
+
+Though he was rising to fame the struggle for existence was hard. No
+matter how late he toiled in legislative hall or union assembly, he
+read law when he got home. He was admitted to the bar, and despite his
+deafness he became an able advocate. When he had to appear in court he
+used a special apparatus with wire attachments that ran to the witness
+box and the bench and enabled him to hear everything that was going on.
+
+He became a journalist and contributed a weekly article to the Sydney
+_Telegraph_. An amusing thing happened. He noticed that remarkable
+statements began to creep into his articles when published. When he
+complained to the editor he discovered that the linotype operator who
+set up his almost indecipherable copy injected his own ideas when he
+could not make out the stuff.
+
+The limitation of a State Legislature irked Hughes. He beheld the vision
+of an Australian Commonwealth that would federate all those Overseas
+States. When the far-away dominions had been welded under his eloquent
+appeal into a close-knit Union, the fragile, deaf little man emerged as
+Attorney General. At last he had elbow room.
+
+It was due to his efforts that Australia got National Service, an
+Officers' School, ammunition factories, military training for
+schoolboys. They were all part of the kindling campaign that he waged to
+the stirring slogan of "Defence, not Defiance."
+
+Always the friend and champion of Labour, he was in the thick of
+incessant controversy. His enemies feared him: his friends adored him.
+He got a variety of names that ranged all the way from "Bush
+Robespierre" to the "Australian Abraham Lincoln."
+
+The Great War found Hughes the Strong Man of Australia, soon to be bound
+up in the larger Destiny of the Empire.
+
+Even before the Mother Country sent her call for help to the Children
+beyond the seas, Hughes had offered the gallant contingent that made
+history at the Dardanelles. Thanks to him, they were prepared. It was
+Hughes who sped the Anzacs on to Gallipoli: it was Hughes who, on his
+own responsibility, offered fifty thousand men more. These men were not
+in sight at the moment, but the intrepid statesman went forth that very
+day and started the crusade that rallied them at once.
+
+Hughes was moving fast, but faster moved the relentless course of the
+war. Gallipoli's splendid failure had been recorded, the Australians
+stood shoulder to shoulder with their British brothers in the French
+trenches when the opportunity which was to make him a world citizen
+knocked at his door.
+
+In October, 1915, Andrew Fisher resigned the Premiership of Australia to
+become High Commissioner in London, and Hughes was named as his
+successor. The puny lad who had landed at Brisbane thirty years before
+with half a crown in his pocket sat enthroned. The reins of power were
+his and he lost no time in lashing them.
+
+How he divorced the German from Australian trade: how he broke the
+Teutonic monopoly of the Antipodean metal fields and established the
+Australian Metal Exchange and made of it an Imperial institution for
+Imperial revenue only: how he swept England with a torrent of fervid
+oratory rousing the whole nation to its post-war commercial
+responsibilities, are all part of very recent history already woven into
+the fabric of this little volume.
+
+"Reconstruct or decay" was his admonition. Reluctantly the great mass
+of English people saw him leave their shores last summer. Already the
+demand for his recall as unofficial Speeder-up of Patriotism is
+simmering.
+
+What of the man behind this drama of almost unparalleled performance?
+
+To see Hughes in action is to get the impression of a human dynamo
+suddenly let loose. His face is keen and sharp: his mouth thin: his
+cheeks are shrunken: his arms and legs are long and he has a curious way
+of stuffing his clenched fists into his trousers pockets. Some one has
+called him the Mirabeau of the Australian Proletariat. Certainly he
+looks it. He has a nervous energy almost beyond belief. By birth,
+temperament, experience and point of view he is a firebrand, but with
+this difference: he is a Human Flame that reasons.
+
+Only Lloyd George surpasses him in force and fervour of eloquence. He
+has a marvellous trick of expression that never fails to make a winning
+appeal. His speeches are the Bible of the Australian worker, and they
+are fast becoming part of the Gospel of the wide-awake and progressive
+British wage-earner.
+
+Since he was the first Statesman of the Empire to appreciate the grave
+business responsibilities that will come with peace, it is interesting
+to get his ideas on the relation between Trade and Government. In one of
+his impassioned speeches in England he declared:
+
+"The relations between modern trade interests and national welfare are
+so intimate and complex that they cannot be treated as though they were
+not parts of one organic whole. No sane person now suggests that the
+foreign policy of the country should be dealt with by the
+_laissez-faire_ policy. No one would dare openly to contend that the
+national policy should be one of 'drift,' although I admit that there
+are many most excellent persons who by their attitude seem to resent any
+attempt to steer the ship of State along a definite course as being an
+impious attempt to usurp the functions of Providence, whose special
+business they conceive this to be.
+
+"I want to make one thing quite clear, that what I am advocating is not
+merely a change of fiscal policy, not merely or even necessarily what
+is called Tariff Reform--although this may, probably will, incidentally
+follow--but a fundamental change in our ideas of government as applied
+to economic and national matters. The fact is that the whole concept of
+modern statesmanship needs revision. But England has been, and is, the
+chief of sinners. Quite apart from the idea of a self-contained Empire
+there is the idea of Britain as an organized nation. And the British
+Empire as an organized Empire, organised for trade, for industry, for
+economic justice, for national defence, for the preservation of the
+world's peace, for the protection of the weak against the strong. That
+is a noble ideal. It ought to be--it must be--ours."
+
+An extract from another notable address will reveal his gift of words.
+Commenting on the frightful price in human life and treasure that the
+Empire was paying, he said:
+
+"Let us take this solemn lesson to heart. Let us, resolutely putting
+aside all considerations of party, class, and doctrine, without delay,
+proceed to devise a policy for the British Empire, a policy which shall
+cover every phase of our national, economic, and social life; which
+shall develop our tremendous resources, and yet be compatible with those
+ideals of liberty and justice for which our ancestors fought and died,
+and for which the men of our race now, in this, the greatest of all
+wars, are fighting and dying in a fashion worthy of their breeding.
+
+"Let us set sail upon a definite course as becomes a mighty nation to
+whom has been entrusted the destiny of one-fourth of the whole human
+race."
+
+Hughes is the most accessible of men. The humblest wharf-rustler in
+Australia hails him by his first name. A characteristic incident will
+show the comradeship that exists between this leader and his
+constituency.
+
+On his last visit to England he crossed over to France to visit the
+Australian troops at the front. He was walking through a trench
+accompanied by General Birdwood, who is Commander-in-Chief of the
+overseas contingent, and stopped to chat with a group of soldiers who
+had fought at Gallipoli. Suddenly a shell shrieked overhead. A Tommy
+from Sydney yelled to the Premier:
+
+"Duck, Billy, duck!"
+
+Here is practical democracy. Nowhere, in all the varied human side of
+the war, does it find more impressive embodiment than in the self-made
+little Australian whose life is a miracle of progress.
+
+Of such stuff as this are the Builders of the British To-morrow!
+
+
+THE END
+
+
+
+
+
+End of Project Gutenberg's The War After the War, by Isaac Frederick Marcosson
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