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 withbitter strife. Millions of men have been killed or maimed: billions ofdollars in property have gone up in smoke and ruin--all part of themighty sacrifice laid on the Altar of the Great War. 

This tragic tumult must inevitably subside. The smoke of battle willclear: the scarred fields will mantle again with springtime verdure: thefighting hosts will once more find their way to peaceful pursuit. Timethe Healer will wipe out the wounds of war. 

The world already wearies of the Crimson Canvas splashed with martialscene. Heroism has become the most commonplace of qualities: it takes amonster thrill to move a civilisation sick of destruction. With eagereye it looks forward to the era of regeneration. War ends some time. 

Business never ceases. Under the shock of mighty upheaval it has beendislocated by the most drastic strain ever put upon the economicfabric. But it will march on long after Peace will have mercifullysheathed the Sword. Therefore the permanent world problem is theBusiness problem. 

This is why I made two trips to Europe: why I submit this little book inthe hope that it may point the way to some realisation of the immenseresponsibilities which will inevitably crowd upon the world and moreespecially upon the United States. 

Peace will be as great a shock as War. Hence the need of Preparedness tomeet the inevitable conflict for Universal Trade. We--as a nation--areas unready for this emergency as we are to meet the clash of actualphysical combat. Commercial Preparedness is as vital to the nationalwell 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 furyand seen men go to their death smiling and unafraid; when the pitilesspanorama of carnage has passed before you in terms of terror andtragedy, you realise that there is something human as well as economicin the relentless Thing called War. 

It means that just as there was no compromise with dishonour in theapproach to the Super-Struggle for which nations are pouring out theiryouth and fortune, so will there be no flinching in that coming contestfor commercial mastery--the bloodless aftermath of History's deadliestand costliest war. 

We have reached a place in the World Trade Sun. Unless we are ready tohold 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 thegreatest armed host that history has ever known is still locked in alife-and-death struggle on a dozen fronts, another war, more potent andpermanent perhaps than the one which now engulfs Europe, lurks beyondthe distant horizon of peace. 

Its fighting line will be the boundaries of all human needs; its dynamicpurpose a heroic rehabilitation after stupendous loss. It will be thefar-flung struggle for the rich prize of International Trade, waiting atthe 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 andtrench; the animosities fought out to-day with shell and steel will havetheir heritage in ruthless rivalries. 

How shall we fare in this tumult of tariff and treaty? Where shall westand when the curtain of fire fades before a task of regeneration thatwill spell economic rebirth or disaster for millions? Will fiscalpunishment be meted out to neutral and foe alike? Will reason rule orrevenge dictate a costly reprisal in this war after the war?

These are the questions that rise out of the dust and din of thecolossal upheaval which is rending half of the world. Directly orindirectly they touch the whole American people, regardless of rank orwealth. The tide of war has rolled us far upon the shores of worldaffairs. We have prospered in the kinship of the nations. Will the ebbof peace leave us high and dry amid a mighty isolation?

I went to England and France to study this problem at first hand. Iinterviewed Cabinet Ministers; I talked with lawmakers, soldiers, captains of capital, masters of industry, and plain, everyday businessmen. Often the talk was disturbed by shriek of shell or bomb of midnightZeppelin marauder. 

Through all the travail of debt and death that rends the allied peoplesruns the clear current of determination to retrieve the immense loss. War is waste; some one must pay--we among the rest. Already the guns arebeing trained for the inevitable commercial battle, which, willingly orunwillingly, will bring us under fire. Let us examine the plan ofcampaign. 

But before going into the concrete details that mean so much to ourfuture and our fortune, it is important to understand some veryessential conditions. 

First and foremost is the uncertainty of the war itself. Allprophecy--at best a dangerous thing--is purest speculation. No one cantell 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 willemerge 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 shallbe the universal way. 

In the second place, be you Ally or Teuton and regardless of how you mayfeel about the ethics of the Great Struggle, it must be remembered thatbehind 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 jealousiesand fanned by commercial aggressions. 

Now we come to the really vital point, and it is this: When the guns arehushed you will find that national and industrial defence among thewarring countries will be one and the same thing. The Allies learned totheir cost that the economic advance of Germany was merely part of herone-time resistless military machine. Her trade and her preparednesswent conqueringly hand in hand. Henceforth that game will be played byall. England, for instance, will manufacture dyestuffs not only for hertextile trades, but because coal-tar products are essential to themaking of high explosives. 

Thus, Competition, which was once merely part of the natural progress ofa country, will hereafter be a large part of the struggle for nationalexistence. 

There is still another factor: No matter who wins, peace must meanprosperity for everybody. For the victor it will take the form of anattempted stewardship of trade and navigation; for the vanquished itwill be the dedication of a terrible energy to the twin restoration ofpride and product. 

Now you begin to see why it is up to the United States to make ready forwhatever business fate awaits her beyond the uncertain frontiers ofto-morrow. Nor have we been without warning of what may be in store forus. Prohibitive tariffs, blacklists and boycotts, embargoes on mail andcargo, the exclusion from England and France of hundreds of ourmanufactured articles--all show which way the international trade windsmay 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 theworld. From the Tyne to the Thames her factories hummed with ceaselessindustry. Her goods went wherever her ships steamed, and that meant theglobe. Supreme in her insularity--at once her defence and herundoing--she became infected with the virus of content. Her steel wasthe best steel; her wares led all the rest. "Take it or leave it!" washer selling maxim. When devices came along that saved labour andincreased production she refused to scrap the old to make way for thenew. Born, too, was the evil of restricted output. Moss began to grow onher vaunted industrial structure. England lagged in the tradeprocession. 

But as she lagged the assimilative German streamed in through herhospitable door. He served his apprenticeship in British mills; tookhome the secrets and methods of British art and craft. He geared them tocheap labour, harnessed product to masterful distribution, and became aWorld Power. Before long he had annexed the dye trade; was competingwith British steel; was making once-cherished British goods. 

What the German did in England he duplicated elsewhere. The world ofideas was his field and, with insatiate hunger, he garnered them in. Hecunningly acquired the sources of raw supply, especially the essentialsto national defence; for he overlooked nothing. All was grist to hismills. He pitched his tents upon debatable trade lands. His rivalscalled it economic penetration, because he invariably took root. For himit was merely good business. 

Then England suddenly realised that Germany had left her behind in therace for international commerce. Indifference lay at the root of thisbacksliding. It was easier and cheaper to buy the German-made productand reship it than to produce the same article at home. Sloth hung likea chain on English energy. What did it matter? No forest of bayonetshemmed her in; she was still Mistress of the Seas. 

Meantime Germany dripped with efficiency and ached with expansion. Heramazing teamwork between state and business, stimulated by an interestedfinance, drove her on to a place in the sun. The shadows seemed far awaywhen the great war crashed into civilisation. Then England woke to thefolly of her blindness. The mystery of coal-tar products was shut up ina German laboratory; the secrets of tungsten, necessary to the tougheststeel, were imprisoned in a Teutonic mill; and so on down a long list ofproducts vital to industry and defence. 

Even those early and tragic reverses of the war did not stir the stolidBritish bulk. Men fought for a chance to fight; restriction stilloppressed factory output. Red tape vied with tradition to block the pathof military and industrial preparation. 

Then the Lion stirred; the sloth fell away; men and munitions wereenlisted; the strong hand was put on labour tyranny; conscriptionsucceeded the haphazard voluntary system. Britain got busy and she hasbuzzed ever since. 

When the kingdom had become a huge arsenal; when the old sex differencesvanished under the touchstone of a common peril; when the first khakihost swept to its place in the battle line, and the grey fleets wereonce more queens of the seas, England turned to the task of commercialrebuilding, once neglected, but thenceforth to be part and parcel ofBritish purpose. 

Animating this purpose, stirring it like a vast emotion, was the NewBattle 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 Englandyou 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 wasan armed camp before the realisation of what might happen commerciallyafter the war soaked into the average islander's consciousness. 

Under the impassioned eloquence of Lloyd George the munition workers hadbeen marshalled into an inspired working host; with the magic ofKitchener's name, the greatest of all voluntary armies came into being. But it remained for Hughes, of Australia, to point out the fresh pathfor the feet of the race. 

Who is Hughes, of Australia? You need not ask in England, for the storyof his advent, the record of his astounding triumph, the thrillingmessage that he left implanted in the British breast, constitute one ofthe 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 MotherLioness sent out the world call to her cubs beyond the seas there wasswift response from the men of bush and range. The world knows what theAnzacs did in the Dardanelles; how they registered a monster heroism onthe rocky heights of Gallipoli; gave a new glory to British arms. 

England rang with their achievements. What could she do to pay tributeto their courage? Hughes was their national leader and spokesman; so thePolitical Powers That Be said:

"Let us invite the Premier to sit in the councils of the empire andadvise us about our future trade policy. "

Already Hughes had declared trade war on Germany in Australia. Under hisleadership every German had been banished from commonwealth business; bya special act of Parliament the complete and well-nigh war-proofTeutonic control of the famous Broken Hill metal fields had beenannulled. He stood, therefore, as a living defiance to the renewal ofall commercial relations with the Central Powers. But he went furtherthan this: He decreed trade extermination of the enemy--merciless warbeyond the war. 

With his first speech in England Hughes created a sensation. Before hecame commercial feeling against Germany ran high. Hughes crystallised itinto a definite cry. He said what eight out of every ten men in thestreet were thinking. His voice became the Voice of Empire. Up and downEngland and before cheering crowds he preached the doctrine of trade warto the death on Germany. He denounced the laxness that had permitted the"German taint to run like a cancer through the fair body of Englishtrade"; he urged complete economic independence of the Dominions. Hispersistent plea was, "We must have the fruits of victory"; and thosefruits, he declared, comprised all the trade that Germany had hithertoenjoyed, and as much more as could be lawfully gained. 

He urged that the blood brotherhood of empire, quickened by thatdramatic S. O. S. Call for men across the sea and cemented by the commontrench hazard, be followed by a union of empire after the war thatshould be self-sufficient. Behind all this eloquent talk of protectionand prohibition lay the first real menace to America's new place as aworld trade power. It was the opening call to arms for the war after thewar. 

Hughes did more than set England to thinking in imperial terms. He upsetmost of the calculations of the Powers That Be who invited him. Theyexpected an amiable, able and plastic counsellor; they got an oratoricallive wire, who would not be ruled, and who shocked deep-rootedfree-trade convictions to the core. He helped to launch a whole new eraof thought and action; and the next chapter of its progress was now tobe recorded under circumstances pregnant with meaning for the wholeuniverse of trade. 

The second winter of war had passed, and with it much of the dark nightthat enshrouded the Allies' arms. On land and sea rained the first blowsof the great assaults that were to make a summer of content for theEntente cause. Its arsenals teemed with shells; its men were fit;victory, however distant, seemed at last assured. The time had come toprepare a new kind of drive--the combined attack upon enemy trade andany other that happened to be in the way. 

Thus it came about that on a brilliant sun-lit day last June twoscoremen sat round a long table in a stately room of a palace that overlookedthe Seine, in Paris. Eminent lawmakers--Hughes, of Australia, amongthem--were there aplenty; but few practical business men. 

On the walls hung the trade maps of the world; spread before them werethe red-dotted diagrams that showed the water highways where trafficflowed in happier and serener days. For coming generations of businesseverywhere it was a fateful meeting because the now famous EconomicConference of the Allies was about to reshape those maps and change thechannels of commerce. 

All the while, and less than a hundred miles away, Verdun seethed withdeath; still nearer brewed the storm of the Somme. 

These men were assembled to fix the price of all this blood andsacrifice, and they did. In what has come to be known as the Paris Pactthey bound themselves together by economic ties and pledged themselvesto present a united economic front. They unfurled the banner ofaggressive reprisal with the sole object of crushing the one-timebusiness supremacy of their foes. 

The chief recommendations were: To meet, by tariff discrimination, boycott or otherwise, any individual or organised trade advance of theCentral Powers--already Germany, Austria, Turkey and Bulgaria havereached a commercial understanding; to forego any "favoured-nation"relation with the enemy for an indefinite period; to conserve forthemselves, "before all others, " their natural resources during theperiod of reconstruction; to make themselves independent of enemycountries in the raw materials and manufactured products essential totheir economic well-being; and to facilitate this exchange bypreferential trade among themselves, and by special and state subsidiesto shipping, railroads and telegraphs. Another important decreeprohibits the enemy from engaging in certain industries and professions, such as dyestuffs, in allied countries when these industries relate tonational defence or economic independence. 

In short, self-sufficiency became the aim of the whole allied group, tobe achieved without the aid or consent of any other nation or group ofnations, be they friends or foes. 

Here, then, is the strategy that will rule after the war. A huge alliedmonopoly is projected--a sort of monster militant trust, with cabinetsof ministers for directorates, armies and navies as trade scouts, andwhole roused citizenships for salesmen. 

Throughout this new Bill of World Trade Rights there is scant mention ofneutrals--no reference at all to the greatest of non-belligerentnations. Yet the document is packed with interest, fraught even withhighest concern, for us. Upon the ability to be translated intooffensive and defensive reality will depend a large part of our futureinternational commercial relations. 

Is the Paris Pact practical? Will it withstand the logical pressure ofbusiness demand and supply when the war is ended? How will it affectAmerican trade?

To try to get the answer I talked with many men in England and Francewho were intimately concerned. Some had sat in the conference; othershad helped to shape its approach; still others were dedicated to itsfar-spreading purpose. I found an astonishing conflict of opinion. Eventhose who had attended this most momentous of all economic conferenceswere sceptical about complete results. Yet no one questioned the intentto smash enemy trade. Will our interests be pinched at the same time?

Regardless of what any European statesman may say to the contrary, onededuction of supreme significance to us arises out of the wholeproposition. Summed up, it is this:

Mutual preference by or for the members of either of the great Europeanalliances automatically creates a discrimination against those outside!Whether we face the Teuton or the Allies' group--or both--in the grandeconomic line-up, we shall have to fight for commercial privileges thatonce knew no ban. 

There are two well-defined beliefs about the practical working out ofthe pact as a pact. Let us take the objections first. They findexpression in a strong body of opinion that the whole procedure is bothunhuman and uneconomic--a campaign document, as it were, conceived inthe heat and passion of a great war, projected for political effect incementing the allied lines. In short, it is what business men would calla glorified and stimulated "selling talk, " framed to sell good willbetween the nations that now propose to carry war to shop and mill andmine. 

"But, " as a celebrated British economist said to me in London, "whileall this talk of Economic Alliance sounds well and is serving itspurpose, the fact must not be overlooked that, though war ends, businesskeeps right on. Self-interest will dictate the policy that pays thebest. " This is a typical comment. 

Now we get to the meat of the matter: By the terms of the pact half adozen important nations--to say nothing of the smaller fry--are bound toa hard-and-fast trade agreement. Business, in brief, is projected interms of nations. 

Go behind this new battle front and you will find that it conflicts withan uncompromising commercial rule. Why? Simply because, so far asbusiness is concerned, nations may propose, but human beings dispose. Individuals, not countries, do business! Being human, these individualsare apt to follow the line of least resistance. Hence, the best-laidplans for imposing international industrial teamwork are likely tofounder on those weaknesses of human nature that begin and end in thepocketbook. 

After the Franco-Prussian War of 1870-71, and while the Peace ofVersailles was being negotiated, commercial travellers of each nation, laden with samples, filled the border villages, ready to dash across thefrontier and open accounts. Of course no one dreams that such historywill repeat itself after the present war; but there are many persons inEngland and France to-day who contend that the business needs of peacewill be stronger than the costly hang-over of wartime passions. 

Trade, after all, is a Colossus that rests with one foot upon Necessityand 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 beimpoverished by years of drain and waste. As a result, they will bepoorer customers for each other, but very sharp competitors. International trade is merely an exchange of goods for goods. You cannotsell without buying, and vice versa. No groups of nations can live bytaking in each other's washing. They are bound to get outside linen. When peace comes we shall have the lending and purchasing power of theworld. Can anybody afford to shut us out?

Again: Can the Allies present a united front or carry on a uniform lineof conduct? Will not their interests overlap and cause an inevitableconflict, even when intentions are of the very best?

France, for example, competes with England in chemicals, surgicalinstruments, high-speed tools, scores of things; Russia's competitors inwheat are not Germany, but Canada, India and Australia; Italy and Franceare rivals for the same wine markets. Russia for years has kept down thehigh cost of her living by buying cheap German goods at her front doorand having her projects financed by German capital. Will she facebankruptcy by going hundreds--even thousands--of miles out of her wayand paying more for products? England for years has made huge profitsout of the re-export of Teutonic articles, thanks to the grace of freetrade and huge carrying power. Is she likely to forego all this?

In the last analysis Propinquity and the Purse are the Mothers of TradeAlliance. 

Finally, will not any organised exclusion of German products, coupledwith a definite and organised campaign to throttle German trade theworld over, throw the business of the Kaiser's country smack into thelap of the United States? Sober reflection over these possibilities maystay economic reprisal. 

On the other hand, there are many ways by which even a near translationof the economic pact into actuality may work hardship--even disaster--toAmerican commercial interests. No matter which way we turn when peacecomes we shall face the proverbial millstones in the shape of two greatalliances. One is the Allied Group, jealous of our new wealth and worldpower, bitter with the belief that we have coined gold out of agony; theother is the Teutonic Union, smarting because of our aid to itsenemies, stinging under reverses, mad with a desire to recuperate. 

Examine our trade relations with warring Europe and you see howhazardous a shift in old-time relations would be. To the fightingpeoples and their colonies in normal times we send nearly seventy-eightper cent of our exports, and from them we derive seventy per cent of ourexports. The Allies alone, principally England and her colonies, getsixty-three per cent of these exports and send us fifty-four per cent ofall 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 thepart of either group of the Allies, and particularly on the part of theEntente Allies, may seriously affect the domestic prosperity of theUnited States, in which foreign trade is a vital element. "

Why is this foreign trade so vital? Because, during these last two yearsof world upheaval we have rolled up the immense favourable trade balanceof over three billion dollars. In peace time this would be paid for inmerchandise. But fighting Europe's industries, with the exception of apart of England's, are mobilised for munitions. Therefore, these goodshave been paid for largely in gold. 

This gold is now part of our basis of credit. When the war ends Europewill make every effort that ingenuity, backed up by trade resource, candevise to get that gold back. One way is through loans from us; theother is by exports to us. Now you see why we must maintain our foreigncommerce. 

Our huge gold reserve hides another menace: The war demands for ourcommodities, paid for with the yellow metal, have increased the cost ofproduction; and it will stay up. This will lead to an unequalcompetition with the cheap labour markets of Europe when the war isover. Both groups of Allies will be able to undersell us. 

Turn to the raw materials and you encounter a further danger in theeconomic pact. If the Allies develop their own sources, it will cut downour export of cotton, copper and oil. If they cannot develop sufficientsources for self-supply they may, through co-operative buying outsidetheir dominions, satisfy their needs. In the third place, they maystimulate, through tariff or shipping concessions, or bysubsidies--which are much talked of in Europe to-day--a preference fortheir own manufactures over American products in both allied and neutralmarkets. 

Take navigation: England controls an immense shipping. As a matter offact, outside the three-mile limit, she practically owns the waters ofthe world. If she makes lower rates for her allies, or others to whomshe gives preference, where shall we be in our chronic and unpardonabledependence upon foreign bottoms? Here is where we shall pay the pricefor neglecting our merchant marine. 

Still another menace to our trade lies in preferential alliances betweenMother Countries and their colonies, which is part of the projectedprogramme. Our next-door neighbour, Canada, has just given anilluminating instance of what may be in store for us. A Co-operativeExport Association has been formed in the Dominion to get businessthroughout the British Empire and the other allied nations. In thecircular announcing its organisation it declares that "the products ofCanada will be preferred against the products of her great neutralcompetitor, the United States, who has stayed outside of the war and hasborne no sacrifice of life and money made by the allied countries. "

Return to the economic pact again and you find that it continues tobristle with dangerous possibilities for us. You will recall that one ofthe clauses forbids the resumption of a favoured-nation arrangement withenemy countries for a period "to be fixed by mutual agreement. " This maybe for an indefinite time. 

Now the danger here lies in the European interpretation of thefavoured-nation idea. To quote an authority: "Most of these countrieshave treaties under which each must grant most-favoured-nation treatmentto the other; and this means that a reduction in duties granted to onecountry is automatically extended to all other countries with whom suchtreaties exist. The result is that the lowest rate in any treatybecomes, with exception, the rate extended to all countries. "

We have the favoured-nation relation with many European countries, andherein lies the possible danger: The war automatically annulled alltreaties between belligerents. When the day of treaty making comes againshall we suffer for the sins of friend and foe in the rearrangement ofinternational trade and lose some precious commercial privileges? It isworth thinking about. 

II--_England Awake_

Meantime, regardless of how the economic pact works out, England'spolicy is "Deeds, not Words, " as she prepares for the time when normallife and business succeed the strain and frenzy of fighting days. 

No man can range up and down the British Isles to-day without catchingthe thrill of a galvanic awakening, or feeling an imperial heartbeatthat proclaims a people roused and alive to what the future holds andmeans. The kingdom is a mighty crucible out of which will emerge a newEngland determined to come back to her old industrial authority. It iswith England that our commerce must reckon; it is English competitionthat 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 shewill rise as an empire or sink to a second-rate nation. "

In the second place, as all hope of indemnity fades, England realisesthat she will not only have to pay all her own bills but likewise someof the bills of her allies. Already her millions have been poured intothe allied defence; many more must follow. 

Hence, the relentless energy of her throbbing mills; the searchingappraisal of her resources; the marshalling of all her genius of tradeconquest. Dominating all this is the kindling idea of a self-containedempire, linked with the slogan: "Home Patronage of Home Product. " Thewar found her unprepared to fight; she is determined that peace shallsee her fit for economic battle. 

This is what she is doing and every act has a meaning all its own forus. Take Industry: Forty-eight hundred government-controlled factories, working day and night, are sending out a ceaseless flood of warsupplies. The old bars of restricted output are down; the old sexdiscrimination has faded away. Women are doing men's work, getting men'spay, making themselves useful and necessary cogs in the productivemachine. They will neither quit nor lose their cunning when peacecomes. 

I have watched the inspiring spectacle of some of these factories, havewalked through their forest of American-made automatics, heard the humof American tools as they pounded and drilled and ground the instrumentsof death. What does it signify? This: that quantity output of shot andshell for war means quantity output of motors and many other productsfor peace. You may say that quantity output is a matter of temperamentand that the British nature cannot be adapted to it; but speeded-upmunitions making has proved the contrary. The British workman haslearned to his profit that it pays to step lively. High war wages haveaccustomed him to luxuries he never enjoyed before, and he will not givethem up. Unrestricted output has come to stay. 

Five years ago the efficiency expert was regarded in England as anintruder and a quack; to use a stop watch on production was high crimeand treason. To-day there are thousands of students of business scienceand factory management. In the spinning district girls in clogs sitalongside their foremen listening to lectures on how to save time andenergy in work. Scores of old establishments are being rebornproductively. There is the case of a famous chocolate works that beforethe war rebuffed an instructor in factory reorganisation. Last year itsaw the light, hired an American expert, and to-day the output has beenincreased by twenty-five per cent. 

The infant industries, growing out of the needs of war and the desire ofself-sufficiency, are resting on the foundations of the new creed. "Speed up!" is the industrial cry, and with it goes a whole new schemeof national industrial education. The British youth will be taught atrade almost with his A-B-C's. 

Formerly in England the standardisation of plan and product was almostunknown. For example, no matter how closely ships resembled each otherin 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 ofships in the stress of hungry war demand will be true of scores ofarticles for trade afterward. The old rule-of-thumb traditions thathampered expansion have gone into the discard, along with voluntarymilitary service and the fetish of free trade. 

Typical of the new methods is the standardisation of exports, which haveincreased steadily during the past year. In a room of the Building ofthe Board of Trade, down in Whitehall, and where the whole tradestrategy of the war is worked out, I saw a significant diagram, streakedwith purple and red lines, which shows the way it is done. The purpleindicated the rosters of the great industries; the red, the number ofmen recruited from them for military service. No matter how the battlelines yearn for men, the workers in the factories that send goods acrossthe sea are kept at their task. This diagram is the barometer. Forexports keep up the rate of exchange and husband gold. 

England is creating a whole new line of industrial defence. Themanufacture of dyestuffs will illustrate: This process, which originatedin England, was permitted to pass to the Germans, who practically got aworld monopoly in it. Now England is determined that this and similardependence must cease. 

For dyemaking she has established a systematic co-operation among state, education and trade. In the University of Leeds a department in colourchemistry and dyeing has been established, to make researches and togive special facilities to firms entering the industry, all in thenational interest. A huge, subsidised mother concern, known as BritishDyes, Limited, has been formed, and it will take the place of the greatdye trust of Germany, in which the government was a partner. 

This procedure is being repeated in the launching of an optical-glassindustry; this trade has also been in Teutonic hands. I could cite manyother instances, but these will show the new spirit of Britishcommercial enterprise and protection. 

Everywhere nationalisation is the keynote of trade activity. Coalfurnishes an instance: The collieries of the kingdom not only stoke thefires of myriad furnaces but drive the ships of a mighty marine. Throughher control of coal England has one whip hand over her allies, for manyof the French mines are in the occupied districts, and Italy's supplyfrom Germany has stopped. Coal means life in war or peace. Now Englandproposes a state control of coal similar to that of railroads. 

It spells fresh power over the neutral shipping that coals at Britishports. If the government controls the coal it will be in a position tostipulate the use that the consumer shall make of it, and require him tocall for his return cargo at specified ports. Such supervision in warmay mean similar domination in peace--another bulwark for Britishcontrol of the sea. 

Throughout England all trade facilities are being broadened andbettered. The local Chambers of Commerce, whose chief function for yearswas solemnly to pass resolutions, have stirred out of their slumbers. The Birmingham body has formed a House of Commerce to stimulate anddevelop the commerce of the capital of the Midlands. 

This stimulation at home is accompanied by a programme of tradeextension abroad. The Board of Trade has granted a licence to theLatin-American Chamber of Commerce in Great Britain, formed to promoteBritish trade in Central and South America and Mexico. Sections of thechamber are being organised for each of the important trades andindustries in the kingdom, and committees named to enter intonegotiations with every one of the Latin-American republics, whereoffices will be established in all important towns. 

The Board of Trade has also learned the lesson of co-operation forforeign trade. As one result, British syndicates, composed of smallmanufacturers, who share the overhead cost, are forming to open up newmarkets the world over. These syndicates correspond with the familiarGerman Cartel, which did so much to plant German products wherever thesun shone. 

England, too, has wiped out one other block to her trade expansion: Foryears many of her consuls were naturalised Germans. Many of them weretrustworthy public servants. Others, true to the promptings of birth, diverted trade to their Fatherland. To-day the Consular Service ispurged 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 sinewof 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, andwhich will not conflict with the work ordinarily done by thejoint-stock, colonial and British foreign banks. It will do for Britishforeign trade what the huge German combinations of capital did so longand so effectively for Teuton commerce. Furthermore, it will make aclose corporation of finance and trade, with the government sitting inthe board of directors and lending all the aid that imperial support canbestow. 

The bank will be capitalised at fifty million dollars. It will notaccept deposits subject to call at short notice, which means constantmobilisation of resources; it will open accounts only with those whopropose to make use of its oversea machinery; it will specialise incredits for clients abroad, and it will become the centre of syndicateoperations. One of its chief purposes, I might add, will be to enablethe British manufacturer and exporter to assume profitably the longcredits so much desired in foreign trade. 

From the confidential report of its organisation let me quote oneilluminating 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 fairto assume that women will in the future take a considerable share inpurely clerical work, and this fact will enable the institution to takefuller advantage of the qualifications of its male staff to push itsaffairs in every quarter of the globe. Youths should not be engagedwithout a language qualification, and after a few years' training theyshould be sent abroad. It could probably be arranged that associatedbanks abroad would agree to employ at each of their principal branchesone of the Institution's clerks, not necessarily to remain there for anindefinite period, but to get a knowledge of the trade andcharacteristics of the country. Such clerks might in many cases severtheir connection with the banks to which they were appointed and startin business on their own account. They would, however, probably lookupon the institution as their 'Alma Mater, ' Every endeavour should bemade to promote _esprit de corps_; and where exceptional ability isdeveloped it should be ungrudgingly rewarded. If industry is to beextended it is essential that British products should be _pushed_; andmanufacturers, merchants and bankers must combine to push them. It isbelieved that this pushing could be assisted by the creation of a bodyof young business men in the way above described. "

The scope and purpose of this British Trade Bank suggest another EastIndia Company with all the possibilities of gold and glory whichattended that romantic eighteenth-century enterprise. Perhaps anotherClive or a second Hastings is somewhere in the making. 

That the British Government proposes to follow the German lead anddefinitely go into business--thus reversing its tradition of aloofnessfrom financial enterprise--is shown in the new British and ItalianCorporation, formed to establish close economic relations betweenBritain and Italy. It starts a whole era in British banking, for itmeans the subsidising of a private undertaking out of national funds. 

It embodies a meaning that goes deeper and travels much farther thanthis. Up to the outbreak of the great war Germany was the banker ofItaly. Cities like Milan and Rome were almost completely in the grip ofthe Teutonic lender, and his country cashed in strong on this surest andhardest of all dominations. This was the one big reason why the Italiandeclaration of war against Germany was so long delayed. With this newbanking corporation England not only supplants the German influence butforges the economic irons that will bind Italy to her. 

The capital of the British and Italian Corporation is nominally onlyfive million dollars. The government, however, agrees to contributeduring each of the first ten years of its existence the sum of twohundred and fifty thousand dollars. Though imperial stimulation of tradeis one of its main objects, this institution is not without its largerpolitical value. As this and many other similar enterprises show, politics and world trade, so far as Great Britain is concerned, willhereafter be closely interwoven. 

Throughout all this British organisation runs the increasing purpose ofan Empire Self-Contained. Whether that phase of the Paris Pact whichcalls for development and mobilisation of natural resources sees thelight of reality or not, Britain is determined to take no chances forher own. She is scouring and searching the world for new fields and newsupplies. She is planning to increase her tea and coffee growing inCeylon 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 herrealise 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 partialcarrying out of this far-flung plan is bound seriously to affect ourwhole export business. 

You have seen how this self-contained idea may work abroad. Go back toEngland and you find it forecasting an agricultural revolution that maybe one of the after-war miracles. 

For many years England has raised about twenty per cent of her wheatsupplies. One reason was her dependence on grass instead of arable land;another was the inherent objection of the British farmer to adoptscientific methods of soil cultivation or engage in co-operativemarketing. 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 theultimate consumer. Denmark did some of this awakening. England dependedupon her for enormous supplies of bacon, cheese, butter and eggs. Whenthe war broke out and the ring of steel hemmed Germany in, thespeculative prices offered by the Fatherland were too much for thelittle domain. Holland also "let down" her old customer, poured her foodinto Germany, and fattened on immense profits. Norway and Sweden, whichwere also important sources of more or less perishable British foodsupplies, have done the same thing. When peace comes you may be surethat England will have a reckoning. 

This scarcity of food, coupled with the incessant sinking of supplyships by enemy submarines, the rigid censorship of imports, and allthose other factors that bring about the high cost of war, has made theEnglishman sit up and take notice of his agricultural plight. 

"We must grow more of our food, " is the new determination. To achieve itplans for collective marketing, for intensive farming, for co-operativeland-credit banks, are being made. The gentleman farmer will become aworking farmer. 

England's gospel of self-sufficiency has a significance for us thatextends far beyond her growing independence in foodstuffs and rawmaterials. It is fashioning a weapon aimed straight at the heart of ouroverseas industrial development. 

Most people who read the newspapers know that many articles of Americanmake, ranging from bathtubs to motor cars, have been excluded fromEngland. The reasons for this--which are all logical--are the necessityfor cutting down imports to protect the trade balance and keep the goldat home; the need of ship tonnage for food and war supplies; and thecampaign to curtail luxury. 

Admirable as are these reasons, there is a growing feeling amongAmericans doing business in England that this wartime prohibition, whichis part of the programme of military necessity, is the prelude to a morepermanent, if less drastic, exclusion when peace comes. 

Habit is strong with Englishmen, and the shrewd insular manufacturer hasbeen quick to see the opportunities for advancement that lie in thisclosed-door campaign. 

"Get the consumer out of the habit of using a certain American productduring the war, " he argues, "and when the war is over--even before--hewill be a good 'prospect' for the English substitute. "

Here is a concrete story that will illustrate how the exclusion worksand what lies behind:

Last summer a certain well-known American machine, whose gross annualbusiness in Great Britain alone amounts to more than half a milliondollars a year, was suddenly denied entrance into the kingdom. When themanaging director protested that it was a necessity in hundreds ofBritish 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 overone 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 readyresponse. 

This staggered the official. After a long discussion the directorreceived 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 certaindepartment in the Board of Trade, sold two, and got them installed andworking before he next appeared before the Trade Censors, who, by theway, knew absolutely nothing at all about the article they wereprohibiting. The first question popped to him was:

"Are machines like yours made in England?"

"Yes, " replied the director; "but they have never been practical orcommercial. "

Then he produced the record of the machines he had sold to thegovernment. Each one saved the labour of eight persons and considerableoffice space. This made a distinct impression and the company gotpermission to import two hundred tons of their product. But not even anapplication for more can be filed until the first of next year. Only thedire necessity for this article, coupled with the fact that it iswithout British competition, got it over. 

I cite this incident to show what many Americans in England believe tobe one of the real reasons behind the prohibition, which, summed up, issimply this: England is trying to keep out everything that competes withanything 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. Thenfollowed an ad-valorem duty of thirty-three and a third per cent. Despite this handicap, agents were able to sell American machines, whichwere both popular and serviceable. The tariff was imposed ostensibly tocut down imports, but mainly to please the British motor manufacturers, who claimed that the surrender of their factories to the government formaking munitions left the automobile market at the mercy of the Americanproduct, which meant loss of goodwill. 

Subsequently a complete embargo was placed on the entry of Americanpleasure cars and the business practically came to a standstill. What isthe result? Let the agent of a well-known popular-priced American cartell his story. 

"Before the war and up to the time of the embargo, " he said, "I wasselling a good many American automobiles. With the embargo on cars alsocame a prohibition of spare parts. It was absolutely impossible to getany into the country. Many of my customers wanted replacements, and, when I could not furnish them, they abandoned the cars I sold them andbought English-made machines whose parts could be replaced. "

All through the motor business in England I found a strong dispositionon the part of the British manufacturer and dealer to create a marketfor his own car as soon as the war is over. Some even talked of a largeoutput of low-priced machines to meet the competition of the familiarcar that put the automobile joke on the map. The only American comebackto this growing prejudice is to build factories or assembling plantswithin the British Isles. This will save excessive freight rates, keepdown the costly-tariff "overhead, " and get the benefit of all thegoodwill accruing from the employment of British labour. 

A by-product of British exclusion is the inauguration of aMade-in-England campaign. Buy a hat in Regent Street or Oxford Streetand 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 behindit. 

This same spirit dominates newspaper publicity. You find a Britishfountain pen glowingly proclaimed in a big display advertisement, illustrated with the picture of men trundling boxes of gold down to awaiting steamer. Alongside are these words:

"The man who buys a foreign-made fountain pen is paying away gold, evenif the money he hands across the counter is a Treasury note. The Britishshop may get the paper; the foreign manufacturer gets gold for all thepens he sends over here. What is the sense of carrying an emptysovereign-purse in one pocket if you put a foreign-made fountain pen inanother?"

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 ofopinion headed by brilliant men who have bidden farewell to theHands-Across-the-Sea sentiment; who have little faith in the theory thatblood is thicker than water when it comes to a keen commercial clash. 

What of the human element behind the whole British awakening? Willorganised labour, an ancient sore on the British body, rise up andcomplicate these well-laid schemes for economic expansion? As with thequestion of practicability of the Paris Pact, there is a wide differenceof opinion. 

On one hand, you find the air full of the menace of post-warunemployment and the problem of replacing the woman worker by the manwho went away to fight. To offset this, however, there will be theundoubted scarcity of male help due to battle or disease, and theinevitable 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 theexception, among the English artisans. England's frenzied desire foreconomic authority proclaims a job for everybody. 

I asked a member of the British Cabinet, a man perhaps better qualifiedthan any other in England to speak on this subject, to sum up the wholeafter-war labour situation, as he saw it, and his epigrammatic replywas:

"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 fullshare of profits. As one large manufacturer told me: "We have so gotteninto the habit of turning our profits over to the government that itwill be easy to divide with our employees. " Here may be the panacea forthe whole English labour ill. 

But, whatever may be the readjustment of this labour problem, one thingis certain: Peace will find a disciplined England. The five million men, trained to military service, will dominate the new English life; andthis means that it will be orderly and productive. 

With this discipline will come a democracy--social and industrial--suchas England has never known. The comradeship between peer and valet, master and man, born of common danger under fire, will find renewal, inpart at least, when they go back to their respective tasks. This wipingout of caste in shop, mill and counting room will likewise remove one ofthe old barriers to the larger prosperity. 

England wants the closest trade relations with her Dominions. But willthe Colonies accept the idea of a fiscal union of empire, whichpractically means intercolonial free trade? Or will they want toprotect their own industries, even against the Mother Country? Like theFrench, they are willing to risk life and limb for a cause, but theylikewise want to guard jealously their purse and products. They have notforgotten the click when Churchill locked the home door against them. 

This leads to the question that is agitating all England: Will peacebring tariff reform? Both English and American economic destiny will beaffected by the decision, whatever it may be. 

Canvass England and you encounter a widespread movement that means, asthe advocates see it, a broadening of the home market; security for theinfant "key" industries; a safeguard for British labour--in short, theend of the old inequality of a Free England against a Protected Germany. 

Protection in England, hitched to a world-wide freeze-out businesscampaign against Germany, would doubtless divert a whole newinternational discount business to New York. German exporters underthese circumstances might refuse payments from their other customers onLondon, demanding bills on New York instead. To hold this business, however, we should need direct banking and cable connections with allthe grand divisions of trade, adequate sea-carrying power, dollarcredits, and a government friendly to business. 

Then, there is the middle English ground which demands a "tariff forrevenue only, " and subsidy--not protection--for the new industries. 

Combating all this is the dyed-in-the-bone free trader, who points tothe fact that free trade made England the richest of the Allies and gaveher control of the sea. "How can a nation that is one huge seaport, andwhich lives by foreign trade, ever be a protectionist?" he asks. 

If he has his way we shall have to struggle harder for our share ofuniversal business. More than this, it will block what is likely to beone of Germany's schemes for rehabilitation. Here is the possibleprocedure:

Germany's financial position after the war will be badly strained. Shecan be saved only by an effective export policy. To do this she mustseek all possible neutral markets; and to get them quickly she willoffer broad--even extravagant--reciprocity programmes. They may conflictwith the proposed Franco-British programmes of protection and embargoagainst neutral trade interests. 

But if the Franco-British programme leaves the allied markets for goodsand money open, as before the war, the German reciprocity scheme willfail of its effect by the sheer force of natural competition. HenceEngland can throttle the re-establishment of German credit by a free andliberal trade policy, open to all the world. Though poor, after the warshe can actually be stronger, in view of her great army and navy, hernew 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 naturalisedcitizens of Holland, Spain, Switzerland and Denmark; building factoriesthere and shipping the product into the enemy strongholds, stamped withneutral names. Much of the "Swiss" chocolate you buy in Paris was madeby Teutonic hands. 

A French manufacturer who bought a grinding machine in Zurich the otherday thought it looked familiar; and when he compared it with a picturein a German catalogue he found it was the identical article, made inGermany, which had been offered to him by a Frankfort firm six monthsbefore the war began. Only certificates of origin will bar out theGerman product. 

Amid the hatred that the war has engendered, England wonders at theprice she will pay for German exclusion. Men like Sir John Simonsolemnly assert in Parliament: "In proportion as we divert German tradeafter the war we throw the trade of the Central European Powers more andmore into the hands of America, with the result that, unhappily, if webecame involved in another European war we should not be able to counton the friendly neutrality which America has shown in this war. " Othersinquire: "What of the future trade of India, the great part of whosecotton 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 backcommercially. 

"You must not forget, " said one of them, "that, no matter how badly sheis beaten, Germany will still be a going business concern. She will havean immense plant; her genius of efficiency and organisation cannot bekilled. Through her magnificent industrial education system she hastrained millions of boys to take the vacant stools and stands in shopand mill. England and France have no such reserves. Besides, if wepauperise Germany, no one--not even Belgium--will get a pound ofindemnity. "

You have now seen the moving picture of half a world in process ofsignificant change, wrought by clash of arms, and facing a completeeconomic readjustment with peace. Whether the Paris Pact is practical orvisionary, 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 WorldTrade 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 cantell which now--we shall face a supreme test of our resource and ourreadiness. What can we do to meet this crisis, which will mean continuedprosperity or costly reaction?

Many things; but they must be done now, when immunity from actualconflict gives us a merciful leeway. More than ever before, we shallface united business fronts. Therefore, co-operation among competitorsis necessary to a successful foreign trade. 

Since the coming trade war will rage round tariffs, it will be well toheed the resolution recently adopted by the National Foreign-TradeCouncil: "That the American tariff system, whatever be its underlyingprinciple, shall possess adequate resources for the encouragement of theforeign trade of the United States by commercial treaties or agreements, or executive concessions within defined limits, and for its protectionfrom undue discrimination in the markets of the world. " In short, wemust have a flexible and bargaining tariff. 

We must train our men for foreign-trade fields; they must know alienlanguages as well as needs; we must perfect processes of packing thatwill deliver goods intact. With these goods, we must sell goodwillthrough service and contact. Secondhand-business getting will have noplace in the new rivalry. 

Our money, too, must go adventuring, and courage must combine withcapital. Our dawning international banking system, which first saw thelight in South America, needs world-wide expansion. Dollar credit willbe a world necessity if we capitalise the opportunity that peace maybring us. No financial aid should be so welcome as ours, because it isnonpolitical. 

This trade machinery will be inadequate if we have no merchant marine. Chronic failure to heed the warning for a national shipping will makeour 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 ofpractical men of commercial affairs would be of more constructivebenefit to the country than all the lawmakers combined. 

Here, then, is the protection against organised European economicaggression, the armour for the inevitable trade conflict. Unless we girdit 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 infront of the Café de la Paix in Paris. One had arrived only a monthbefore; the other was an old resident in France. After the fashion oftheir kind they became acquainted and began to talk. Before them passeda picturesque parade, brilliant with the uniforms of half a dozennations, and streaked with the symbols of mourning that attested to theravage of war. 

"There is something wrong with these Frenchmen, " said the firstAmerican. 

"How is that?" asked his companion. 

"It's like this, " was the reply. "I have sold goods from the Atlantic tothe Pacific, and yet I can get nowhere over here. I give these fellowsthe swiftest line of selling talk in the world and it makes noimpression. "

"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 hesaid:

"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 notsucceeded. 

This incident illumines one of the strangest and most inconsistentsituations in our foreign trade. By a curious irony we have failed torealise our commercial destiny in the one Allied Nation where realrespect and affection for us remain. France--a sister Republic--is boundto us by sentimental ties and the kinship of a common struggle forliberty. Her people are warm-hearted and generous and _want_ to dobusiness with us. 

Yet, as long and costly experience shows, we have almost gone out of ourway to clash with their customs and misunderstand their motives. Inshort, we have neglected a great opportunity to develop a permanent andworth-while export business with them. It was bad enough before the war. Events since the outbreak of the monster conflict have emphasised itmore 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 andelsewhere in France by German agents, who also represented producers intheir own country. The energetic Teuton did not hesitate to install anAmerican machine or a line of American goods. But what happened? Whenthe machine part wore out or the stock of goods was exhausted, there wasseldom any American product on hand to meet the swift and sometimeimpatient demand for replacement or renewal. By a strange "coincidence"there was always an abundant supply of German material available. TheGerman salesman always saw to that. Necessity knows no nationality. Theresult invariably was that German output supplanted the American. TheFrenchman did not want to be caught the second time. 

This prompt renewal created an immense goodwill for German goods. Righthere 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. " Heshies at samples; distrusts drawings. He likes to go into a warehouseand look over stocks; it gives him satisfaction to pick and choose. Heis the most fastidious buyer in the world and he likes to do things hisown way. Any attempt to ram foreign methods--either in buying orselling--down his sensitive throat is bound to react. 

Here is a case in point: The General Representative in France of a largeAmerican manufacturing concern decided to engage some French salesmen. He was a shark on business system; he fairly oozed with "scientificsalesmanship"; he decided to gird his Gallic emissaries with the mostimproved American selling methods. So he prepared an elaborate "What Idid" schedule for them. Into it was to be written every evening thecomplete record of the business day. 

When he handed one of these blanks to his leading French salesman, thatgentleman shrugged his shoulders and said:

"It eez imposseeble. "

When the American became insistent all the French salesmen resigned in abody. This objection was purely temperamental. If there is one thingabove all others that puts a Frenchman into panic it is publicity of hispersonal affairs. He believes that the greatest crime in the world is tobe found out, whether in business or in love. There was nothing perhapsto hide in a biography of his daily work, but it was the wrong tack totake. 

In the same way militant and masterful salesmanship also fails. A manmay be a crack seller in Kansas City, Denver, and all points West, buthe finds to his sorrow that his dynamic process goes straight over thehead of a Frenchman. He refuses to be driven; he wants time for maturereflection and an opportunity to talk the thing over with his wife. 

This irritating attempt to force uncongenial methods on French buyers isduplicated in a corresponding lack of plain everyday intelligence inmeeting the simplest French requirements. 

Indeed, the omissions of Americans are wellnigh incredible. Take thematter of postage to France. The head of a great French concern madethis statement to me in sober earnestness: "Won't you be good enough tobeg American manufacturers to put their office boys through a course ofinstruction in postal rates between Europe and the United States?"

When I asked him the reason he said: "We sometimes get twenty lettersfrom America in one mail and each comes under a two cent stamp. This hasbeen going on for years despite our repeated protest about it. Somemonths my firm was required to pay from ten to fifteen dollars in excesspostage. "

Now the amount of money involved in this transaction is the slightestfeature: it is the chronic laxity and carelessness of the Americanbusiness man that gets on the Frenchman's nerve. 

Here is another case in point: A well known French firm has been writingweekly letters for the past eighteen months to a New England factorytrying to persuade the Manager to mark his export cases with a stencilplate and in ink rather than with a heavy lead pencil, as the lattermarking is almost obliterated by the time the shipment arrives at Havre. In fact, this French firm went to the extent of sending a stencil andbrush to New England to be used in marking the firm's cases. But the oldpencil habit is too strong and a weekly hunt has to be instituted on theFrench docks for odd cases containing valuable consignments of machinetools. Vexatious delays result. It is just one more nail that theheedless American manufacturer drives into the coffin of his Frenchbusiness. 

These incidents and many more that I could cite, are merely theapproach, however, to a succession of mistakes that make you wonder ifso-called Yankee enterprise gets stage fright or "cold feet" as soon asit comes in contact with French commercial possibilities. Let me nowtell the prize story of neglected trade opportunity. 

Last spring the American Commercial Attache in Paris made a speech at adinner in Philadelphia. He painted such a glowing picture of tradeprospects in France that the head of one of the greatest hardwareconcerns in America, who happened to be present, came to him afterwardswith enthusiasm and said: "We want to get some of that foreign businessyou talked about and we will do everything in our power to land it. Helpus if you can. "

The Attache promised that he would and returned to his post in Paris. Hestudied the hardware situation and found a tremendous need for ourgoods. He was about to make a report to the hardware manufacturer whenan alert upstanding young American breezed into his office and said:

"I have been looking into the hardware situation here and I find thatthere is a big chance for us. In fact, I have already booked some fatorders. Will you put me in touch with the right people in America tohandle the business?"

"Certainly, " replied the Attache. "I know just the firm you are lookingfor. " He recalled the enthusiastic remarks of the man who came to himafter the Philadelphia speech, so he said: "Write to the Blank HardwareCompany in ----, and I am sure you will get quick action. "

"No, " said the enterprising young American, "I will cable. " Heimmediately got off a long wire telling what orders he had and givinggilt 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 oftwo weeks he received a _letter_ from the Export Manager of the firm whosaid, among other things: "We are not prepared to quote any prices forthe French trade now. We have decided to wait with any extension of ourforeign business until after the war. Meanwhile you might call on ouragent in Paris who may be able to do something for you. "

The young American dashed up to the agent's warehouse. The agent was anold man becalmed in a sea of empty space. All his young men were off atthe front; a few grey beards aided by some women comprised his workingstaff. 

"I have no American hardware in stock, " he said, "but I may be able toget you some English or Swiss goods. " This did not appeal to the youngAmerican. He is now making a study of Russian finance. 

Full brother to this episode is the experience of another American inParis who found out that there was great need among French women forcurling irons. Despite war, sacrifice and sudden death, the French womanis determined to look her best. Besides, she is earning more money thanever before and buying more luxuries. Knowing these facts, the Yankeesent 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 usualletter from America containing the now familiar phrase: "See BlankBlank, our Paris representative. He may be able to take care of you. "

Manfully he went to see Monsieur Blank Blank, who not only had nocurling irons but refused to display the slightest interest in them. 

Still another American took an order for some kid skins, intended forthe manufacture of fine shoe uppers. By the terms of the agreement theywere to be three feet in width. The money for them amounting to $30, 000was deposited in a New York bank before shipment. 

When the skins reached Paris they were found to be heavy, coarse leatherand measuring five feet in width. They were absolutely useless for thedesired purpose. The average French buyer, however, is not a welcher. Heaccepted 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 ofknowledge of the French language. Here you touch one of the chiefobstacles in the way of our foreign business expansion everywhere. Ithas put the American salesman at the mercy of the interpreter, and sincemost interpreters are crooks, you can readily see the handicap underwhich the helpless commercial scout labours. A concrete episode willshow what it costs:

A certain American firm, desirous of establishing a more or lesspermanent connection in France, sent over one of its principal officers. This man could not speak a word of French, so he secured the services ofa so-called "interpreter guide. " It was proposed to select arepresentative for the company from among a number of firms in a certainlarge French seaport. The firm chosen was to receive and pay forconsignments through a local bank and act generally for the Americancompany. 

Friend "interpreter guide" said he knew all the big business houses inthe city, so he selected a firm which the American accepted withoutmaking the slightest investigation. A bank agreed to take care of theshipments and the whole transaction was quickly concluded. The Americangrabbed the papers in the case (and I might add without the formality ofhaving them examined by a third party) and left France immenselyimpressed with the ease and swiftness with which business could betransacted with that country. 

But there was an unexpected and unfortunate sequel to this performance. A few months later another officer of this American company camepost-haste to France to straighten out an ugly tangle. It developed thatthe French firm chosen by the "interpreter guide" was not of the higheststanding: that the interpreter, for reasons and profits best known tohimself, had entirely misrepresented the conversation, that instead ofpaying four per cent for services, the American firm was really payingabout ten. The whole transaction had to be called off and a new oneinstituted at considerable expense of time and money. 

Another American came to Paris without knowing the language, used aninterpreter every day for nine weeks, and was unable to place a singleorder. Yet in this time he spent enough money on his languageintermediary to pay the rent of a suitable office in Paris for a wholeyear. 

The dependence of Americans with important interests or commissions uponinterpreters is well nigh incredible. On the steamer that took me toFrance last summer was the new Continental Manager of a large Americanmanufacturing company. I assumed, of course, that he could speak French. A few days after I arrived in Paris I met him in the Boulevard desItaliens in the grip of a five franc a day interpreter. He told me withgreat enthusiasm that an interpreter was "the greatest institution inthe world. " In six months he will probably reverse his opinion. 

The lesson of this lack of knowledge of French as applied tosalesmanship is this: That while the average Frenchman is greatlyflattered when you tell him that his English is good, he prefers to talkbusiness in his own vernacular. He thinks and calculates better inFrench. Frequently when you engage him in conversation in English andthe question of business comes up, you find that he instinctively lapsesinto his mother tongue. 

I was talking one day with Monsieur Ribot, the French Minister ofFinance, whose English is almost above reproach, and who maintained theintegrity of his English through a long conversation. But the moment Iasked him a question about the proposed bond issue, he shifted intoFrench 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 mustknow the French language. It is one of the keys to an understanding ofthe French temperament. 

Even when Americans do become energetic in France, they sometimes failto fortify themselves with important facts before entering into hard andfast transactions. As usual, they pay dearly for such omissions. Thisbrings us to what might be called The Great American Deluge whichoverwhelmed not a few Yankee pocketbooks and left their owners sadderand saner. 

Fully to understand this series of events, you must know that since thebeginning of the war the question of an adequate French coal supply hasbeen acute. Indeed, for a while the country faced a real crisis. Many ofher mines are in the hands of the Germans and she was forced to turn toEngland for help. Not only has the English price risen, but to it mustbe added the high cost of transportation, the heavy war risk, and allthose other details that enter into such negotiations. 

France had to have coal and various enterprising Americans got on thejob. At least, they thought they were enterprising. Before they gotthrough, they wished that they had not been so headlong as the followingtale, now to be unfolded, will indicate. 

A group of New York men made a contract to deliver three shiploads ofcoal at Bordeaux at a certain price. _After_ they had signed thecontract, freight rates from Baltimore to the French port almostdoubled. This was the first of their troubles. When their vessel finallyreached Bordeaux, the dock was so crowded with ships unloading warmunitions that they could not get pier space. In France demurrage beginsthe moment a ship stops outside of port. The net result was that thesevessels were held up for nearly two weeks and the high price oftransportation coupled with the very large demurrage practically wipedout all the profits. 

Another group of Americans made a contract to deliver coal to a Frenchrailway "subject to call. " Without taking the trouble to inquire justwhat "subject to call" meant in France, they signed and sealed thebargain. Then they discovered that the railroad wanted the coaldelivered in irregular instalments. Meanwhile the consignors had tostore the coal in French yards where space to-day is almost as valuableas a corner lot on Broadway. They were glad to pay a cash bonus andescape with their skin. 

Still another group made a contract with the Paris Gas Company for alarge quantity of coal. They discovered later that the company expectedthe coal to be delivered to their bins in Paris. 

"But the American plan is to sell coal f. O. B. Norfolk, " said thespokesman. 

"We are sorry, " replied the Frenchmen, "but the coal must be deliveredto us in Paris. The English have been doing it for forty years, and ifyou 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 systemof doing business abroad. We insist upon the f. O. B. Arrangement, thatis, the price at the American point of shipment. The foreigner, andespecially the Frenchman, wants a c. I. F. Price which includes cost, insurance and freight and which puts the article down at his door. TheGerman and English shippers, and particularly the former, have made thiskind of shipment part of their export creed, and it is one reason whythey have succeeded so wonderfully in the foreign field. 

The Great American Coal Deluge also precipitated a flood of miserabletitled ladies all selling coal for "well known American companies. " Mostof them were clever American women, married, or thinking they weremarried, to Italian or French noblemen. Their chief effort was to get acash 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 andundid American good will. 

One day last August, the telephone rang in the office of the GeneralManager of a long established American concern in Paris. A woman was atthe 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 alarge 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 havethe order, you see, and that is the main thing. "

"But, madam, " asked the man, "have you cabled your company in Americaabout the contract?"

"No, " answered the woman. "What's the use of doing that. I have no moneyto spend on cables. Besides, I have full power to act. The price is allright and the buyers are ready to sign but they want to put into theagreement some silly business about delivery and I am asking you to helpme get the boats. "

"Come and see me, " said the Manager. 

The woman promised to call the next morning, but she never came. Justwhat she had in mind the Manager could never quite tell. But one thingwas proved in this and similar activities: The "Countess" and most ofher sisters who have been trying to put over coal and other contracts inParis, have little or no real authorisation for their performances, andthe principal result has been to prejudice French and Italian buyersagainst us. 

In seeking to make French contracts, some of these adventurers (and theyinclude both sexes) make the most extravagant claims. One groupcirculated a really startling prospectus. At the top was the imposingname of the corporation with a long list of branches in every part ofthe world. Then followed a list of names of individuals and firms withtheir assets supposed to be part and parcel of the corporation. One manwhose name I had never heard before and who was set down as aPittsburgher, was accredited with assets of $250, 000, 000. Under otherindividual and firm resources ranged from one to twenty-five million. The list included the name of a great American retail merchant, withouthis consent I might add, but the promoters had cunningly misspelled hisname, which kept them within the pale of the law. The total assets ofthese "concerns personally responsible for all orders entrusted" wasprecisely $340, 000, 000. In spite of this dazzling array ofmisinformation, let it be said to the credit of the French buyer that hefailed to fall for the glittering bait. 

The more you go into the reasons why so many of our business men havefailed in France, the more you find out that plain everyday businessorganisation seems to be conspicuously absent. Take, for example, thequestion of credit. The average American doing business in Franceproceeds in the assumption that every Frenchman is dishonest. This beinghis theory, he either exacts cash in advance or sells "cash againstdocuments. " Such a procedure galls the Frenchman who is accustomed tolong credit from English, German, Swiss and Spanish manufacturers andmerchants. 

Of course, behind all these American errors in judgment and tact is alack of organised credit information. To illustrate:

When I was in London, the English Managing Director of one of thegreatest of Wall Street Banks received an inquiry from his home officefor information about the Compagnie Generale Transatlantique (the FrenchLine). The amazing thing was that this bank, that prides itself on itsworld-wide information, had no data regarding the leading steamship linebetween England and France. You may be sure that the Credit Lyonnais orany other French banking institution has a complete record of theAmerican Line. 

Not long ago, one of the largest banks in Chicago refused to extendcredit to a French concern, although the French Government backed up thepurchase. This concern had occasionally done business with a New YorkTrust Company in the Rue de la Paix, whose French Manager was a live, virile, far-seeing young American. The President of the French Companylaid his case before him. Quick as a flash he said:

"All right! If they won't guarantee it, I will, and on my ownresponsibility. "

Whereupon he put the deal through. It was the kind of swift, dramaticperformance that appeals to the Frenchman. The net result was that theservice has come back a hundredfold to the Trust Company. 

The idea prevailing in America that French firms are not worthy ofcredit is a matter of great surprise all over Europe. Here is the way anEnglishman whose firm has done business in France for fifty years, sizedup the situation:

"There are no better contracts in the world than those entered into inFrance. Americans who have had little experience in such matters mayfind the negotiations leading up to the signing of a French contractsomewhat tedious, but we do not mind this and one is so completelyprotected 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 hadalready made an advance payment, received his machines and then byvarious excuses put off the final payments for the remainder from weekto week. We waited four weeks and then made our complaint to the judgeat the tribunal. Two days later the judge ordered the delinquent firmto pay up in full and we received our money the very same day. How longdo you think a New York court would have taken to decide a simplequestion 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 creditis the added feeling which has cropped up since the beginning of the warover the way American manufacturers have ignored many of their Frenchcontracts. A French manufacturer summed it up in this way:

"There is no doubt that some American manufacturers who had signedcontracts for the delivery of machinery in France, deliberately soldthese machines at home at higher prices. It has created a very badimpression and I am afraid that henceforth your salesmen will find itmuch 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 haveeverything their own way, they have become independent and arrogant. With the ending of the war, all this will change, for the French are notlikely 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 isthat the American has never taken the French export business any tooseriously. On the other hand, stern necessity has been the driving forcebehind the English and German manufacturer. The American, too, has madethe great mistake of assuming that the foreigner, and especially theFrenchman, is not always serious-minded and to be depended upon. If hewants his mind disabused in this matter, let me suggest that he see himat war. He will realise that the superb spirit of aggression andorganisation that mark him now is bound to last when peace comes. 

You must not get the impression from this long list of American businesscalamity that all our endeavour has failed in France. Those few greatAmerican corporations who have planted the flag of our commercialenterprise wherever the trade winds blow, have long and successfullyheld up their end throughout the Republic. So, too, with someindividuals. The story of what one New Yorker did is an inspiring andperhaps helpful lesson in the right way to do business in France. 

This man is resolute and resourceful: he speaks French fluently and hewas familiar with the foreign trade field. With the outbreak of war hedid 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 optimistwho said it would be a short war: his instinct told him, on thecontrary, that it would be a long one. "What will France need more thananything else?" he asked himself. 

He realised that most of all France would need machine tools. He got thecables busy assembling goods, and by every known route he brought themto 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 todeliver overnight. While his colleagues were frantically trying to gettheir stuff in, he was getting all the business. The French like theman who makes good. 

This man met their expectations and to-day he stands at the top of theselling heap. 

More than this, he is building a factory on the outskirts of Paris wherehe will make and assemble his product. Ask him the reason why he isdoing this, and he will tell you:

"First, it means good will; second, we will get the benefit of nativeand 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 whohave successfully planted their business interests in France, we willface a new handicap when the war ends. As in England, we will be bang upagainst an industrial awakening that will mark an epoch. Coupled withthis revival will be an efficiency born of the war needs that will actas a tremendous speeder-up. 

In France this galvanised industrial life will be stimulated by abrilliant imagination wholly lacking in the English temperament. It willgo a long way toward opening up fresh fields of labour and distribution. 

Self-sufficiency will be the keynote. The automobile is a strikinginstance. We had established a very promising motor market (andespecially with moderate-and low-priced cars) among the French. When theGovernment assumed control of the French automobile factories andchanged their output to war munitions, the two great automobilesyndicates protested that the cutting off of the French motor supplywould mean an immense loss of good will. First came a 70 per cent dutyon practically all American cars and this was followed up by an almostcomplete restriction of all American cars. 

This prohibition will have the same effect as the English exclusion inthat it will stimulate the demand for the native French cars. Here weget to one of the striking phases of the new industrial development ofimmense concern to us. France has her eye on quantity output. Many signspoint to it. 

When the war broke out, a certain young French engineer saw greatopportunity in shell making. He was immuned from military service, hehad 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 theSeine almost within the shadow of the Eiffel Tower. In six months he hadenlarged his capacity so that he was producing 15, 000 shells a day. Lastsummer he sent for the agent of a large American machinery company: "Iam going to make automobiles in series after the war. " "In series" isthe 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 sufficientautomatics to meet the demand when peace comes. "

This is the spirit of the awakened French industry. I know of half adozen automobile and other producing establishments who are making plansto manufacture popular-priced cars when the war is over. This outputwill not only affect the sale of American cars in France, but will alsointerfere with the market for our cheap machines in South America. Already France is making every effort to increase her Latin-Americantrade. She has immense sums of money invested in Brazil and she willfollow up this advantage keenly. 

It is important for us to remember that France like England will have awell oiled productive machine after the war. It will not only be betterbut bigger than ever before. The German ill wind that devastated thenorthern section will blow good in the end. Hundreds of factoriesoperated by hand labour before the war will now be equipped withAmerican labour-saving machinery. The products of these machinesoperated by cheap labour will be in competition with our own commoditiesmanufactured by more expensive labour in many of the markets of theworld. 

Formerly the French artisan could produce an article almost from rawmaterial to finished product: now he has learned to stand at anautomatic and labour at a single part. In short, he is becoming aspecialist 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 warinessof the French banker in underwriting industry is passing away. He isthinking 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 examplesof art and precision. The firms that made them were old and solid andtook infinite pride in their product. Now they realise that output mustdominate. A simple type of machine has been chosen as model and willhenceforth be made in large quantities. 

Then there is the sewing machine. Before the war twogroups--Anglo-American and German--controlled the French market. By theingenious use of export premiums, the Germans had the best of it. 

"Why always pay tribute to strangers?" now asks the French housewife. Sofar as Germany is concerned, this question is already settled. But theAmerican sewing machine will have to struggle for its existencehereafter in France, for plans have been made for at least three hugefactories for its production. 

Striking evidence of the growing French industrial independence ofGermany is her advance in crucible making. For years Sèvres vied withLimoges for ceramic honours. To-day the vast plant which once producedthe most exquisite and delicate ware in the world is now producing theless lovely but more serviceable crucibles, condensers and retortsnecessary for the distillation of the powerful acid used in modern highexplosives. Previous to the war, the Central Empire had a monopoly onthis market. Indeed, much of the pottery and glassware used inlaboratories and chemical factories was made in Bohemia and marketed byGermany. Now the Sèvres plant is shipping these goods to England andRussia. 

So, too, with dye stuffs. A whole new French colouring industry is beingcreated. A Société d'Etude has been formed to make a scientific surveyand this will be replaced by a National Company to undertake themanufacture of all coal tar products. 

The use of a certain number of new war factories has been guaranteed tothe company by the Minister of War. Typical of the purpose which willanimate the enterprise is one of the articles of the National Companywhich provides that the Director of the Dye Stuff Industry must be ofFrench birth. An agreement has also been made with England and Italy toprotect the colour output of the three countries with a high tariffafter the war. Here you find one tangible evidence of the working out ofthe Paris Economic Pact. 

Even while the invader's hand still lies heavy upon the land, Francelooks ahead to reconstruction. Last summer Paris flocked to a graphicexhibition of how to rebuild a destroyed city. It was called La CitéRéconstitué, and was held in the Tuileries Garden. Here you could seethe modern way of making a Phoenix rise quickly out of the ashes. Therewere model schoolhouses, churches, factories, and cottages, all withstandardised parts which could be thrown together in an almostincredibly short time. 

With Self-Sufficiency has come a desire for new business knowledge. Notlong 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 thanever before to meet world business competition. I want to be a bettersalesman. Please send me some books on American salesmanship and alsosome of the American trade papers. I have begun the study of Spanishbecause I believe we are going to have our part in the Latin-Americantrade. " Here was a young Frenchman risking his life every moment in oneof the greatest battles the world has ever known: yet in the midst ofdeath 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 hiskindling desire for rehabilitation. Formerly, for example, the Frenchloathed to travel. When he knew he was going away on a journey, he spenta month telling his relatives good-bye. Now he packs his bag and is offin an hour to Lyon, Marseilles, Bordeaux, or any other place wherebusiness might dictate. 

The new and efficient French industrial machine is not the only factorthat American business in France must reckon with after the war. TheFrench woman is fast becoming a force, thus setting up an altogetherunequal and almost unfair competition, because to shrewd wit andresource 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 thewife holds the purse strings; in the small shops she keeps the cash andruns things generally. No average Frenchman would think of embarking onany 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 Frenchthrift. 

The woman of the lower class has met the grim emergency of war withsacrifice and courage. Not only has she faced the loss of those mostdear with uncomplaining lips, but she has taken her man's placeeverywhere. You can see her standing Amazon-like in leather apronpouring molten metal in the shell factory; she drives you in a cab or ataxi; she runs the train and takes the tickets in the Underground: inshort, she has become a whole new asset in the human wealth of thenation and as such she will help to make up for the inevitable shortageof men. 

Her sister of the upper class, at once the most practical and mostfeminine of her sex, is also doing her bit. She is the lovely thorn inthe path of the American business promoter in France. 

Before the war, it was rare to find this type of woman competing withmen in outside business affairs, although her influence has alwayscounted immensely in official life where she pulls the strings to gethusband or lover Government preferment or concession. 

Since the war, however, necessity has sharply developed her latentbusiness qualities. Now it is not unusual to find her in directcompetition, using all those delightful charms with which Nature hasendowed her. This is especially true of widows and women whose husbandsare at the front. They often rely more upon persuasion than upon anytechnical or practical knowledge. One reason why they succeed is theiralmost uncanny knowledge of men. And this often enables them to graspswiftly 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 ofcattle. 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 oneday at lunch that the War Office needed 50, 000 sacks of flour for thearmy at Saloniki. That same day she put the matter before some Americanbrokers in Paris, who wired to their New York firm and received theusual American reply: "Am not interested in the French trade now. Willwait until after the war. "

With the utmost difficulty the woman was able to secure 10, 000 sacks byway of Italy and Switzerland. She is not likely to seek American sourcesof supply soon again. 

An American got a tip one day that a certain contract for machine toolswas available. He had an appointment for lunch, so he said to himself:"Why hurry? These French people are slow. I'll get busy this afternoonor to-morrow. "

When he went to the establishment in question the next day, he foundthat an exquisitely gowned woman had just preceded him; indeed, thefragrance of the perfume she used still hovered about the outer office. The man cooled his heels for half an hour when the lovely femininevision flashed by him going out. He started to make his selling talk tothe Purchasing Agent, who said, at the first opening:

"I am extremely sorry, Monsieur, but we have just closed the contractwith 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 EconomicRehabilitation, France has not lost sight of her grudge against theGermans. Indeed, no phase of her business life to-day is morepicturesque than the campaign now in full swing not only againstTeutonic trade, but against any resumption of commercial relation withthe hated enemy across the Rhine. Right here you get a strikingdifference between English and French methods. While Britain takes outsome of her enmity against German trade in eloquent conversation, Francehas gone about it in a practical way, shot through with all the colourand imagination that only the French could employ upon such procedure. 

Preliminary to this campaign was a characteristic episode. Almost withthe flareup of war, the French mind turned sentimentally to thosefateful early Seventies when Germany in the flush of her great victoryseized the fruits of that triumph. Some of those fruits were embodiedin the famous Treaty of Frankfort in which the Teuton clamped the mailedfist down on every favoured French trade relation. 

The war automatically annulled this treaty, and although the nation wasin the first throes of a struggle that threatened existence, itcelebrated the revocation in characteristic fashion. Millions of copiesof the Frankfort Treaty were printed and sold on the streets of Parisand elsewhere. The excited Frenchman rushed up and down brandishing hiscopy and saying: "Now we will ram this treaty down the throat of theBoche!"

This emotional prelude was now followed by a definite crusade for theelimination of German goods. Anti-German societies were formed all overthe country. Backing these up are dozens of other formidableorganisations, such as Chambers of Commerce and Business Clubs. Typicalof the campaign is the formation of a Buyers' League which is intendedto assemble all persons who will take a resolution never to buy a Germanproduct and be satisfied for the remainder of their lives with theFrench manufactured article. 

Wherever you go in France, you find some concrete and striking evidenceof the Anti-German wave. When you get a bundle from a Paris shop, youare likely to find stuck on it a brilliantly coloured stamp showing apair of bloody hands holding a number of packages, the largest onelabeled "made in Germany. " Under it is the sentence in French reading:"Frenchmen, do not buy German products. The hands that made are reddenedwith the blood of our soldiers. "

There is great variety in these stamps, which are used on letters andpackages. One of the most popular shows a helmeted German with a brutalface holding a smiling mask before his visage. In one hand he holds abundle 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 bandagedhead 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 awoman in deep mourning weeping over a grave marked with a crosssurmounted by a red soldier cap. The woman is supposed to be sayingthese words: "French people, buy no more German products. Remember thisgrave. "

A companion stamp shows a figure representing the French Republic andholding the tri-colour. The flag is attached to a spear with which sheis piercing the breast of a German eagle on the ground. At her side isthe national bird of France, the Cock, crowing triumphantly. Underneathare the words: "Refuse all German products. "

Similar in idea is another dramatic conception showing a white robedfemale figure holding a battle axe in one hand and pointing with theother to a burning cathedral. Her words are: "Frenchmen, do not consumeany German products. Remember 1914. "

Most of the large French cities have their own Anti-German stamps whichare enlarged and used on billboards as posters. A typical city stamp isthat of Lyon, which shows a Cock in brilliant colours standing proudlyin 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 aGerman helmet surrounded by the words "Anti-German League. " Elsewhere onthe stamp is the inscription: "No more of the people--No more Germanproducts. "

Whether the Frenchman buys or sells, he has poked under his nose orflaunted before his eyes every hour of the business day some concreteevidence that his country has put the German people and their productsunder the ban. 

In connection with this campaign are some facts of utmost significanceto the American business man who has studied the intent and purpose ofthe Paris Economic Pact which is described in a previous chapter, andwhich declared for an Allied war of economic reprisal against Germanyand the other Central Powers. In that chapter, as you may recall, thepoint was made that since individuals and not nations do business, thePact was likely to fail. 

With their usual intelligence, the French understand this, and theirwhole educational campaign at home is to make the individual Frenchmanimmune against the lure of the cheap German products. The French knowthat it is the sum of individual French resistance to German buying thatwill keep the German product forever outside the realm of the Republic. 

Indeed, the clearest-minded men in France to-day believe that morecommercial advantage will accrue to France by the intensive developmentof her resources, the perfection of old industries and the creation ofnew ones than in the formation of committees devoted to plans forcommercial alliances dedicated to reprisal. In other words, this helpsto bear out the theory held in many quarters that the economic pact isafter all merely a campaign document and utterly impracticable. 

In France there are other signs that point to a rift in the Pact. WhileI was in Paris, a well known Senator pointed out that as soon as thewar ended France would need coal and would look to Italy for it as shehad done in the past. To obtain her coal more cheaply than she is nowdoing from the United States or England, Italy would very likely makeconcessions to Germany in order to obtain German fuel. The result wouldbe an interchange of merchandise between the two countries regardless ofthe decree of the Paris Pact. The question arises: Could France placerestrictions upon the Italian frontier to the annoyance of her Allies?

Meanwhile France is seeking immunity from any future coal crisis bydeveloping a system of hydraulic power which will not only beeconomical, but will also help to cut down her imports. It is just onemore phase of the ever-widening programme of Self-Sufficiency. 

Despite our past blunders, our present lack of organised initiative, andthe efforts toward Self-Supply, the future holds a large businessopportunity for America in France. As a matter of fact, half of theselling work is already registered because the French are eager andanxious to do business with their great sister democracy across thesea. It is, therefore, up to the American exporter to capitalise theneeds of the nation and the good will that it bears toward us. But itmust be done now. 

For one thing, it cannot be achieved without constructive co-operativework. Groups of exporters must organise and establish offices in Parisand elsewhere in France. The reason for this is that the Frenchmanabhors the fly-by-night salesman: he likes to feel that the man withwhom he is trading has taken some sort of root in his midst. 

With organisation must come knowledge. Why did the Germans succeed soamazingly in France? Geographical proximity and the Frankfort Treatyhelped some, but the principal selling power he wielded was that helived with his clients, found out what they wanted, and gave it to them. If a French farmer, for example, wanted a purple plough share fastenedto a yellow body, the German assumed that he knew what he wanted andmade it for him. The average American exporter, on the other hand, hasalways assumed that the foreign customer had to take what was given tohim. For this reason we have failed in South America and for thisreason we will fail in France unless we change our methods. Knowledge isselling power. 

We must be prepared to give the French long credits, and if necessary, finance French enterprises. Despite her immense gold hoardings, she mayfeel an economic pinch after the war. We must also have sound andorganised French credit information. 

Our salesmen must know the French language and sympathise with theFrench temperament. Give the French buyer a ghost of a chance and hewill meet you more than half way. Unlike the stolid Englishman he isplastic, adaptable and imaginative. Understanding is a large part of thetrade battle. 

We must accumulate large stocks of American goods in France to indulgethe purchaser in his favourite occupation of long and elaborate choosingand to meet demands for renewal. To ship these goods we must have ourown bottoms. Here, as elsewhere in the whole export outlook, is the oldneed of a merchant marine. 

But we will never realise our trade destiny in France withoutreciprocity. We cannot sell without buying. France looks to us to takepart of the huge flood of goods that once went to Germany. We take someof her wine: we must take more. We buy her silks and frocks: theAmerican market for them must now be widened. We depended upon Germanyfor many of our toys: France expects the Anglo-Saxon nursery henceforthto rattle with the mechanical devices which will provide meat and drinkfor her maimed soldiers. And so on down a long list of commodities. 

All this means that before the mood cools we must conclude newcommercial treaties with France and assure for ourselves a reallyfavoured nation relation that carries the guarantee of a permanentforeign trade now so necessary to our permanent prosperity. 

In the last analysis you will find that it is France and not England towhom we must look for the larger commercial kinship after the war. Thespirit of the awakened Britain, so far as we are concerned, is thespirit of militant trade conquest: the dominant desire of the speeded-upFrance is benevolent Self-Sufficiency. 

Whether England realises her vast dream remains to be seen. But onething is certain: No man can watch France in the supreme Test of Warwithout catching the thrill of her heroic endeavour, or feeling theinfluence of that immense and unconquerable serenity with which she hasfaced Triumph and Disaster. They proclaim the deathlessness of herdemocracy, 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 Saversand launched the greatest of all Campaigns of Conservation. No contrastin the greatest of all conflicts is so marked as this flowering ofthrift amid the ruins of a mighty extravagance. The story of Britain's"Economy First" campaign is a chapter of regeneration throughdestruction that is full of interest and significance for every man, woman, and child in the United States. Through self-denial a completerevolution in national habits has begun. Out of colossal evil has comesome good. 

It has taken a desperate disease to invoke a desperate remedy. Theaverage American, firm in his belief that he holds a monopoly on worldwaste, has had, almost without his knowledge, a formidable rival inEngland these past years. Whether the visiting Yankee tourist helped toset the pace or not, the fact remains that when the war broke overEngland she was as extravagant as she was unprepared. 

The Englishman, like his American brother, though unlike the Scotch, isnot thrifty by instinct. He regards thrift as a vice. He prefers to letthe tax gatherer do his saving for him. He believes with his greatcompatriot Gladstone that "it is more difficult to save a shilling thanto spend a million. "

Contrasting the Englishman and the Frenchman in the matter of economy, you find this interesting parallel: With the Frenchman the firstquestion that attends income is "How much can I _save_?" Saving is thesupreme thing. With the Briton, however, it becomes a matter of "Howmuch can I _spend_?" Saving is incidental. 

To associate thrift with the British workingman is to conceive amiracle. To be sure, he seldom had anything to save before the war. Butwith the speeding-up of industry to meet the insatiate hunger formunitions and the corresponding increase of from thirty to fifty percent, even more, in wages, he suddenly began to revel in a wealth thathe never dreamed was possible. The more he made the more he spent. Hesquandered his financial substance on fine cigars, expensive clothes, and excessive drinks, while his wife bedecked herself in gaudy fineryand installed pianos or phonographs in her house. No one thought ofTo-morrow. 

Just as it took the shock of a long succession of military reverses torouse the English mind to the consciousness that the war would be longand bitter, so did the abuse of all this temporary and inflated war timeprosperity bring to far-seeing men throughout England the realisationthat the British people, and more especially those who worked with theirhands, were booked for serious social and economic trouble when peacecame, unless they saw the error of their wasteful ways. 

"What can we do to stem this tide of extravagance and at the same timeplant the seed of permanent thrift, " asked these men who ranged fromPremier to Prelate. No one knew better than they the difficulties of thetask before them. In England, as in America, thrift is more regarded asa vice than a virtue. Like the taste for olives it is an acquiredthing. To spend, not to save, is the instinct of the race. 

But there were other and equally serious reasons why all England shouldbuck up financially and make every penny do more than its duty. Firstand foremost was the terrific cost of the war that every day took itstoll of $25, 000, 000; second was the enormous increase in imports and thediminished flow of exports, a reversal of pre-war conditions that meantthat England each day was buying $5, 000, 000 worth of goods more thanother countries were purchasing from her; third was the human shrinkagedue to the incessant demand of battlefield and factory. Everywhere wascolossal expenditure of men and money: nowhere existed check orrestraint. Something had to be done. 

It was generally admitted that the first thing for everybody to do wasto spend less on themselves than in times of peace. When, where and howto save became the great question. To save money at the cost ofefficiency for essential and urgent work was not true economy. "But, "said the thrift promoters, "waste is possible even in the process ofattaining efficiency. For example, people may eat too much as well astoo little, they may buy more clothes than they actually need, ride whenthey could walk, employ a servant when they could do their own work, usetheir motors when they could travel in a tram. "

Thus every class came within the range of the lightning that was aboutto strike at the root of an ancient evil. 

The start was interesting. Before the war was a year old definite orderemerged of what was at the beginning a scattered protest againstreckless spending. But long before the first organised message of savingwent 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 contraststhat mark this whole campaign. The people who could most afford to beextravagant were the first to draw in their horns. This, of course, wasnot particularly surprising because the rich are naturally thrifty. Itis one reason why they get and stay rich. 

Among the pioneer organisations was the Women's War Economy Leaguefounded and developed by a group of titled women who got hundreds oftheir sisters to pledge themselves to give up unnecessary entertaining, not to employ men servants unless ineligible for military service, tobuy no new motor cars and use their old ones for public or charitablework, to buy as few expensive articles of clothing as possible, toreduce in every way their expenditures on imported goods, and to limitthe 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 greattarget for attack was the mass of the population who did not know whatit meant to save and who required just the sort of constructive lessonthat an organised thrift movement could teach. 

Much of the increase in wages among the workers was going for food anddrink. Hence the opening assault was made on the market bill. Fortunately, an agency was already in operation. At the outbreak of thewar a National Food Fund was started to feed the hungry Belgians. Thatwork had become more or less automatic (the Belgians' appetite is apretty regular clock), so its machinery was now trained to the twinconservation of British stomachs and savings. 

"Save the Food of the Nation, " was the appeal that went forth on everyside. "No One is too Rich or Poor to Help. Every man, woman and child inthe country who wants to serve the state and help win the war can do soby giving thought to the question of conserving food. Since the greatbulk of our food comes from abroad, it takes toll in men, ships andmoney. Every scrap of food wasted means a dead loss to the Nation inmen, ships and money. If all the food that is now being wasted could besaved and properly used it would spare more money, more ships, more menfor the National defence. "

Now began a notable campaign of education which was carried straightinto the kitchen. Food demonstrators whose work ranged from showing theeconomy of cooking potatoes in their skins to making fire-less cookersout of a soap box and a bundle of straw, went up and down the Kingdomholding classes. In town halls, schools, village centres anddrawing-rooms, mistress and maid sat side by side. "Waste nothing, " wasthe new watchword. 

Backing up the uttered word was a perfect deluge of literature thatincluded "Hand Books for House Wives, " "Notes on Cooking, " "Hints forSaving Fuel, " "Economy in Food, " in fact, dozens of pamphlets allshowing how to make one scrap of food or a single stick of wood do thework of two. 

The people behind this movement knew that with waste of food was thekindred waste of money. They realised, too, that even the most effectivepreachment for food economy must inevitably be met by the cry, "Everybody must eat. " With money, on the other hand, there seemed abetter opportunity to drive home a permanent thrift lesson. So theforces that had built the bulwark around the English stomach now set towork 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 thetext of a great National thrift lesson and give every working man andwoman a chance to become a financial partner of the Empire, " said thesaving mentors. It was decided to put part of this loan within the rangeof everybody, that is, to issue it in denominations from five shillingscrip pieces up, to sell it through the post office and thus bring thenew savings bank to the very doors of the people. 

Again a machine was needed, and once more as in the case of the foodcampaign one was well oiled and accessible. It was the organisation thathad raised, by eloquent word and equally stimulating poster andpamphlet, the great volunteer army of 3, 000, 000 men. Just as it haddrawn soldiers to the fighting colours, so did it now seek to lure thesavings of the people to the financial standard of the nation. 

The Parliamentary Recruiting Committee became the Parliamentary WarSavings Committee and it loosed a campaign of exploitation such asEngland had never seen before. From newspapers, bill boards and rostrumswas hurled the injunction to buy the War Loan and help mould the SilverBullet that would crush the Germans. It was literally a "popular loan"in that the five shilling short-term vouchers, bought at the postoffice, and which paid 5 per cent, could be exchanged when they hadgrown to five pounds for a share of long-term War Stock paying 4½ percent. The higher rate of interest was the inducement to begin saving andit worked like a charm. 

Tribute to the efficacy of this programme is the fact that more than1, 000, 000 English workers purchased the War Loan. Through this procedurethey learned, what most of them did not know before, that when you putmoney out to work it earns more money. It meant that they had becomeinvestors and were starting on the road to independence. 

But this campaign, admirable as it was in scope and execution, failed inits larger purpose of reaching the great mass of the people. While morethan 1, 000, 000 workers participated in the loan their holdings reallycomprised but a small percentage of the immense total. The bulk of thebuying was by banks, corporations, trustees, and wealthy individuals. The message, therefore, of permanent thrift combined with a more orless continuous investment opportunity for every man still had to bedelivered. All the while the Empire hungered for money as well as formen. 

Such was the state of affairs when the Chancellor of the Exchequerappointed the Committee on War Loans for the Small Investor. It had twodefinite functions: to raise funds for the national defence and toprovide through the medium selected some simple and accessible means forthe employment of the average man's money. 

This Committee recommended that an issue be made of Five Per CentExchequer Bonds in denominations of five, twenty and fifty pounds to besold at all post offices. It was an excellent idea and was immediatelyauthorised by the Treasury. The Exchequer Bond became part of theswelling flood of British war securities and might have had adistinction all its own but for the enterprise and sagacity of one manwho happened to be a member of this Committee. 

That man was Sir Hedley Le Bas. You must know his story before you cango into the part that he played in the great drama of British investmentthat is now to be unfolded. A generation ago he was the lustiest lad inJersey, his birthplace. His feats as swimmer were the talk of a raceinured to the hardships of the sea. After seven years in the Army hecame to London to make his fortune. From an humble clerical position herose to be head of one of the great book publishing houses in GreatBritain, employing over 400 salesmen, spending over a quarter of amillion 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 haveever met in England. One day he gave the British publishing business thejolt of its long and dignified life by taking a whole page in the _DailyMail_ to advertise a single book. His colleagues said it was"unprofessional, " that it violated all precedent. Sir Hedley thought tothe contrary and in vindication of his judgment the book developed intoa "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 consultedby the then Minister of War as to the most advisable means of gettingrecruits. 

"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 Committeeand with Kitchener helped to face England's huge problem of raising avolunteer army. How was it to be done?

Hardly had the new War Chief warmed the chair in his office down inWhitehall, than Le Bas came to him with this suggestion: "The quickestway to raise the new army is to advertise for men. "

Kitchener's huge bulk straightened: he looked surprised: the idea seemedunsoldierly, almost unpatriotic. But he knew Le Bas. After a moment'shesitancy:

"All right. Go ahead. "

Under Le Bas was launched the publicity campaign which no man whovisited England during its progress will ever forget. This galvanicpublisher geared all the Forces of Print up to the idea of sellingMilitary Service. Instead of books the Merchandise was Men. 

The most lureful, colourful and effective posters that artist braincould possibly conceive flashed from every bill board in the Kingdom. Noone 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 thecolours perhaps than any other plea of the war. 

When the Parliamentary Recruiting Committee became the Parliamentary WarSavings Committee, Le Bas went with it. Its first job was to sell theGreat War Loan. The Treasury officials wanted it done in the usualdignified British way. 

At the first meeting of the Committee, Le Bas objected to thisprocedure. Early the next morning he went around to the house ofReginald 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 satclad in a dressing gown and listened to the suggestion thatrevolutionised British methods of financial salesmanship. 

"If we want to sell the War Loan, Mr. Chancellor, " said Sir Hedley, "wewill have to advertise in a big way. It's a business proposition and wemust adopt business methods. "

"It sounds interesting, " said the Chancellor. "Come to my office at tenand we will talk it over. "

It was then 8:30 o'clock. By the time he met the Chancellor at theTreasury he had dictated the whole outline of the advertising campaign. The scheme was adopted: the Government spent fifty thousand poundsadvertising the loan but it sold every penny of it. 

This then was the type of man who had sat in the six meetings of WarLoan for Small Investors and listened to many conventional suggestions. He instinctively knew that the Five Pound Exchequer Bond was not asufficient bait to hook the small savings of the great mass of thepeople. 

"We've got to make some kind of attractive offer, " said Sir Hedley tohimself. "In fact, we must give the investor something for nothing tomake him lend his money to the country. A pound note looks big to theaverage Englishman. Why not give him a pound for every fifteen shillingsand sixpence that he will lay aside for the use of the Nation? In otherwords, why not make patriotism profitable?"

When he laid this plan before the Committee, it was unanimouslyapproved. The maxim of "Fifteen and Six for a Pound" was now unfurled tothe breezes and the super-campaign to corral the British penny was on, under the auspices of the National War Savings Committee which nowsuperseded all other organisations as the head and front of the NationalThrift idea. 

Although he had a strong selling appeal in the fact that he was givingthe small British investor something for nothing, Sir Hedley realisedthat 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 LloydGeorge had just succeeded the lamented Kitchener. 

"What could a man buy for fifteen and six?" he asked the many-sidedlittle Welshman who was progressively filling every important job in theEmpire. 

"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 youwill find out what it is. "

The very next day Lloyd George and a great part of the whole BritishNation knew exactly what Sir Hedley got out of his interview with theWar Minister, because the first advertisement announcing the new type ofWar 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 £1 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 £1

 "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 broughthome for the first time one concrete use of the money absorbed in warloans. 

The National War Savings Committee had two things to sell. One was theFive Per Cent Exchequer Bond: the other was the new Fifteen and Six WarSavings Certificate. The promoters were quick to see that while theExchequer Bond was very desirable, the principal effort must beconcentrated on the War Savings Certificate for which the widest appealand the best selling talk could be made. 

That it was a good "buy" nobody could deny. It was the obligation of theBritish Government: it was free from Income Tax: it could be cashed inat any time at a profit: and it made the owner part and parcel of thefinancing of the war. Every post office and nearly every bank became aselling agent. In short, it was a simple, cheap and worth-whileinvestment absolutely within the scope of every one. 

At the outset the sale was restricted to those whose income did notexceed $1, 500, the purpose being to keep the investment among the wageearners. So many munition workers were receiving such large incomesthat this ban was removed. The only limitation imposed was that noindividual could hold more than 500 Certificates. This did not preventthe various members of a family, for example, from each acquiring thefull limit. 

Having decided to make the War Savings Certificate its prize commodity, the Committee proceeded to launch a spectacular, even sensationalpromotion campaign. J. Rufus Wallingford in his palmiest days was nevermore persuasive than the literature which now fairly flooded GreatBritain. 

The phrase "Your King and Country Need You" that had stirred therecruiting fever now had a full mate in the slogan "Saving for Victory"which began to loosen pounds and pence from their hiding places. Theinjunction 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 suddenlycame back. It was dramatised in every possible way and it became part ofa new gospel that vied with the war spirit itself. 

The National War Savings Committee became a centre of activity whoselong arms reached to every point of the Kingdom. Branch organisationswere perfected in every village, town and county: the Admiralty and theWar Office were enlisted: through the Board of Education every schoolteacher became an advance agent of thrift: the Church preached economywith the Scripture: in a word, no agency was overlooked. 

The sale of Certificates started off fairly well. On the first day morethan 2, 000 were sold and the number steadily increased. But while manyindividuals rallied to the cause, there was not sufficient team work. 

One serious obstacle stood in the way. While fifteen shillings and asixpence 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 WarSavings Committee set about establishing some means by which theaverage man or woman could start his or her investment with a sixpence, that is, twelve cents. Even here there was a difficulty. Millions ofpeople in England could save a sixpence a week, but the chances are thatbefore they piled up the necessary fifteen and six to buy the firstCertificate they would succumb to temptation and spend it. 

The English small investor, like his brother nearly everywhere, is aperson who needs a good deal of urging or the power of immediate exampleabout him. Thereupon the Committee said: "What seems impossible for theindividual, may be possible for a group. "

Thus was born the idea of the War Savings Association, planned to enablea group of people to get together for collective saving and co-operativeinvestment. This proved to be one of the master strokes of the campaign. From the moment these Associations sprang into existence, the whole WarSavings Certificates project began to boom and it has boomed ever since. 

War Savings Associations are groups of people who may be clerks in thesame office, shop assistants in the same establishments, workers in thesame factory or warehouse, people attending the same place of worship, residents in any well-defined locality such as a village or ward of atown, members of a club, the servants in a household: in short, anynumber of people who are willing to work together. Some have beenstarted with 10 members, others with as many as 500. Up to the first ofJanuary nearly 10, 000 of these Associations had been formed throughoutthe Kingdom. 

Now came the inspiration that was little short of genius for it enabledthe lowliest worker who could only set aside a sixpence a week to becomean intimate part of the great British Saving and Investment Scheme. Theidea was this:

If one man saves sixpence a week, it would take him thirty-one weeks toget a One Pound War Certificate. But if thirty-one people each savesixpence a week, they can buy a Certificate at once and keep on buyingone every week. Thus their savings begin to earn interest immediately. Thus every War Savings Association became a co-operative saving andinvestment syndicate--a pool of profit. 

How are the Certificates distributed? The usual procedure is to drawlots. In a small Association no member is ordinarily permitted to winmore than one Certificate in a period of thirty-one weeks, except byspecial arrangement. Each Association, however, can make its ownallotment rules. The value of winning a Certificate the first week isthat the winner's 15/6 will have grown to one pound in four years and ahalf instead of five. This is broadly the financial advantage gained bybeing a member of an Association, although the larger reason is that itis more or less compulsory as well as co-operative saving. 

Britain is buzzing with these War Savings Associations. You find them inthe mobilisation camps, on the training ships, on the grim grey fightersof the Grand Fleet, even in the trenches up against the battle line. TheLondon telephone girls have their own organisation: sales forces oflarge commercial houses are grouped in thrift units: there are savingbattalions in most of the munition works, and so it goes. In many ofthe big mercantile establishments that have Associations, the weeklydrawings of Certificates with all their elements of chance and profitsare exciting events. 

Many Britishers shy at co-operation. For example, they like to save "ontheir own. " To meet this desire, the War Savings Committee devised anindividual saving and investment plan which begins with a penny, that istwo cents. Any person can go to the Treasurer of a War SavingsAssociation and get a blank stamp book. Each penny that he deposits ismarked with a lead pencil cross in a blank square. When six of thesemarks are recorded, a sixpenny stamp is pasted on the blank space. Assoon as the book contains thirty-one stamps it is exchanged for a WarSavings Certificate. 

Still another plan has been devised to meet requirements of people whodo not care to affiliate with the War Savings Associations. Any postoffice will issue a stamp book in which ordinary sixpenny postage stampscan be pasted. When thirty-one have been affixed they may be exchangedat the post office for a pound Savings Certificate. These books havethis striking inscription on their cover: "Save your Silver and it willturn into Gold! 15/6 now means a sovereign five years hence. "

The whole Savings Campaign is studded with picturesque little lessons inthrift. The London costers--the pearl-buttoned men who drive the littledonkey carts--subscribed to $1, 000 worth of Certificates in a singleweek, although they had made a previous investment of $4, 000. 

In hundreds of factories the idea has taken root. In some of them WarSavings subscriptions are obtained by means of deductions from wages. Employees can sign an authorisation for a certain amount to be takeneach week or month out of their wages. They get accustomed to havingtwo, three, four or five shillings lifted out of their wages and thustheir saving becomes automatic. 

Often the employer helps the movement by contributing either the firstor last sixpence of each Certificate or offering Certificates as bonusesfor good conduct or extra work. When one small employer that I heard ofpays his men their War Bonus, he gets them, if they are willing, toplace two sixpenny stamps on a stamp card, for which he deductstenpence. The employees are thus given twopence for every shilling theysave. When these cards bear stamps up to the value of 15/6 they areexchanged for War Savings Certificates. 

No field has been more fruitful than the public schools where the thriftseed has been planted early. In hundreds of public educationalinstitutions Savings Clubs have been formed to buy Certificates. InHuntingdonshire, where there were less than 150 pupils, more than $35. 00was subscribed in a single morning. At Grimsby a successful trawlerowner gave $5, 000 to the local teachers' association to help the WarSavings crusade. A shilling has been placed to the credit of every childwho undertakes to save up for a War Savings Certificate, the child'spayments being made in any sum from a penny up. Ninety-five per cent ofthe children in the town have begun to save. Similarly, a councillor ofColwyn Bay has offered to pay one shilling on each Certificate bought bythe scholars of one of the town's schools, and also offered to add fiftyper cent to all sums paid into the school savings bank during oneparticular week, provided that the money was used to purchase WarSavings Certificates. 

Almost countless schemes have been devised to instil, encourage anddevelop the thrift idea. In certain districts, patriotic women makehouse to house canvasses to collect the instalments for theCertificates. They become living Thrift Reminders. Tenants of modelflats and dwelling houses pay weekly or monthly War Savings Certificatesat the same time they pay their rent. 

That this economy and savings idea has gone home to high and low wasproved by an incident that happened while I was in London. A manappeared before a certain well-known judge to ask for payment out of asum of money that stood to his credit for compensation to "buy clothes. "The judge reprimanded him sharply, saying, "Are you not aware that oneof the principal War Don'ts is, 'Don't buy clothes: wear your oldones. '" With this he held up his own sleeve which showed considerablesigns of wear. Then he added: "If I can afford to wear old garments, youcan. Your application is dismissed. "

With saving has come a spirit of sacrifice as this incident shows: ALondon household comprising father, mother and two children moved into asmaller house, thus saving fifty dollars a year. By becoming teetotalersthey saved another five shillings (one dollar and a quarter) and onclothes the same weekly sum. They took no holiday this summer: ate meatonly three times a week, abstained from sugar in their tea, cut downshort tramway rides, and the father reduced his smoking allowance. Bythese means they have been able to buy a War Savings Certificate everyweek. 

Just as no sum has been too small to save, so is no act too trivial toachieve some kind of conservation. People are urged to carry home theirbundles from shops. This means saving time and labour in delivery andpermits the automobile or wagon to be used in more important work. Icould cite many other instances of this kind. 

Even the children think and write in terms of economy. At the annualmeeting of the British Association for the Advancement of Science heldlast summer at Newcastle, an eminent doctor read a paper on "LondonChildren'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 thejuvenile mind was thoroughly soaked with the savings idea. Some of theanswers that he quoted were very humorous. A boy in Kensington gave thefollowing reasons:

"Eat less and the soldiers get more: If you make a silly mistake in yourarithmetic tell your mother not to let you have any jam, and put themoney saved in the War Loan: Stop climbing lamp-posts and save yourclothes: 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, becausethe man who makes them may keep a soldier waiting for his: Don't use somuch soap: Don't buy German-made toys. "

The net result of this mobilisation of the forces of thrift is that upto 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 wasreared with the coppers of working men and women. "Serve by Saving" inEngland has become more than a phrase. 

All this was not achieved, however, without the most persistentpublicity. England to-day is almost one continuous bill board. Thehoardings which blazed with the appeal for recruits and the War Loan nowproclaim in word and picture the virtues of saving and the value of thenow familiar War Certificates. Likewise they embody a spectacular lessonin thrift for everybody. 

One of the most effective posters is headed "ARE YOU HELPING THEGERMANS?" Under this caption is the subscription:

"You are helping the Germans when you use a motor car for pleasure: whenyou buy extravagant clothes: when you employ more servants than youneed: when you waste coal, electric light or gas: when you eat and drinkmore than is necessary to your health and efficiency. 

"Set the right example, free labour for more useful purposes, save moneyand lend it to the Nation and so help your Country. "

A gruesome, but none the less striking, poster is entitled: "What isthe 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 canafford, into Exchequer Bonds or War Savings Certificates, and lend yourmoney to your Country. "

Still another is entitled "BAD FORM IN DRESS" and reads:

"The National Organising Committee for War Savings appeals againstextravagance in women's dress. 

"Many women have already recognised that elaboration and variety indress are bad form in the present crisis, but there is still a largesection of the community, both amongst the rich and amongst the lesswell to do, who appear to make little or no difference in their habits. 

"New clothes should only be bought when absolutely necessary and theseshould be durable and suitable for all occasions. Luxurious forms, forexample, of hats, boots, shoes, stockings, gloves, and veils should beavoided. 

"It is essential, not only that money should be saved, but that labouremployed in the clothing trades should be set free. "

Harnessed to the Saving and Investment Campaign is a definite andorganised crusade against drink, ancient curse of the British worker, male and female. It is really part of the movement instituted by theGovernment at the beginning of the war to curtail liquor consumption. One phase is devoted to Anti-Treating, which makes it impossible to buyany one a drink in England. This was followed by a drastic restrictionof drinking hours in all public places where alcohol is served. Liquorsmay only be obtained now between the hours of 12 noon and 2:30 in theafternoon and from 6 to 9:30 at night. As a matter of fact, the onlytipple that you can get at supper after the play, even in the smartestLondon hotels, is a fruit cup, which is a highly sterilised concoction. 

The War Savings Committee has borne down hard on the drinking evil andEngland's enormous yearly outlay for liquor--nearly a billiondollars--is used as a telling argument for thrift. A poster and apamphlet 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 thesum now being spent by the Nation on alcoholic liquors is estimated at

 £182, 000, 000 a year. 

"And appeals earnestly for an immediate and substantial reduction ofthis expenditure in view of the urgent and increasing need for economyin all departments of the Nation's life. 

"Obviously, in the present national emergency a daily expenditure ofpractically £500, 000 on spirits, wine and beer cannot be justified onthe ground of necessity. This expenditure, therefore, like every otherform and degree of expenditure beyond what is required to maintainhealth and efficiency is directly injurious to national interests. 

"Much of the money spent on alcohol could be saved. Even more importantwould be (1) the saving for more useful purposes of large quantities ofbarley, rice, maize and sugar; and (2) the setting free of much laboururgently needed to meet the requirements of the Navy and the Army. 

"To do without everything not essential to health and efficiency whilethe 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 ofthe Savings Campaign, the sale of Certificates rose steadily. From906, 000 in May they jumped to nearly 3, 000, 000 in June. But this was notenough. "Let us make one big smash and see what happens, " said theCommittee. Thereupon came the idea for a War Savings Week, which was tobe a notable rallying of all the Forces of Thrift and Saving. 

No grand assault on any of the actual battle fronts was worked out withgreater care or more elaborate attention to detail than this SavingsDrive. No loophole to register was overlooked. It was planned to beginthe work on Sunday, July 16th. 

First of all, the resources of the Church were mobilised. A Thriftsermon was preached that Sunday morning in nearly every religiousedifice in the Kingdom. Following its rule to leave nothing to chance, the War Savings Committee prepared a special book of notes and texts forsermons which was sent to Minister, Leaders of Brotherhoods and Men'sSocieties. Texts were suggested and ready-made and ready to deliversermons were included. One of these sermons was called "The Honour ofthe Willing Gift, " another was entitled "The Nation and Its Conflict, "and its peculiarly appropriate text was "Well is it with the man thatdealeth graciously and lendeth. "

A special address (in words of one syllable) to the children of Englandembodying the virtues of penny saving and showing how these penniescould be made to work and earn more pennies, as shown in the concreteexample of a War Savings Certificate, was read by thousands of Sundayschool teachers to their classes throughout the nation. 

Nearly every human being in Great Britain got the Message of Thrift thatweek. Boy Scouts and Girl Guides went from house to house bearing copiesof the various kinds of instructive literature that had been preparedfor the campaign. Typical of the thoroughness of the detail is the factthat in Wales all this material was printed in the Welsh language. Theonly country where no special efforts were made was Scotland, where topreach 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 that3, 000, 000 Certificates had been sold during the week while the total forthe month was 10, 700, 000. 

So vividly was the phrase "War Savings Week" driven home that the WarSavings Committee decided instantly to capitalise this new asset. In afew days hundreds of bill boards and fences throughout the Kingdomblossomed forth with this sentence, painted in red, white and blueletters: "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 mediumfor disseminating the Gospel of Thrift. It enlisted the movies. A filmcalled "For the Empire" was made by a number of well known motionpicture actors and actresses who gave their services free of charge. 

It was a moving and graphic story of the war showing how a certainEnglish lad volunteers at the outset and goes to the front. You get avivid picture of life in the trenches shown in actual war scenes. Thenyou see the young soldier fall while gallantly leading a charge: hisbody is brought home and he is buried with military honours. Then thescreens hurls the question at the audience: "This man has died for hisCountry. What are you doing for the Nation in its hour of trial?" Nowfollows a vivid lesson in how to save and buy a War SavingsCertificate. This film has been shown in 2500 cinema theatres up to thefirst of the year and was booked to be shown in 1000 more within thenext few months. 

So widespread has the Thrift movement become that the War SavingsCommittee now publishes its own monthly magazine called _War Savings_. The first issue appeared on September first and included such timelyarticles as "The Might of a Mite, " a lesson in penny building: "TheFinal Mobilisation, " which showed how the last £100, 000, 000 would winthe war: a third article explained the Economy Exhibition now being heldall over Great Britain as part of the Thrift crusade. There was also anarticle on the War Saving movement by Reginald McKenna, Chancellor ofthe Exchequer, and a very illuminating appeal, "Every Household MustHelp Win the War. "

This leads to one of the most instructive branches of the wholecampaign, the one devoted to the elimination of waste in the household. Under the direction of the Patriotic Food League a voluminous andhelpful literature has been prepared and distributed. One bookletdevoted to "Waste in the Well-to-do Household" shows how gas, coal andelectric light bills, and the whole cost of living can be reduced. Another called "Household Economies" has helpful hints for mistress andmaid: a third is "The Best Foods in War-Time. " A stirring plea was madeto every household in the shape of a card surmounted by a picture ofLord Kitchener and containing his famous warning to the English people:"Either the civilian population must go short of many things to which itis accustomed in times of peace, or our armies must go short ofmunitions and other things indispensable to them. " Below this quotationwas the stirring question:

"Which is it to be: economy in the household or shortage in the Army andNavy?"

Under the title of "War Savings in the Home" a plan of campaign has beensent to every household in England for operation during the whole periodof war. Among other things it urges every family to give up meat for atleast 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 strenuouslysuggested. It is shown how reduction in personal and householdexpenditure can be effected, for example, in the laundry by usingcurtains and linen that can be washed in the house. A special appeal todispense with starched and ornamental lingerie is made. In these andmany other ways the style of living is simplified so that the amount ofdomestic service in every home is greatly cut down and much labour setfree for war work and general production. 

Indeed, no phase of Life or Work has escaped the Search-Light of thebenevolent Inquisition which has wrought Conservation out of Waste. 

It has a larger significance than merely changing habits and convertingpounds and pence into guns and shells. It means that England is creatinga Sovereignty of Small Investors, thus setting up the safeguard that isthe salvation of any land. The War Savings Certificate will have asuccessor in the shape of a more permanent but equally stable Governmentbond. 

When all is said and done you find that huge reservoirs of Savings atwork form a country's real bulwark. Through investment in small, accessible, and marketable securities a people become independent andtherefore more efficient and productive. It mobilises money. 

Behind all the spectacular publicity that has swept hundreds of millionsof British shillings into safe and profitable employment is a Lesson ofPreparedness that America may well heed. It means a form of NationalService that is just as vital to the general welfare as physicaltraining for actual conflict. A nation trained to save is a nationequipped to meet the shock of economic crisis which is more potent thanthe attack of armed forces. 

What does it all mean? Simply this: no man can touch the English thriftcampaign without seeing in it another evidence of a great nation's grimdetermination to win, whatever the sacrifice. 

The British people at home have come to realise that by personal economyand denial they can serve their country and their cause just aseffectively as those who fight amid the blare of battle abroad. They areanimated 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 isequipping the nation to meet the drastic economic ordeal of to-morrow. 

If this lesson of conservation is heeded after the war and becomes afeature of the permanent British life, then the Great Conflict willalmost have been worth its dreadful cost in blood and treasure. He whosaves 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 themightiest financial structure ever dedicated to a single purpose. Hecannot tell how his funds will be used. They may buy a few hundredshells, clothe a thousand soldiers, feed a battalion or build a trench. All he knows is that his mite joins the continuous and colossal streamof 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 almostprecisely what it does, for it lays down a track, provides new equipmentor builds a power house. The investment, in short, represents somethingthat produces more wealth. 

War, on the other hand, is a gigantic engine of destruction. Instead ofbuilding up, it tears down. It is a monster machine consecrated towaste. The only possible dividend can be peace. 

The cost of the European conflict has a deeper interest for us than merecuriosity over staggering statistics. The reason is that we have joinedthe Paymaster's Corps. In other words, we have backed up our sympathywith cash. We are silent partners in the costliest and deadliest of allbusinesses. 

Up to the present stupendous struggle and with the exception of theRusso-Japanese War in which we floated several issues for the littleyellow men, we have had no definite economic part in the wars that shookother nations. The losses in money and in men fell on the combatants. 

This war, which has shattered so many precedents, has drawn the UnitedStates out of its one-time aloofness. To the dignity of World Trader wehave added the twin distinction of World Banker. Already we have pouredout practically two billions of dollars for securities and credits ofthe warring countries. To this must be added an even greater sumrepresenting our enormous war exports. The price, therefore, of whateverfreedom emerges from these years of bloodshed intimately touchesthousands 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 ConsumingAltar?

Before making any analysis of the American stake in the cost of theEuropean War, it is important to find out first just how much money hasbeen expended and what the likelihood of future outlay will be. Likeevery other phase of the stupendous upheaval this one is bothspeculative and problematical. 

To deal with these European War figures is to flirt with TitanicNumerals. They are more the Playthings of the Gods than matters for meremortals to juggle with. 

Up to the first of January, 1917, the total military expenses of bothsides had reached approximately $61, 000, 000, 000. It is only when youreduce this enormous sum to terms that every man and woman canunderstand that you begin to get some idea of the amazing cost ofconflict. 

The amount of money expended for direct war purposes alone since August1, 1914, is equal to three times the par value capitalization of allthe American railroads. It represents fifty times the net national debtof the United States: eighteen times the amount of money in actualcirculation in this country: and eleven times the total deposits in allour savings banks. With it you could build 146 Panama Canals or pay forthe Napoleonic, Crimean, Russo-Japanese, South African and AmericanCivil Wars and still have a surplus of $34, 000, 000, 000 left. Such is theNew and High Cost of War!

The price of glory is being constantly advanced. The expenditures forthe first year of the war were $17, 500, 000, 000: for the second they hadincreased to $28, 000, 000, 000: the estimate for the third year, to endAugust 1, 1917, at the present rate of spending is about$33, 000, 000, 000. This means that by the time the next harvest moonshines (and no man in Europe to-day doubts that it will gleam oncarnage), the war will have represented a sacrifice for militarypurposes alone of $78, 500, 000, 000. 

Taking the daily cost of the war you find that England is $25, 000, 000poorer for every twenty-four hours that pass: that France must checkout $20, 000, 000: Russia $16, 000, 000: Italy $5, 000, 000. Little Roumaniais 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. Thusbetween sunrises that break over these warring hosts very nearly$100, 000, 000 has gone up in smoke, splinters or ruin of some kind, orthe upkeep of fighting. 

Since England's cost each day is heavier than any of the other countriesat war, due to the fact that she is Financial First Aid to most of herAllies and is maintaining a fleet almost equal to all the otherscombined, let us reduce her enormous daily war bill of $25, 000, 000 tosimpler form. It means that participation in the greatest of all wars iscosting her $1, 410, 666 an hour, $17, 361 a minute and a little over $289a second. At this rate of waste John D. Rockefeller would be bankrupt inforty days; Andrew Carnegie would be in the bread line in ten. The sumis greater than the entire net public debt of Chicago; it equals theassessed valuation of all the taxable property in Poughkeepsie, NewYork. 

Work out this immense daily outlay from still another angle and thesestriking facts develop: the war is costing at the rate of 29 cents a dayfor every inhabitant of the United Kingdom: 31 cents for everyindividual 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 theactual cost of hostilities. By this I mean arms and armament, food andmilitary 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 bythe destruction of cities, towns and villages, the sinking of ships, thewiping out of factories, warehouses, bridges, roads and railways. 

Then, too, you must allow for the almost incalculable productive lossdue to the killing and maiming of millions of men: the shrinkage ofagricultural yields and the more or less general dislocation of themachinery of output. All these factors pile up a total, the calculationof which would almost cause a compound fracture of the brain. Sufficientto say it puts a terrific human and financial tax on coming generationsand we in America will feel its effects when the world begins toreadjust itself to the altered social and economic conditions which willcome with peace. 

Of course the inevitable question arises: Who is paying the ScarletPiper? In seeking the answer you encounter for the first time America'sintimate and all-important part in the costly drama now being unfoldedto the tune of billions. She sits in the armoured box-office with theTreasurers of the embattled nations. 

At the outset of the war all the belligerent countries believed thatthey could finance their needs without seeking neutral aid. Less than ayear was enough to dispel this delusion. Although England and Franceimmediately voted immense credits they were not long in finding out thatthey must back up their unprecedented mobilisation of resources withoutside help. They came to us. 

When the great Anglo-French loan of $500, 000, 000 was first discussed asa possible American financial feat, people over here began to wonder whyGreat Britain and France, whose combined wealth exceeds that of all theother nations at war, should want overseas assistance. Since the reasonfor this loan as well as the disposition of proceeds are practically thesame as that of most of the other Allied issues in this country in whichthousands of our investors have participated, it is well worthexplaining because it also carries with it a lesson in internationalbarter. 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 weimported the product of many European factories. 

Business relations between nations are not settled like transactionsbetween individuals and firms, that is, with checks or cash. They aresettled by balances. England's imports from the United States, forexample, are paid by her exports to us. Usually exports and imports sonearly balance that the difference is paid by gold or with the temporaryuse of bank credit. Therefore it is not a question of actual money butof exchange and this foreign exchange is a commodity whose valuefluctuates with supply and demand. 

Along came the war. Millions of artisans in France and England werewithdrawn from lathe and loom to fight in the battle line. What workersremained at their posts had to produce war supplies. Yet civilian andsoldier needed food, clothing and arms. The demand for our productsincreased and the United States suddenly became the work-shop and thegranary of the world. 

The Allies, in control of the seas, became our principal foreigncustomers. American exports soared: those of France and England declinedcorrespondingly. A huge balance of trade--the biggest in ourhistory--swung to our favour. 

This balance of trade had to be settled, but on an abnormal basis. Whatwas ordinarily a comparatively trivial matter of a few millionssuddenly became an item of many millions and it was all owed on oneside. The demand for exchange on New York greatly exceeded the supplyand the inevitable dislocation happened. England and France had to pay adrastic premium on the American dollar. The English pound, normallyrated $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 anyimpairment of the resource or wealth of the Allies but because themachinery of international payment works automatically andunsentimentally. 

Here was a crisis that without aid from us might have eventually cost usdear. Rather than submit to the terrific drain on the exchange value ofthe pound and franc, England and France could have set about emulatingthe example of Germany and become self-sufficient. It was not a month'swork or even a year's work, but ultimately it would have made thesecountries more independent of the United States after the war is over. 

Of course England and France could have met the situation by shippinggold. Each had a large reserve but the United States had all the gold itwanted, and still has. Besides, in such an emergency gold is an inertand unproductive commodity. 

Again, the Allies might have "dumped" their American securitiesrepresenting an investment of over three billions of dollars, whichwould have upset the American stock market and sent prices down. Eitherone 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 wouldenable them to buy freely and remove the costly handicap on Americanexchange. In a word, instead of having to pay their bills through anintricate mechanism that rose and fell with the tides of trade and put apremium on trading with us, a medium was needed that would restore thewhole economic trade balance. It was as essential to us as to ourcustomers. 

Hence the Anglo-French Five Hundred Million Dollar Loan was floated andUncle Sam became a war banker. This loan, however, was nothing more orless than the setting up of a credit of half a billion dollars forEngland and France in the United States. To put it in another way, it isjust as if the two Allies had deposited this sum in an American bank andthen drew checks against it for goods and raw materials made or mined inAmerica. In a word, we lent to ourselves. 

Put out at a time when money was scarce, the loan would have beenunpatriotic and uneconomic. But our banks were filled with idle cash:everywhere capital sought safe and profitable employment. Now you beginto see why these allied loans are really good business in more ways thanone. 

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 theseforeign bonds are put out. There are two kinds. One is the internal loanissued in the money of the country whose name it bears. This means thatif it is a French bond it is in terms of francs: if English it calls forpayment in pounds sterling: if Russian, in roubles: if German, inmarks. An external loan, on the other hand, is issued in the money ofthe country in which it is floated. The Anglo-French loan is an exampleof this kind because both principal and interest are to be paid inUnited States gold coin. These internal and external loans may be directobligations of the issuing governments or may be secured by collateral. 

There is still a third medium for the employment of American money inthe war. Technically it is known as bank credit. Through this agency, foreign firms make deposits of money or collateral in the national banksof their respective countries and purchase goods in America throughcredits thus established for them in a group of New York banks or trustcompanies. The acceptances for the goods thus bought become negotiabledocuments and are bought and sold by institutions and investors at adiscount. 

This evidence of debt is not the kind of foreign investment suitable forthe man or woman with savings to employ because it is more or less abanking transaction. These credits usually net about 6½ per cent. 

With the exception of a comparatively small amount of German andAustrian Bonds bought in the main by natives of these two countries forpurely sentimental and patriotic reasons, the entire bulk of Europeanloans placed in America is for the Allied countries, principally Englandand France who are our heaviest customers in trade. 

The largest foreign loan brought out here so far is the Anglo-French 5per cent External Loan which was negotiated through J. P. Morgan &Company--Fiscal Agents for the Allies over here--by the Commissionheaded by Lord Reading and Sir Edward Holden. It is the Joint andSeveral Obligation of the Governments of the United Kingdom of GreatBritain and Ireland and the French Republic, is dated October 15, 1915, and is due five years after that date. It ranks first amongst theforeign war obligations of these countries. 

This was the first big credit arranged by England or France in theUnited States and the proceeds were used, in the manner that I havealready described, for the purchase of American goods and to stabilizethe foreign exchange. These bonds which have had a very wide sale inAmerica were brought out at 98 and interest and at the time of issuerepresented an investment that paid nearly 5½ per cent. 

These bonds, I might add, are convertible at the option of the holder onany date not later than April 15, 1920, or provided that notice is givennot later than this date, par for par, into 15-25 Year Joint and Several4½ per cent bonds of the Governments of the United Kingdom of GreatBritain and Ireland and the French Republic. Such 4½ per cent bonds, payable, principal and interest, in United States gold coin, in New YorkCity, and free from deduction for any present or future British orFrench taxes, will mature October 15, 1940, but will be redeemable, atpar and accrued interest, in whole or in part, on any interest date notearlier than October 15, 1930, upon three months' notice. 

The equity behind these bonds is the good name, wealth and taxing powerof the issuing countries. The interest on this loan equals onlyone-fifth of one per cent of the total estimated income of the Britishpeople in 1914. It is slightly more than one-third of one per cent ofthe French Republic in 1914. 

Between this loan and the next large borrowing by England or France inthe United States occurred an event of significance to the Americaninvestor interested in the securities of foreign nations. TheAnglo-French loan, as you know, was simply the promise to pay of twogreat countries whose Government Bonds at home represented the last wordin 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 areall right, " he said, "but you are in a war that may last a very longtime and I must have collateral. "

To English pride this was a terrific jolt. I happened to be in Englandat the time and I recall the astonishment of no less a distinguishedindividual than the Chancellor of the British Exchequer. It wasunbelievable that any nation could demand greater security than thegood name of the Empire. "If the elder J. P. Morgan were alive this wouldnever have happened, " said the London bankers. They knew that theGrizzled Old Lion of American Finance always held that character was thebest collateral. In the war emergency, however, many American bankersthought to the contrary and the net result was that with all externalloans thereafter England and France have been forced to dig into theirstrong boxes and do what any individual does when he borrows money--putup a good margin of security. 

An illustration of this secured obligation of the British Government isthe issue of $300, 000, 000 Five and a Half Per Cent Gold Notes datedNovember 1, 1916. Principal and interest are payable without deductionof any English tax in New York and in United States gold coin. Theholder of these notes, however, has the option to get his money inLondon but at a fixed rate of $4. 86 per pound sterling, the normal valueof the pound in peace time. Since the pound sterling at the time thisarticle is written is quoted at $4. 76, this is a decided advantage. 

The new English loan is secured by stocks and bonds whose total marketvalue is not less than $360, 000, 000. One group of this collateralconsists of stocks, bonds and other obligations of American corporationsand the obligation, either as maker or guarantor, of the Government ofthe Dominion of Canada, the Colony of Newfoundland and CanadianProvinces and Municipalities. The second group included obligations ofAustralia, Union of South Africa, New Zealand, Argentina, Chili, Cuba, Japan, Egypt, India and a group of English Railway Companies. Ienumerate this collateral to show the inroads upon British securitiesthat increasing war cost is making. This collateral must always show amarket value margin of twenty per cent above the amount of the loan. Itmeans that should there be any slump the English Government must supplyadditional security. 

This issue was brought out in two forms. Half of the loan is in ThreeYear Notes due November 1, 1919, which were issued at 99¼ and interestand yielding over 5. 75 per cent: the other half is in Five¼ Year Notesdue November 1, 1921, brought out at 98½ and interest and yielding about5. 85 per cent. These Notes are redeemable at the option of theGovernment at various interest dates between 1917 and 1920 at pricesranging from 101 to 105 and interest. 

Having established the precedent of a secured loan, all succeedingEnglish issues in this country have been backed up with amplecollateral. These bonds have a ready market, an important detail thatthe investor must not overlook in purchasing foreign securities. 

Now turn to the borrowings of France in the United States. With thisgreat nation, whose middle name is Thrift, Uncle Sam was no respecter ofpast performance. For the one separate French external loan he exactedhis pound of collateral. As a matter of fact it amounted to nearly aton. 

I refer to the issue of $100, 000, 000 Three Year Five Per Cent Gold Notesbearing the date of August 1, 1916. To float this loan the AmericanForeign Securities Company was formed which arranged to lend the FrenchGovernment $100, 000, 000. As security the Company--it was merely a groupof American bankers, required France to deposit stocks and bonds havinga value at prevailing market and exchange rate of $120, 000, 000. Shouldthe value of these securities fall below this sum they must bereplenished until there is a margin of twenty per cent in excess of theprincipal of the loan. 

These securities throw an interesting sidelight upon the resource of theFrench Republic and its ability to borrow desirable collateral frompatriotic citizens. They include obligations of the Government ofArgentine, Sweden, Norway, Denmark, Switzerland, Holland, Uruguay, Egypt, Brazil, Spain, and Quebec. The most picturesque parcel in the lotis $11, 000, 000 in Suez Canal shares. This stock is one of the corporateheirlooms of France and is very closely held. It not only pays a largedividend but shares in the profits of the company which in peace timesare big. The fact that France should put these prize securities in"hock" is evidence of her determination to keep her credit absolutelyabove reproach. 

The Three Year French Notes were brought out at 98 and interest and atthe time of issue yielded about 5. 73 per cent. 

But all direct French borrowing in America has not been on the pound offlesh basis. For now we come to what might well be called The Loan ofSentiment. It is the $50, 000, 000 City of Paris Five Year Six Per CentGold Bond Issue dated October 15, 1916. It gave Americans theopportunity to pay a substantial tribute of affectionate gratitude forhappy hours spent in the Queen City of Europe and have the prospect of adesirable dividend at the same time. Here is a piece of foreignfinancing with a distinction and a background all its own. Aside fromits purely sentimental phase it is perhaps the only loan floated inAmerica since the war which is dedicated to construction instead ofdestruction. The proceeds are to be used to reimburse the City of Parisfor expenditures in building hospitals and making other necessaryhumanitarian improvements and to provide a sinking fund to meet similardisbursements. Amid the incessant hate and passion of war it ispleasant to find this back water of cooling relief. 

Like most of the foreign issues made during the war it follows thehighly intelligent European practice of putting out loans in smalldenominations so as to be within the reach of the great mass of thepeople. These bonds may be had in multiples of $100 and upward. TheGovernment of France has agreed to permit the exportation of sufficientgold to permit the payment of principal and interest in the yellow metalin New York. The loan--the only external one of the City of Paris--wasbrought out at 98¾ and interest, which would make an investment of6. 30 per cent. In addition to this yield as an investment there is thepossibility of profit in exchange in view of the option to collectprincipal and interest at the rate of 5. 50 francs per dollar instead ofthe normal rate of exchange before the war. 

This statement of possible exchange profits leads us to one of theconspicuous features of the latest National French Loan, which althoughinternal 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 inAmerican money is worth 5. 18 francs. On account of the dislocation inforeign exchange the value of a dollar in French money has risen toapproximately 5. 85 francs. Therefore when you buy a French security interms of francs for American dollars you get a great deal more for yourmoney than you would have received before the war. Hence the possibilityof profit when francs return to normal is large. 

The National French Loan was sold to American investors at an exchangerate of 5. 90, which means that every dollar you employ gives you aprincipal of 5. 90 francs. On this basis the price for the securityissued at a par of 100 would be 87½, which would make the directyield over 5. 70 per cent. Should exchange return to normal, thesubscription price would be equivalent to 75½, which would make thedirect 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 get1000 francs capital: for $741. 52 you receive 5000 francs capital. IfFrench exchange should return to normal and the securities sell at theissue price--87½--the investor would receive $16. 89 for every 100 francsof capital: $168. 88 for every 1000 francs: $844. 39 for every 5000francs. On this basis without regard to income return the holder of 5000francs capital would receive a profit of $103. 94 or over 13. 75 per centon his investment. 

Should the market price of the issue advance to 100 and exchange returnto normal the investor would get $19. 30 for every 100 francs capital;$193. 00 for every 1000 francs capital; $965. 00 for every 5000 francscapital. In this case and again without regard to income return, theholder of 5000 francs capital would receive a net profit of $223. 50 orapproximately 30 per cent. 

This loan is issued in _Rentes_ and in denominations of 100 francs andmultiples. _Rentes_ is the form in which all French Government issuesare brought out at home. The word means interest or income. The Frenchalways refer to their Government Bonds in terms of interest without anymention of principal. This is because _rentes_ are supposed to beperpetual. The new French loan just explained is not redeemable orconvertible before 1931. 

Usually there is no limit to these National French loans. To be inFrance during the war and see the popular response to the appeal forfunds is to have a thrilling experience in the practical side ofpatriotism. 

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 atthe post offices and private institutions waiting for a chance to puttheir money out to work for their country. The French wage worker, be heartisan or street cleaner, needed no coaching in the art of employinghis funds safely and profitably. Just as saving is instinct with him, sois the putting of these savings out to work in a Government bond secondnature. He is the thriftiest and most cautious investor in the world. Hehas established a close and confidential relation with his banker suchas exists in no other nation. Therefore when the French financier offershim Government Bonds or "Loans of Victory" as the war issues areemotionally termed, he does not hesitate. He knows it is all right. 

Alluring as is the possibility of profit in the new French Rente at thepresent abnormal exchange basis, it fades before the prospects forsimilar profit that lie in some of the Russian Government Bondsavailable in the United States. The Imperial Russian Internal Five and aHalf Per Cent Loan of 1916 amounting to 2, 000, 000, 000 roubles willillustrate. 

Ordinarily the Russian rouble is worth 51. 45 cents in American money. Ithas gone down to 32 cents. At this rate of exchange a thousand roublebond bearing interest at 5½ per cent would only cost $320. 00. Based onthe 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. 8per cent on the investment. Figuring roubles at the normal rate ofexchange the yearly yield would be $28. 28 or 8. 8 per cent on theinvestment. 

The fact that roubles are down so low is evidence that Russian credit atthe moment is not as high as it might be. The principal equity behindthis bond, as well as most other Russian securities available inAmerica, is the fact that Russia has immense post-war possibilities. Shewill emerge from the conflict like a giant awakened and with the firstrealisation of her enormous undeveloped resources. To offset this, however, is the lack of stability of Russian Government as compared withthe other Allies which makes all Russian Bonds speculative. 

On account of the difficulty in shipping bonds and the preponderance ofpro-Ally sentiment here, there has been a comparatively small market forGerman and Austrian war issues in the United States. Yet, in the face ofthese handicaps, a considerable market has developed. It is due to twodefinite reasons. One is the desire of the native born and transplantedTeuton to help his country. Many of them appear at the German banks withtheir savings books eager and ready to make financial sacrifice for theFatherland. The other reason is that the German mark has so greatlydepreciated (it has gone down from 23. 82 cents to 17. 65 cents) thatshould it ever come back to anything like normal and the Governmentdoes not repudiate its issues the investment will be very profitable. 

Here is the way it works out: in ordinary times a 4000 mark bond whichwould be the equivalent of a $1000 American piece, costs about $960. Atthe present low rate of exchange the same German bond costs $690. 00 inAmerican money and therefore shows a profit on the exchange basis aloneof $270. 00 or over 28 per cent. Austrian Bonds show even a largerprofit. 

Summarise our war lending and you get a total of all loans tobelligerent Governments since the outbreak of the war that aggregate$1, 828, 600, 000, which is nearly one-third of the whole cost of the CivilWar. Add to this our loans of $185, 000, 000 to Canadian Provinces andCities and $8, 200, 000 to the City of Dublin and to the City of Londonfor water works improvements, a grand total of $2, 075, 800, 000 is rolledup. Of this sum $156, 400, 000 in obligations have matured and been paidoff, which leaves a net debt to us of $1, 919, 400, 000. It divides up asfollows:

 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, UncleSam has got the foreign lending habit and has loaned $117, 000, 000 toLatin-America, mainly to Argentina and Chili: $39, 000, 000 to neutralEuropean nations, including Switzerland, Norway, Greece and Sweden. Notdesiring to play any race favourites, he has speeded China on her way toenlightenment to the extent of $4, 000, 000. 

In buying foreign war bonds--a procedure which in war time naturallyinvolves sentiment--it is wise for the investor to watch his step. Patriotism is all right in its place but unless you can afford tocontribute money for purely emotional reasons, a cold business estimateof the situation is advisable. This applies especially to the man orwoman with savings who cannot afford to take chances. He or she willfind it a good rule to stick to external bonds except under exceptionalconditions. 

One objection to the average internal bond is that with the exception ofEngland the native money has greatly depreciated in international value. Of course, if all these countries finally get back to their oldstandards of wealth, these investments will yield a very large profit. To reap this benefit, however, it will be necessary to hold thesecurities for a considerable period because it will take the warringcountries a long time to "come back. " Another fact in connection withinternal bonds well worth remembering is that while belligerentcountries will scrupulously respect their obligations held by a greatneutral like the United States whose good will and resources will bevery necessary after the close of hostilities, there is the possibility, remote though it may be, that repudiation of home issues may come in theshock of readjustment. 

In a word, in purchasing a foreign war bond be sure to get a stablenational name, accumulated wealth, habits of thrift, an ample taxingpower, and a good conversion basis behind the security. 

Amid all our war lending lurks a menace to future and necessary Americanfinancing. In flush times like these it is comparatively easy for us tospare large sums of money, because such capital is available and notmissed at home. If there was the absolute certainty that all the foreignshort term loans would be paid on maturity there would be no reason toshow the red light. 

But any man who knows anything about the European financial situationalso knows that it will be extremely difficult, almost impossible, forthe fighting nations to meet their obligations within the timespecified. This does not mean that they will be unable to pay. It doesmean, however, that the inroads of the war will have been so terrificthat pressing needs will so continue to pile up that renewals must besought. Thus our money will still be tied up. 

What will happen at home? Simply this. American enterprise which willneed capital for expansion may have to wait. In discussing this matterone 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 setaside an arbitrary sum which would represent the limit that we as anation could lend each year to foreign countries. "

There is still another hardship in this outward flow of our capital. Itlies in the fact that the very attractive terms of the war loans havemade it very difficult for American railroads and corporations tofinance their needs. They must pay more for their requirements than everbefore. 

Yet this war financing has done more for us than merely provide anopportunity for the profitable employment of hundreds of millions ofdollars. It has brought back home about $1, 500, 000, 000 of oursecurities, mostly in railroad, that were held abroad. This has not onlymeant a considerable cutting down in the sum that we formerly had tosend to Europe in interest and dividends, but it has helped to make usmore economically independent. There is still $1, 780, 000, 000 of oursecurities held abroad, and if the war keeps on much longer a greatportion of it is likely to come back. 

There were two good reasons for this liquidation. One was that theholder of the American security in England is subject to a very hightax in addition to the normal income tax on large fortunes. Another wasthe necessity for the mobilisation of American securities to become partof the collateral offered by the British Government for the loans madein this country. In many instances the English owner of Americansecurities has simply loaned them to his country as a patriotic act. Innumerous other cases, however, he has sold them outright and put theproceeds into home war issues. 

You have seen how our millions have joined that greater stream ofEuropean billions to meet the rising tide of war cost. How is this vastdebt to be paid and what is the paying capacity of the nations involved?

In analysing the war debt and its costly hangover for posterity, youmust remember that not all of it is in actual money. The nations at warhave not only taxed their economic reserve through the destruction ofproductive capacity in the loss of men and material--as I have alreadypointed out--but have made a costly and well-nigh permanent drain uponwhat might be called their nervous systems. 

Look for a moment at the American Civil War whose cost was a mere fleabite as compared with the stupendous price of the EuropeanConflagration. At the end of that war only half of its reckoning wasrepresented in the country's bonded debt. After fifty years we are stillpaying in some way for the other and larger outlay, the invisible strainon the country. 

Strange as it may seem in the light of the present frightful ravage inEurope, no country has ever been completely ravaged by war. When Ireturned from Europe more than a year ago, I was convinced that economicexhaustion would be the determining factor: that victory would perch onthe side of the biggest bank roll. After a second trip to the warringlands I am convinced that I was wrong in my first impression. Observation again in England and France leads me to believe that manpower--beef, not gold--will win. The extents to which financial creditcan 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 Europeannations pay?

Since the Allies practically have a monopoly on the American money sentabroad for war purposes, let us briefly look at the equity behind theThing known as National Honour. Its first and foremost bulwark isWealth. Take England first. The wealth of the United Kingdom is$90, 000, 000, 000: the annual income of the people $12, 000, 000, 000. Tothis you can add the wealth, resource and income of all her far-flungcolonies and the immense amount of money due to her from foreigncountries. Unlike France and save for a few Zeppelin raids, the Empireis absolutely free from the ravage of war. The principal assault hasbeen upon her income, for her great Principal is still intact. 

In examining the methods adopted by England and France to meet the costof the war, you find a sharp difference of procedure which ischaracteristic of the countries. Following the British tradition, England is trying to make the war "pay its way" with taxation. Out of atotal 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 athome and abroad. 

The income tax alone will serve to show the enormous increase intribute. From . 04 per cent on small incomes to 13 per cent on large onesbefore the war it has risen to 1 per cent on small incomes to over 41½per cent on big ones. Again, 60 per cent of all excess profits earnedsince the war are surrendered to the State. 

I can give no better evidence of the result of this taxation than torepeat what Reginald McKenna, Chancellor of the British Exchequer, saidto me in London last August:

"The English position is so sound, " he declared, "that if the war endedat 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 wholeof our peace expenditures and the interest on the entire National Debtbut also for a sinking fund calculated to redeem that debt in less thanforty years. There would still remain a surplus sufficient to allow meto wipe out the excess profit tax and to reduce other taxesconsiderably. "

When I asked him to make this more specific, he continued:

"The total revenue for the current year is $2, 545, 000, 000. Our lastPeace Budget was $1, 000, 000, 000. Assuming that the war would end by nextMarch 1st, you must add another $590, 000, 000 for interest and sinkingfund on the war debt together with a further $100, 000, 000 for pensionswhich would make the total yearly expenditure for the first year ofpeace $1, 690, 000, 000. Deducting this from the existing taxation you geta surplus of $855, 000, 000. Thus after withdrawing the $430, 000, 000received 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 somethingbesides debits and credits and balances. It is a great moral force thatdoes not reckon in terms of pounds or pence. There is no thought ofindemnity to soothe the scars of waste: no dream of conquest to atonefor friendly land despoiled. 

Money grubbing has gone, if only for the moment, along with the otherbaser 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 aregiving the nation an economic rebirth: a new idea of the dignity oftoil: they have begot a spirit of denial that is rearing an impregnablerampart of resource. 

Even more marvellous is the financial devotion of the French who presenta spectacle of unselfish sacrifice that merely to touch, as alien, is tohave a thrilling and unforgettable experience. 

When you look into the French method of paying for the war you get thereally picturesque and human interest details. In place of taxation youfind that the war is being paid, in the main, out of the savings of thepeople. Instead of mortgaging the future, the Gaul is utilising histhrifty past. 

Never in all history is there a more impressive or inspiringdemonstration of the value of thrift as a national asset. It has rearedthe bulwark that will enable France to withstand whatever economicattack the war will make. 

The difference between the English and French system of war financingis psychological as well as material. The average Frenchman has a greatdeal of the peasant in him. He is willing to give his life and hishonour 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 evidenceof the French devotion to savings. More than one English officer hastold me of tearful requests from French peasants for permission to goback to their steel-swept and war-torn little farms to dig up the fewhundreds of francs buried in some corner of field or garden. Equallyimpressive is the sight of farmers--usually old men and women--workingin the fields while shells shriek overhead and the artillery rumblesalong dusty highways. 

Thus the French war debt will be met because of the almost incrediblesaving power of the French people. It is at once their pride and theirprosperity. When all is said and done, you discover that with nations aswith individuals it is not what they make but what they save that makesthem strong and enduring. 

One afternoon last summer I talked in Paris with M. Alexandre Ribot, theFrench Minister of Finance: a stately white-bearded figure of a man wholooked as if he had just stepped out of a Rembrandt etching. He sat in arichly tapestried room in the old Louvre Palace where more than one Kinghad danced to merry tune. Now this stately apartment was the nervecentre of a marvellous and close-knit structure that represented a realfinancial democracy. 

"How long can France stand the financial strain of war?" I asked theMinister. 

Light flashed in his eyes as he replied:

"So long as the French people know how to save, and this meansindefinitely. "

Although the invader has crossed her threshold, France continues tosave. Every wife in the Republic who is earning her livelihood while herhusband is at the front (and nearly every man who can carry a gun isfighting or in training), is putting something by. It means the buildingup of a future financial reserve against which the nation can draw forwar 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 othercountry in the world. The United States is next with $19. 39, after whichcome the United Kingdom with $18. 28, and Germany $14. 08. Let me add, inthis connection, that a good deal of the French gold is still instocking and cupboard. 

By the end of 1916 the war had cost France $11, 000, 000, 000, which meansan 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 Francesaves exactly $1, 000, 000, 000 a year. But the Government has one bigtrump card up its sleeve. It is the large fortunes of her citizens. Theyhave been untouched by the war because practically no income tax hasbeen levied. 

While the average Frenchman will sacrifice his life rather than submitto taxation, the upper and wealthy class will do both. The annual incomeof the people of France is $6, 000, 000, 000. Therefore a 12 per cent taxon this income would very nearly produce the entire fixed charge on thewar debt. France looks into the financial future unafraid. 

Financially, Russia ambles along like the Big Bear she typifies. In onerespect her method of financing the war cost differs distinctly from herAllies in the fact that she has received heavy advances from England andFrance. From England alone she borrowed $1, 250, 000, 000 which wasexpended for arms and ammunition and field equipment. The Czar's Empirehas put out five internal loans while the rest of the money needed hasbeen raised out of the sale of short term Treasury Bills, paper moneyissues 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--isself-contained. Through five Imperial 5 per cent loans ranging from oneto three billion dollars each, she has established a war credit of$12, 500, 000, 000. This money--to a smaller degree than in France--hascome from the great mass of the German people. 

Other sources of revenue that are enabling the Kaiser to pay for thewar are Treasury Bills sold at home and a taxation that is moderatecompared with the colossal pre-war taxation which spelled Germany'sPreparedness. At the time I write this chapter her war expenditure hadpassed 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 ofthe war's duration--the immense burden that the Fatherland will have tocarry. The war's drain on the German future is perhaps greater than thatof any other country because all her war loans are long term. She hasalso loaned nearly $1, 000, 000, 000 to Austria, Turkey and Bulgaria. 

The Teutonic war cost has one distinct advantage over all others in thatit is confined within the German borders. Hence Germany can do as shepleases with regard to its settlement. If the Mailed Fist obtains afterthe war she can clamp it down on her loans, wipe them out as she choosesand no one can offer a protest. 

Now let us dump all these statistics that represent so much blood, agonyand sacrifice into the middle of the table and strike a final balancesheet. 

On one hand you have the assets of the warring countries as representedby their national wealth. For the Allies, including Roumania, they showa 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 havethe 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 andItaly, had spent on direct war cost approximately $34, 000, 000, 000, whilethe total Teutonic war expenditures have been $21, 000, 000, 000. To thisactual war cost must be added the peace debts of the belligerent nationswhich would supplement the allied expense account by $17, 465, 000, 000 andthat of the enemy nations by $9, 808, 000, 000. 

Striking a grand total of liabilities, you find that if the warmercifully ends by August 1, 1917 (as Kitchener predicted it might), thefighting 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 everbe possible for European finance to see straight or count normallyagain?

Be that as it may, no one can doubt that the battling nations, individually or with the marvellous team-work that kinship in theirrespective causes has begot, are able to pay their way while thestruggle lasts. Grim To-day will take care of itself under the stress ofpassion born of desire to win. It is the Reckoning of that UncertainTo-morrow that will prove to be the problem. 

You cannot bankrupt a nation any more than you can ruin an individual solong as brains and energy are available. Peace therefore will not find aruined Europe but it will dawn on a group of depleted countries facingenormous responsibilities. War ends but the cost of it endures. Just aspresent millions are paying with their lives so will unborn hosts paywith the sweat of their brows. 

Meanwhile our Financial Stake in the Great Struggle is secure. How muchmore we will have to put into Europe's Red Pay Envelope remains to beseen. 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 littlegrey-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 stationwhen I bade him farewell after a memorable day. With him I had gone toBristol where he had made an impassioned plea for harmony to the TradeUnion Congress. Then he was Minister of Munitions, Shell-Master of theNation in its critical hour of Ammunition Need. 

Now he had succeeded the lamented Kitchener as Minister of War; sat inthe Seat of Strategy, head of the far-flung khakied hosts that even atthis moment were breasting death on half a dozen fronts. Just as twelvemonths before he had unflinchingly met the Great Emergency thatthreatened his country's existence, so did he again fill the NationalBreach. 

England's Man of Destiny whose long career is one continuous andspectacular public performance was on the job. 

But it was not the same Lloyd George who had sounded the call forMilitary and Industrial Conscription from the Peaks of Empire. Anotheryear of war had etched the travail of its long agony upon his features, saddened the eyes that had always beheld the Vision of the GreaterThings. The little man was fresh from the front and full of all that itsmighty sacrifice betokened not only to the embattled nations but to theworld as well. 

Though we spoke of Politics, Presidents and the Great Social Forces thatso far as England was concerned acknowledged him as leader, the currentof 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 forAmerica?"

Throughout our talk he had sat in a low chair sometimes tilting itbackward as he swayed with the vehemency of his words. Suddenly hebecame still. He turned his head and looked dreamily out the window athis left where he could see the throng of Whitehall as it swept backand forth along London's Great Military Way. 

Then rising slowly and with eloquent gesture and trembling voice (hemight have been speaking to thousands instead of one person), he said:

"The hope of the world is that America will realise the call thatDestiny is making to her in tones that are getting louder and moreinsistent as the terrible months go by. That Destiny lies in theenforcement of respect for International Law and International Rights. "

It was a pregnant and unforgettable moment. From the Throne Room of aMighty Conflict England's War Lord was sounding the note of a distantprocess of peace. 

If you had probed behind this kindling utterance you would have seenwith Lloyd George himself that beyond the flaming battle-lines and pastthe tumult of a World at War was the hope of some far-away Tribunal thatwould judge nations and keep them, just as individuals are kept, in thepath of Right and Humanity. 

But before any such bloodless antidote can be applied to InternationalDispute, to quote Lloyd George again: "This war must be fought to afinish. "

These final words, snapped like a whip-lash and emphasised with afist-beat on the table, meant that England would see her Titan Taskthrough and if for no other reason because the man who drives the wargods wills it so. What sort of man is this who goes from post to postwith inspired faith and unfailing execution? What are the qualities thathave lifted him from obscure provincial solicitor to be the Prop of aPeople?

"Let George do it, " has become the chronic plea of all Britain in hertime of trial. How does he do it?

To understand any man you must get at his beginnings. Thus to appreciateLloyd George you must first know that he is Welsh and this means that hewas 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 mingledsnow and sunshine, of poetry and passion. About him love of libertyclashed with vested tyranny. These conflicting things shaped hischaracter, entered into his very being and made him temperamentally acreature 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. Youbehold the Apostle of Peace who once espoused the Boer, translated intothe flaming Disciple and Maker of War through the Rape of Belgium. Yousee the fiery Radical, jeered and despised by the Aristocracy, becomethe Protector of Peers. No wonder he stands to-day as the mostpicturesque, compelling and challenging figure of the English speakingrace. Only one other man--Theodore Roosevelt--vies with him for thismany-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: thepolitical protege of a Militant Nationalist whose heart bled at theoppression of the Welsh, Lloyd George early looked out upon a lifesmarting with grievance and clamouring to be free. Knowing this, you canunderstand that the dominant characteristic of this man is to rebelagainst established order. Swaddled in Democracy, he became itsEmbodiment and its Voice. 

The world knows about the Lloyd George childhood spent amidst poverty ina Welsh village. The big-eyed boy ate, thought and dreamed in Welsh, "the language that meant a daily fare of barley bread. " When he learnedEnglish it was like acquiring a foreign tongue. He grew up amid a greatrevival of Welsh art, letters and religion that stirred his soul. Hemissed the pulpit by a narrow margin, yet he has never lost theevangelistic fervour which is one of the secrets of his control andcommand of people. 

With the alphabet Lloyd George absorbed the wrongs of his people andthey were many. The Welsh had a double bondage: the grasp of theLandlord and the Thrall of the Church. All about him quivered theaspiration for a free land, a free people and a free religion. In thosedays Wales was like another Ireland with all the hardship that Evictionimposes. 

The call to leadership came early. As a boy in school he led his matesin rebellion against the drastic dictates of a Church which prescribedliberty of religious thoughts and speech. He became the Apostle ofNonconformity and for it waged some of his fiercest battles. 

Always the gift of oratory was his. He preached temperance almost withhis advent into his teens: he was a convincing speaker before most boystalked straight. 

In due time Lloyd George became a solicitor but it was merely the stepinto public life. To plead is instinct with him and with advocacy of acase in court he was always urging some reform for his little country. Politics was meat and drink to him and he stood for Parliament. Anardent Home Ruler, he swayed his followers with such intensity that whatcame to be known as Lloyd George's Battle Song sprang into being. Sungto the American tune of "Marching Through Georgia" it was hailed as thefighting hymn of Welsh Nationalism. Two lines show where the young Welshlawyer 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. " TheTories 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 notrealised that the day of the cottage-bred man has dawned. "

Before he got through he was destined to show, that so far asopportunity was concerned, the Cottage in Great Britain was to be on apar with a Palace. 

As you analyse Lloyd George's life you find that he has always been asort of Human Lightning Rod that attracted the bolts of abuse. Acampaign meant violent controversy, frequently physical conflict. Thereason was that he always stated his cause so violently as to arousebitter resentment. 

Into his first election he flung himself with the fury of youth and theeager passion of a zealot. He threw conventional Liberalism to the windand made a fight for a Free and United Wales. He frankly believedhimself to be the inspired leader of his people: often his meetingsbecame riots. More than once he was warned that the Tories would killhim and on several occasions he narrowly escaped death. Once whileriding with his wife in an open carriage through the streets of Bangorhe was assailed by a hooting, jeering mob. Some one threw a blazing fireball, dipped in paraffine, into the vehicle. It knocked off thecandidate's hat and fell into Mrs. Lloyd George's lap setting her afire. Lloyd George threw off his coat, smothered the flames and after findingthat the innocent victim of the assault was uninjured, calmly proceededto the Town Hall where he spoke, accompanied by a fusillade of stoneswhich smashed every window in the structure. 

In this campaign, as in all succeeding ones, Lloyd George used the fullpowers of press publicity. He made reporters his confidants. Often herehearsed his speeches before them, striding up and down and declaimingas passionately as if he were facing huge audiences. In fact he acquiredan interest in a group of Welsh papers. 

Already Welsh chieftainship was being crystallised in the aggressivelittle fire-eater. Anticipating the coming call of the Mother Countryshe was laying her burdens on his stalwart shoulders. And what Georgewas now doing for Wales he was soon to do in the larger arena of theEmpire. 

Once in Parliament Lloyd George was no man's man. He became a free lanceand while sometimes he ran amuck his cause was always the cause of hispeople. 

In those earlier Parliamentary days you find some of the traits thatdistinguished him later on. For one thing he disdained the drudgery ofcommittee work: he chafed at the confinement of the conference room;eagle-like he yearned to spread his wings. His forte was talking. Heloathed to mull over dull and unresponsive reports. He frankly admitteda disinclination to work, and it makes him one of the most superficialof men in what the world calls culture. His intelligence has more thanonce been characterised as "brilliant but hasty. "

But offsetting all this is the man's persuasive and pleading personalitywhich always gets him over the shallow ground of ignorance. This is onereason why Lloyd George has always been stronger in attack than indefence. His tactic has always been either to assault first or make aswift counterdrive. He is a sort of Stonewall Jackson of Debate. 

Then, as throughout his whole career, he showed an extraordinaryaversion to letter-writing. He became known in Parliament as the "GreatUnanswered. " He used to say, and still does, that an unanswered letteranswers itself in time. This led to the tradition that the only way toget a written reply out of Lloyd George was to enclose two addressed andstamped cards, one bearing the word "Yes" and the other "No. " More thanonce, however, when friends and constituents tried this ruse they gotboth cards back in the same envelope!

Not long ago a well known Englishman wanted to make a written request ofLloyd George and on consulting one of his associates was given thisinstruction: "Make it brief. Lloyd George never reads a letter thatfills more than half a page. "

There is no need of rehearsing here the long-drawn struggle throughwhich he made his way to party leadership. In Parliament and out, he wasa hornet--a good thing to let alone, and an ugly customer to stir up. Whether he lined up with the Government or Opposition it matteredlittle. Lloyd George has always been an insurgent at heart. 

The crowded Nineties were now nearing their end, carrying England andLloyd George on to fateful hour. Ministries rose and fell: Roseberry andHarcourt had their day: Chamberlain climbed to power: Asquith rose overthe horizon. The long smouldering South African volcano burst intoeruption. It meant a great deal to many people in England but to no manquite so much as to Lloyd George. 

Now comes the first of the many amazing freaks that Fate played withhim. The Institution of War which in later years was to make him thevery Rock of Empire was now, for a time at least, to be his undoing. 

Before the conflict with the Boers Lloyd George was a militantpacifist--a sort of peacemaker with a punch. When England invaded theTransvaal Lloyd George began a battle for peace that made him for thefirst time a force in Imperial affairs. He believed himself to be theAnointed Foe of the War and he dedicated himself and all his powers tostem what seemed to be a hopeless tide. 

It was a courageous thing to do for he not only risked his reputationbut his career. Up and down the Empire he pleaded. He was in somerespects the brilliant Bryan of the period but with the difference thathe was crucifying himself and not his cause upon the Cross of Peace. Hebecame the target of bitter attack: no epithet was too vile to hurl uponhim. Often he carried his life in his hands as the episode of theBirmingham riot shows. In all his storm tossed life nothing approachedthis in daring or danger. 

Lloyd George was invited to speak in the Citadel of Imperialism whichwas likewise the home of Joseph Chamberlain, Arch-Apostle of the BoerWar. 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 wouldimperil his life if he even showed himself. He sent back this word: "Iam announced to speak and speak I will. "

He reached Birmingham ahead of schedule time and got to the home of hishost in safety. All day long sandwich men paraded the highways bearingplacards calling upon the citizenry to assemble at the Town Hall whereLloyd 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 hefaced turmoil. Hundreds of men carried sticks, clubs and bricks coveredwith rags and fastened to barbed wire. When he rose to speak Bedlam letloose. Jeers, catcalls and frightful epithets rained on him and withthem rocks and vegetables. He removed his overcoat and stood calm andsmiling. When he raised his voice, however, the grand assault was made. Only a double cordon of constables massed around the stage kept him frombeing overwhelmed. In the free-for-all fight that followed one man waskilled and many injured. 

Anything like a speech was hopeless: the main task was to save thespeaker's life, for outside in the streets a bloodthirsty rabble waitedfor its prey. Lloyd George started to face them single-handed and itwas only when he was told that such procedure would not only foolishlyendanger his life but the lives of his party which included severalwomen, he consented to escape through a side door, wearing a policeman'shelmet and coat. 

Fourteen years later Lloyd George returned to Birmingham acclaimed as aSaviour of Empire. Such have been the contrasts in this career ofcareers. 

Fortunately England, like the rest of the world, forgets. The mists ofunpopularity that hung about the little Welshman vanished under thesheer brilliancy of the man. When the Conservative Government fell afterthe Boer War he was not only a Cabinet possibility but a necessity. TheGovernment had to have him. From that time on they needed him in theirbusiness. 

Lloyd George drew the dullest and dustiest of all portfolios--the Boardof Trade. He found the post lifeless and academic; he vivified andgalvanised it and made it a vital branch of party life and dispute. Itis the Lloyd George way. 

Here you find the first big evidence of one of the great Lloyd Georgequalities that has stood him in such good stead these recent turbulentyears. He became, like Henry Clay, the Great Conciliator. The wholewidespread labour and industrial fabric of Great Britain was geared upto his desk. It shook with unrest and was studded with strife. Much ofthis clash subsided when Lloyd George came into office because he hadthe peculiar knack of bringing groups of contending interests together. Men learned then, as they found out later, that when they went intoconference with Lloyd George they might as well leave their convictionsoutside the door with their hats and umbrellas. 

To this policy of readjustment he also brought the laurel ofconstructive legislation. To him England owes the famous Patents Billwhich gives English labour a share in the English manufacture of allforeign invention; the Merchant Shipping Bill which safeguards theinterest of English sailor and shipper; and the Port of London Billwhich made the British metropolis immune from foreign ship menace. 

England was fast learning to lean on the grey-eyed Welshman. He came tobe known as the "Government Mascot": he was continually pulling hisparty's chestnuts out of the fire of failure or folly. George had begunto "do it" and in a big way. 

Likewise the whole country was beginning to feel pride in hisperformance as the following story, which has been adapted to variousother celebrities, will attest:

Lloyd George sat one day in the compartment of a train that was held upat the station at Cardiff. A porter carrying a traveller's luggagenoticed 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 attentionto the budding great man. After persistent efforts to rouse hisinterest, 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 noone was surprised. It is typical of the man that he should have leapedfrom the lowest to the highest place but one in the Cabinet. 

As Chancellor he had at last the opportunity to fulfill his democraticdestiny. Whatever Lloyd George may be, one thing is certain: he isessentially a man of the masses. With his famous People's Budget helegislated sympathy into the law. It meant the whole kindling socialprogramme of Old Age pensions, Health and Unemployment insurance, increased income tax and an enlarged death duty. As most people know, itput much of the burden of English taxation on the pocketbooks of thepeople 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 FreeLand. All his amazing picturesqueness of expression came into play. Hecontended that Monopoly had made land so valuable in Britain that italmost sold by the grain, like radium. In commenting on the heavy taxeslevied by the land autocrats upon commercial enterprise in London hemade his famous phrase:

"This is not business. It is blackmail!"

To democracy the Budget meant economic emancipation: the banishment ofhunger from the hearth: the solace of an old age free from want. It madeLloyd George "The Little Brother of the Poor. " To the Aristocracy it wasthe 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 mostdetested man in England. To hate him was one of the accomplishments oftitled folk to whom his very name was a hissing and a by-word. Massedbehind him were the common people whose champion he was: arrayed againsthim were the powers of wealth and rank. 

In this campaign Lloyd George used the three great weapons that he hasalways brought to bear. First and foremost was the force of hispersonality, for he swept England with a tidal wave of impassionedeloquence. Second, he unloosed as never before the reservoirs of ink, for he used every device of newspaper and pamphlet to drive home hismessage. He even printed his creed in Gaelic, Welsh and Erse. Third, heemployed his kinship with the people to the fullest extent. The Commonerwon. As the great structure of social reform rose under his dynamicpowers so did the influence of the House of Lords crumble like anEdifice of Cards. Democracy in England meant something at last!

The tumult and the shouting died, the smoke cleared, and Lloyd Georgestood revealed as England's Strong Man, a sort of Atlas upholding theWorld of Public Life and much of its responsibilities. 

Now for the first time he was caught up in the fabric of the Crimson Netthat a few years later was to haul nearly all Europe into war. In 1911Germany made a hostile demonstration in Morocco. Although England had noterritorial interests there, it was important for many reasons to warnthe Kaiser that she would oppose his policy with armed force ifnecessary. A strong voice was needed to sound this note. Lloyd Georgedid it. 

Hence it came about that the Chancellor of the Exchequer stood in theMansion House on a certain momentous day and hurled the defi at the WarLord. It called the Teuton bluff for a while at least. In the light oflater events this speech became historic. Not only did Lloyd Georgedeclare that "national honour is no party question, " but he affirmedthat "the peace of the world is much more likely to be secured if allthe nations realise fairly what the conditions of peace must be. "

Persistent pacifist propagandists to-day may well take warning from thatutterance. He still believes it. 

The spark that flashed at Agadir now burst into flame. The Great Warbroke and half the world saw red. What Lloyd George believed impossiblenow became bitter and wrathful reality. Though he did not know it at themoment, the supreme opportunity of his life lay on the lap of the god ofBattles. 

The Lloyd George who sat in council in Downing Street was no dreamingpacifist. He who had tried to stop the irresistible flood of the BoerWar now rode the full swell of the storm that threatened for the momentto engulf all Britain. 

As Chancellor of the Exchequer he was called upon to shape the fiscalpolicies that would be the determining factor in the War of Wars. "Thelast £100, 000, 000 will win, " he said. Only one other man inEngland--Lord Kitchener--approached him in immense responsibility ofoffice in the confidence of the people. It was a proud but equallyterrifying moment. 

Then indeed the little Welshman became England's Handy Man. As custodianof the British Pocketbook he had a full-sized job. But that was onlypart of the larger demand now made on his service. Popular faithregarded him as the Nation's First Aid, infallible remedy for everycrisis. 

If a compromise with Labor or Capital had to be effected it was LloydGeorge who sat at the head of the table: if an Ally needed counsel orinspiration it was the Chancellor who sped across the water and laiddown the law at Paris or Petrograd: if the Cause of Empire clamoured forexpression from Government Seat or animated rostrum, he stood forth asthe Herald of Freedom. So it went all through those dark closing monthsof 1914 as reverse after reverse shook the British arms and brought homethe realisation that the war would be long and costly. 

The year 1915 dawned full of gloom for England but pointing a fresh starfor the career of Lloyd George. Although the first wave of Kitchener'snew army had dashed against the German lines in France and establishedanother tradition for British valour, the air of England became chargedwith an ominous feeling that something was wrong at the front. TheGerman advance in the west had been well nigh triumphant. Recklessbravery alone could not prevail against the avalanche of Teutonic steel. 

All the while the imperturbable Kitchener sat at his desk in the WarOffice--another man of Blood and Iron. He ran the war as he thought itshould 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 theconduct of war had changed mightily since Kitchener last led his troops. Like Business it had become a new Science, fought with new weapons anddemanding an elastic intelligence that kept pace with the swift march ofmilitary events. The Germans were using every invention that marvellousefficiency and preparedness could devise. They met ancient Englandshrapnel with modern deadly and devastating high-explosives. If the warwas to be won this condition had to be changed--and at once. 

Two men in England--Lloyd George and Lord Northcliffe--understood thissituation. Fortunately they are both men of courageous mould andunwavering purpose. One day Northcliffe sent the military expert of the_Times_ (which he owns) to France to investigate conditions. He foundthat the greatest need of the English Army was for high-explosives. Theywere as necessary as bread. Into less than a quarter of a column hecompressed this news. Instead of submitting it to the Censor who wouldhave denied it publication, Northcliffe published the despatch and withit the revelation of Kitchener's long and serious omission. He not onlyrisked suspension and possible suppression of his newspapers, but alsohazarded his life because a great wave of indignation arose over whatseemed to be an unwarranted attack upon an idol of the people. But itwas the truth nevertheless. 

At a time when England was supposed to be sensation-proof thisrevelation fell like a forty-two centimetre shell. It was an amazingand dramatic demonstration of the power of the press and it created asensation. 

Shell shortage at the front had full mate in a varied deficiency athome. Ammunition contracts had been let to private firms at excessiveprices: labour was restricting output and breaking into periodicdissension: drink was deadening energy: in short, all the forces thatshould have worked together for the Imperial good were pulling apart. 

Northcliffe began a silent but aggressive crusade for reform in hisnewspapers, while Lloyd George let loose the powers of his tongue. Anational crisis, literally precipitated by these two men, arose. TheLiberal Government fell and out of its wreck emerged the CoalitionCabinet. This welding of one-time enemies to meet grave emergency didmore than wipe out party lines in an hour that threatened the Empire'svery existence. 

The reorganised Cabinet knew--as all England knew--that the greatestrequirement was not only men but munitions. A galvanic personality wasnecessary to organise and direct the force that could save the day. Anew Cabinet post--the Ministry of Munitions--was created. Who couldfill it was the question. There was neither doubt nor uncertainty aboutthe 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 thatweaker hands had laid down. Here, however, was a situation withoutprecedent in a life that was a rebuke to convention. To succeed to anorganised and going post these perilous war times was in itself adifficult job. In the case of the Ministry of Munitions there wasnothing to succeed. Lloyd George had been given a blank order: it was upto him to fill it. He had to create a whole branch of Government fromthe ground up. All his powers of tact and persuasion were called intoplay. For one thing he had to fit the old established OrdnanceDepartment rooted in tradition and jealous of its prerogatives into thenew scheme of things. 

Lloyd George was no business man, but he knew how business affairsshould be conducted. He knew, too, that America had reared the empire ofbusiness on close knit and efficient organisation. He did what AndrewCarnegie or any other captain of capital would do. He called togetherthe Schwabs, the Edisons, the Garys and the Westinghouses of the Kingdomand made them his work fellows. 

From every corner of the Empire he drafted brains and experience. Hewanted workers without stint, so he started a Bureau of Labor Supply: heneeded publicity, so he set up an Advertising Department: to competewith the Germans he realised that he would need every inventive resourcethat England could command, so he founded an Invention and ResearchBureau: he saw the disorganisation attending the output of shells inprivate establishments, so he planted the Union Jack in nearly everymill and took over the control of British Industry: he found labour atits old trick of impeding progress, so with a Munitions Act hepractically conscripted the men of forge and mill into an industrialarmy that was almost under martial law. He cut red tape and injected redblood 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 Gardenwhere belles and beaux had danced the stately minuet. It became a dynamoof energy whose wires radiated everywhere. "More Munitions" was thecreed that flew from the masthead. 

A typical thing happened. The working force of the Ministry grew byleaps and bounds: already the hundreds of clerks were jam up against theconfining walls of the old grey building. Lloyd George sent for one ofhis lieutenants and said:

"We must have more room. "

"We have already reported that fact and the War Office says it will takethree months to build new office space, " was the reply. 

"Then put up tents, " snapped the little man, "and we will work undercanvas. "

Realising that his principal weapons were machines, Lloyd George took acensus of all the machinery in the United Kingdom and got every pound ofproductive capacity down on paper. He was not long in finding out whythe ammunition output was shy. Only a fifth of the lathes and tools usedfor Government work ran at night. "These machines must work every hourof the twenty-four, " he said. Before a fortnight had passed everymunitions mill ground incessantly. 

These machines needed adequate manning. Lloyd George thereupon createdthe plan that enlisted the new army of Munitions Volunteers. Nelson-likehe issued the thrilling proclamation that England expected every machineto 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 certainhours: the man who brought liquor into a Government controlled plantfaced fines and if the offence was repeated, a still more drasticpunishment. 

Lloyd George began a censorship of labour which disclosed the fact thatmany skilled workers were wasting time on unskilled tasks. Lloyd Georgenow began to dilute the skilled forces with unskilled who includedthousands of women. 

Right here came the first battle. Labour rebelled. It could find a wayto get liquor but it resented dilution and cried out against capacityoutput. The Shell Master again became the Conciliator. He curbed thewild horses, agreeing to a restoration of pre-war shop conditions assoon as peace came. All he knew was the fact that the guns hungered andthat it was up to him to feed them. 

The wheels were not whirring fast enough to suit Lloyd George. "We mustbuild our own factories, " he said. Almost over night rose the millswhose slogan was "English shells for English guns. " In speeding up theEnglish output the Welshman was also equipping England to meet comingneeds, laying the first stone of the structure that is fast becoming anEmpire Self-Contained. 

Lloyd George realised that he could not run every munitions plant, whereupon he organised local Boards of Control in the great ordnancecentres like Woolwich, Sheffield, Newcastle and Middleboro. Each becamea separate industrial principality but all bound up by hooks of steel tothe Little Wizard who sat enthroned at Whitehall. 

England became a vast arsenal, throbbing with ceaseless activity. Thesmoke that trailed from the myriad stacks was the banner of a new andtriumphant faith in the future. 

What was the result? Up and down the western battle front English cannonspoke in terms of victory. No longer was British gunner required tohusband shells: to meet crash with silence. He hurled back steel forsteel and all because England's Hope had answered England's Call. LloydGeorge had done it again. 

I first met Lloyd George during those crowded days when he wasCommander-in-Chief of the host that fed the firing line. Under hismagnetic direction British industry had been forged into a colossalmunitions shop. No man in England was busier: not even the King was moreinaccessible. Life with him was one engagement after another. 

Now came one of those swift emergencies that seems to crowd so fast uponLloyd George's life and with it arose my own opportunity. 

The British Trade Union Congress in annual session at Bristol hadexpressed Labour's dissatisfaction over its share of the munitionsprofits. Lloyd George had sent them a letter explaining his proposedexcess profit tax, but this apparently was not enough. The delegatesstill growled. 

"Then I'll go down and speak to them in person, " said the Minister withcharacteristic energy. 

Thus it happened that I journeyed with him to the old town, backgroundof stirring naval history. On the way down half a dozen department headspoured into his responsive ears the up-to-the-minute details of the workin 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 startalmost a menacing crowd. Yet as he addressed them you would have thoughtthat he had known every man and woman in the assembly all their lives. The easy, intimate, frank manner of his delivery: his immediate claim tokinship with them on the ground of a common lowly birth: his quick andstirring appeal to their patriotism swept aside all discord anddisaffection. As he gave an eloquent account of his stewardship youcould see the audience plastic under his spell. The people who hadassembled to heckle sat spellbound. When he had finished they not onlygave him an ovation but pledged themselves anew to the gospel of "MoreMunitions. "

It was on the train back to London that I got a glimpse of the realLloyd George. What Roosevelt would have called "a bully day" had leftits impress upon the little man. His long grey hair hung matted over awilted collar: there was a wistful sort of weariness in his eyes. Hesank into a big chair and looked for a long time in silence at theflying landscape. Then suddenly he aroused himself and began to talk. Like many men of his type whom you go to interview he began byinterviewing the interviewer. 

The first two questions that Lloyd George asked me showed what was goingon in his mind, for they were:

"What were Lincoln's views of conscription, and did your soldiers voteduring the Civil War?"

There was definite method in these queries, for already the Shadow ofConscription 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 speechat Bristol his face kindled and he said:

"Have you stopped to realise that this war is not so much a war of humanmass against human mass as it is a war of machine against machine? It isa 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 whichhe said:

"The European struggle is a struggle for world liberty. It will mean inthe end a victory for all democracy in its fight for equality. "

When I asked him to write an inscription for a friend of mine andexpress the hope that lay closest to his heart, he took a card from hispocket, gazed for a moment at the rushing country now shot through withthe first evening lights, and then wrote: "Let Freedom win. "

A few days later Lloyd George made still another appearance in his nowfamiliar 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 tothe Empire. There is no need of asking the name of the man who went tocalm this storm. Only one was eligible and he lost no time. 

Lloyd George did not call a conference at Cardiff: he went straight toWales and spoke to the workers at the mouth of the pit. What arbitrationand conciliation had failed to do, his hypnotic oratory achieved. Themen went back to the mines with a cheer. 

A week later at the London Opera House he made a notable speech to theConference of Representatives of the Miners of Great Britain. To haveheard that speech was to get a liberal education in the art ofphraseology 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 acclaimtheir gallant countryman as Industrial Messiah. 

You would think that by this time England had made her final tax on theresource of her Ready Man. But she had not. There came the desolate daywhen the news flashed over England that the "Hampshire" had gone downand with it Kitchener. Following the shock of this blow, greater thanany that German arms could deliver, arose the faltering question, "Whois there to take his place?"

It did not falter long. Once more the S. O. S. Call of a Nation inDistress flashed out and again the spark found its man. Lloyd Georgewent from Ministry of Munitions to sit in Kitchener's seat at the WarOffice. Unlike the Hero of Khartoum, he had no service in the field tohis credit. But he knew men and he also knew how to deploy them. Just ashe brought the Veterans of Business to sit around the Munitions Board, so did he now marshal war-tried campaigners for the Strategy Table. TheSomme blow was struck: the new War Chieftain proved his worth. 

In the midst of all these new exactions Lloyd George found time forother and arduous national labours. Two more episodes will serve toclose this narrative of unprecedented achievement. 

When the recent Irish Revolt had registered its tragedy of blood, deathand execution, menacing the very structure of Empire, Lloyd Georgebecame the Emissary of Peace to the Isle of Unrest. 

Again, when prying peacemakers sought to intrude themselves upon thenations engaged in a life and death struggle, it was Lloyd George, in aremarkable interview, who warned all would-be winners of the Nobel prizethat peace talk was unfriendly, that "there was neither clock norcalendar in the British Army, " that the Allies would make it a finishfight. 

So it went until gloom once more took up its abode amid the Allies. Bucharest fell before the German assault: Greece seethed with theunhappy 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. Herealised the futility of a many-headed direction of the war: with hisswift insight he saw the tragic toll that all this cross purpose wastaking. He made a demand on Asquith for a small War Council that wouldput dash, vigour and success into the British side of the conflict. ThePremier refused to assent and Lloyd George resigned as War Chief. TheGovernment toppled in a crisis that menaced the very future of thenation. 

Great Britain stood aghast. Lloyd George stood for all the popularconfidence in victory that the nation felt. For a moment it appeared asif the very foundations of authority had crumbled. 

But not for long. When Bonar Law declined to reestablish the Governmentthe oft-repeated cry for action that had invariably found its answer inthe intrepid little Welshman, again rose up. Upon him devolved the taskof constructing a new Cabinet which he headed as Prime Minister. He nowreached the inevitable goal toward which he had unconsciously marchedever since that faraway day when his voice was first heard inParliament. 

Even with Cabinet-making Lloyd George was a Revolutionist. He cut downthe membership from twenty-four to five, establishing a compact andeffective War Council whose sole task is to "win the war. " He centredmore authority in the Premiership than the English system has ever knownbefore. He virtually became Dictator. 

On the other hand, he raised the number of Ministers outside the Cabinetfrom nineteen to twenty-eight. He scattered the coterie of lawyers whohad so long comprised the Government Trust and put in men with red bloodand proved achievement--in the main, self-made like himself. Heinstalled a trained and competent business man of the type of Sir AlbertStanley, raised in the hard school of American transportation, asPresident of the Board of Trade: he drafted a seasoned commercialveteran like Lord Rhondda (D. A. Thomas), for President of the LocalGovernment 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 putSir Joseph Maclay, an extensive ship owner, into the post of ShippingController. Everywhere he supplanted politicians with doers. 

What was equally important he continued his rôle of Conciliator, for heplacated Labour by giving it a large representation and he took adefinite step toward the solution of the Irish problem by making SirEdward Carson First Lord of the Admiralty. 

Even as he stood at what seemed the very pinnacle of his power Destinyonce more marked him for its own. He had scarcely announced his Cabinetwhen 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 theCouncil charged with the conduct of the war. To the Wizard Welshmantherefore was put squarely the responsibility of continuing or endingthe stupendous struggle. 

Never before in the history of any country was such momentousresponsibility concentrated in an individual. The dramatic element withwhich Lloyd George had become synonymous, found an amazing expression. He was ill in bed when the German suggestion was made. No officialannouncement of England's position in reply could be made until he hadrecovered. In the interim the whole world trembled with suspense whilestock markets shivered. The Premier's name was on every tongue: the eyesof 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 theforce and fervour at his command, he stated the Empire's determinationto fulfill its obligations to the trampled and ravaged countries. Onthat speech hung the stability of international financial credit, thelives of millions of men and the whole future security of Europe. 

You have seen the moving picture of a tumultuous life: what of thepersonality behind it?

Reducing the Prime Minister to a formula you find that he is fifty percent 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 andwell-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 isLloyd George than to point this live parallel. For Lloyd George is theBritish Roosevelt--the Imperial Rough Rider. Instead of using the BigStick, he employs the Big Voice. No two leaders ever had so much incommon. 

Each is more of an institution than a mere man: each dramatises himselfin everything he does: each has the same genius for the benevolentassimilation of idea and fact. They are both persistent but brilliant"crammers. " Trust Lloyd George to know all about the man who comes tosee him whether he be statesman, author, explorer or plain captain ofindustry. It is one of the reasons why he maintains his amazingpolitical hold. 

Lloyd George has Roosevelt's striking gift of phrase-making, although hedoes not share the American's love of letter writing. As I have alreadyintimated, whatever may be his future, Lloyd George will never beconfronted by accusing epistle. None exists. 

Like Roosevelt, Lloyd George is past master in the art of effectivepublicity. He has a monopoly on the British front page. Each of theseremarkable men projects the fire and magnetism of his dynamicpersonality. Curiously enough, each one has been the terror of theCorporate Evil-doer--the conspicuous target of Big Business in hisrespective country. Each one is a dictator in the making, and it is safeto assume that if Lloyd George lived in a republic, like Roosevelt hewould say: "My Army, " "My Navy" and "My Policies. "

Roosevelt, however, has one distinct advantage over his Britishcolleague in that he is a deeper student and has a wider learning. 

In one God-given gift Lloyd George not only surpasses Roosevelt butevery other man I have ever met. It is an inspired oratory that is atonce the wonder and the admiration of all who hear it. He is in manyrespects the greatest speaker of his day--the one man of his race whoseutterance immediately becomes world property. The stage lost a greatstar when the Welsh David went into politics. There are those who saythat he acts all the time, but that is a matter of opinion dictated bypartisan or self-interest. 

Lloyd George is what we in America, and especially those of us born inthe South, call the "silver-tongued. " His whole style of delivery isemotional and greatly resembles the technique of theBreckenridge-Watterson School. In his voice is the soft melodious liltof the Welsh that greatly adds to the attractiveness of his speech. 

Before the public he is always even-tempered and amiable, serene andsmiling, quick to capitalize interruption and drive home the chanceremark. He invariably establishes friendly relations with his hearers, and he has the extraordinary ability to make every man and woman in theaudience before him believe that he is getting a direct and personalmessage. 

Lloyd George can be the unfettered poet or the lion unleashed. Shut youreyes as you listen and you can almost hear the music of mountain streamsor the roar of rushing cataracts. In his great moments his eloquence islittle short of enthralling, for it is filled with an inspired imagery. No living man surpasses him in splendour of oratorical expression. Hisspeeches form a literature all their own. 

When, for example, yielding to that persistent Call of Empire for hisservice he interpreted England's cause in the war at Queen's Hall inLondon, in September, 1914, in what was in many respects his noblestspeech, he said in referring to Belgium and Servia:

"God has chosen little nations as the vessels by which He carries Hischoicest wines to the lips of humanity, to rejoice their hearts, toexalt their vision, to stimulate and strengthen their faith; and if wehad stood by when two little nations were being crushed and broken bythe brutal hands of barbarism, our shame would have rung down theeverlasting ages. "

In closing this speech which he gave the characteristic Lloyd Georgetitle of "Through Terror to Triumph, " he uttered a peroration full ofmeaning and significance to United States in its present hour of prideand 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-knitfigure, broad of shoulder and deep of chest. The animated body issurmounted by a face that alternately beams and gleams. There arestrength and sensitiveness, good humour, courage and resolution in thesefeatures. His eyes are large and luminous, aglow at times with thepoetry of the Celt: aflame again with the fervour of mighty purpose. Hemoves 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 heis like a man exalted: in repose he becomes tender, dreamy, almostchildlike. His whole nature seems to be driven by a vast and volcanicenergy. This is why, like Roosevelt, he has been able to crowd theachievements of half a dozen careers into one. He is indeed the HappyWarrior. 

Yet Lloyd George knows how to play. I have known him to work incessantlyall day and follow the Ministerial game far into the night. Ten o'clockthe next morning would find him on the golf links at Walton Heath freshand full of vim and energy. At fifty-three he is at the very zenith ofhis strength. 

Why has he succeeded? Simply because he was born to leadership. Withoutbeing profound he is profoundly moving: without studying life he is anunerring judge of men and moods. Volatile, masterful and above all humanhe is at once the most consistent and inconsistent of men. 

But it is a new Lloyd George who stepped from unofficial to officialstewardship of England: a Lloyd George with the firebrand out of hisbeing, purged of bitter revolt, chastened and mellowed by the years ofwar ordeal. Out of contact with mighty sacrifice has come a kinship withthe spirit. He is to-day like a man transformed. "England hath need ofhim. "

There are those who see in the new Lloyd George a Conservative inevolution. But whatever the political product of this change may be, itrepresents the equipment necessary to meet the shock of peace. For peacewill demand a leadership no less vigorous than war. 

The lowly lad who dreamed of power amid the Welsh Hills is to-day theHope of Empire. 

VIII--_From Pedlar to Premier_

The great General who once said that war is the graveyard of reputationsmight have added that in its fiery furnace great careers are welded. Outof the Franco-Prussian conflict emerged the Master Figure of Bismarck:the Soudan brought forth Kitchener and South Africa Lord Roberts. TheGreat Struggle now rending Europe has given Joffre to French history andup to the time of this writing it has presented to the British Empire nomore striking nor unexpected character than William Morris Hughes, thebattling Prime Minister of Australia--the Unknown who waked up England. 

Even to America where the dramatisation of the Self-made Idea has becomea commonplace thing the story of his rise from pedlar to premier has ameaning all its own. Elsewhere in this book you have seen how he stirredGreat Britain to the post-war commercial menace of the German. It ispeculiarly fitting therefore that this narrative, dedicated as it is tothe War after the War, should close with some attempt at interpretationof the personality of the man who sounded its first trumpet call. 

Like Lloyd George, Hughes is a Welshman. These two remarkable men, whohave done so much to rouse their people, have more than racial kinshipin common. They are both undersized: both rose from the humble hearth:both made their way to eminence by way of the bar: both gripped popularimagination as real leaders of democracy. They are to-day the twoprincipal imperial human assets. 

Hughes will tell you that he was born frail and has remained so eversince. This son of a carpenter was a weak, thin, delicate boy, butalways a fighter. At school in London he was the only Nonconformistaround, and the biggest fellows invariably picked upon him. He couldstrike back with his fists and protect his narrow chest, but his legswere so thin that he had to stuff exercise books in his stockings tosafeguard his shins. 

Hughes was trained for teaching, and only the restlessness of the Celtsaved him from a life term in the schoolroom. At sixteen he had becomea pupil instructor. But the sea always stirred his imagination. He wouldwander down to the East India Docks and watch the ships load withcargoes for spicy climes. One day as he watched the great freighters aboy joined him. He looked very sad, and when Hughes asked him the reasonhe 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 producedthirty shillings, all the money he had in the world. He handed thishoard over to his new-found friend and promptly forgot all about it. Hekept on teaching. 

I cite this little episode because it was the turning point in a greatman'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 yourteaching and come out here. " Hughes went. 

Three months later--it was in 1884--and with half a crown in his pockethe walked ashore at Brisbane. He looked so frail that the husky docklabourers jeered at his physical weakness. Yet less than ten years fromthat date he was their militant leader marching on to the Rulership ofall Australia. 

In those days Australia was a rough land. Beef, bullying and brawn werethe 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 seriesof adventures that read like a romance and give a stirring background tothe man's extraordinary public achievements. 

Hughes found out at once that all hope of earning a livelihood byteaching in the bush was out of the question. His money was gone: he hadto exist, so he took the first job that came his way. A band oftimber-cutters about to go for a month's sojourn in the woods needed acook, so Hughes became their potslinger. Frail as he was, he seemed tothrive on hardship. In succession he became sheep shearer, railwaylabourer, 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 fromQueensland into New South Wales. For fifteen weeks he was on the tramp, sleeping at night under the stars, trudging the dusty roads all day. Atthe end of this trip occurred the incident that made him deaf. Overnight he passed from the sun-baked plains to a high mountain altitude. Wet with perspiration, he slept out with his flocks and caught cold. Theresult was an infirmity which is only one of many physical handicapsthat this amazing little man has had to overcome throughout histempestuous life. 

Yet he has fought them all down. As he once humorously said: "If I hadhad a constitution I should have been dead long ago. "

After all his strenuous bushwhacking the year 1890 found him running asmall shop in the suburbs of Sydney. By day he sold books andnewspapers: at night he repaired locks and clocks in order to get enoughmoney to buy law books. Into his shop drifted sailors from the wharveswith their grievances. Born with a passionate love of freedom, thesesounds of revolt were as music to his ears. Figuratively he sat at thefeet of Henry George, whose "Progress and Poverty" helped to shape thecourse of his thinking. Lincoln's letters and speeches were among hisfavourites, too. 

One night a big dock bruiser grabbed a package of tobacco off thecounter, but before he could move a step Hughes had caught him under thejaw with his fist. His burly associates cheered the game littleshopkeeper. They now came to him with their troubles and he was soontheir friend, philosopher and guide. 

For years the synonym for Australian Labour was strike. When the unionswere merged into a national body Hughes was the unanimous choice of thehusky stevedores for leader. He became the Great Restrainer. Never wasinfluence of lip and brain over muscle and temper better demonstrated. The wild men of the wharves--the roughest crowd in all labour--wereunder his spell. This nimble-footed shopkeeper flouted them with hiswit: ruled with his mind. 

On a certain occasion five hundred of them were crowded into a buildingat Sydney yelling bloody murder and clamouring for violence. Suddenlythe tiny figure of Hughes appeared on the platform before them. Atfirst they yelled him down, but he stood smiling, resolute, undaunted. He began to talk: the tumult subsided: he stepped forward, stamped hisfoot 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. Heorganised his industrial rough riders into a powerful and constructiveunion. With it he drove a wedge into the New South Wales Legislature andgave industry, for the first time, a seat in its Councils. He became itsParliamentary Voice. He was only thirty. 

Having got his foot in the doorway of public life, he now jammed theportal wide open. As trade union official he forged ahead. He became theFather Confessor of the Worker. His advice always was: "Avoid violence:put your faith in the ballot box. " With this creed he tamed the LabourJungle: through it he built up an industrial legislative group thatacknowledged him as chief. 

Though he was rising to fame the struggle for existence was hard. Nomatter how late he toiled in legislative hall or union assembly, heread law when he got home. He was admitted to the bar, and despite hisdeafness he became an able advocate. When he had to appear in court heused a special apparatus with wire attachments that ran to the witnessbox 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 remarkablestatements began to creep into his articles when published. When hecomplained to the editor he discovered that the linotype operator whoset up his almost indecipherable copy injected his own ideas when hecould not make out the stuff. 

The limitation of a State Legislature irked Hughes. He beheld the visionof an Australian Commonwealth that would federate all those OverseasStates. When the far-away dominions had been welded under his eloquentappeal into a close-knit Union, the fragile, deaf little man emerged asAttorney General. At last he had elbow room. 

It was due to his efforts that Australia got National Service, anOfficers' School, ammunition factories, military training forschoolboys. They were all part of the kindling campaign that he waged tothe stirring slogan of "Defence, not Defiance. "

Always the friend and champion of Labour, he was in the thick ofincessant controversy. His enemies feared him: his friends adored him. He got a variety of names that ranged all the way from "BushRobespierre" to the "Australian Abraham Lincoln. "

The Great War found Hughes the Strong Man of Australia, soon to be boundup in the larger Destiny of the Empire. 

Even before the Mother Country sent her call for help to the Childrenbeyond the seas, Hughes had offered the gallant contingent that madehistory at the Dardanelles. Thanks to him, they were prepared. It wasHughes who sped the Anzacs on to Gallipoli: it was Hughes who, on hisown responsibility, offered fifty thousand men more. These men were notin sight at the moment, but the intrepid statesman went forth that veryday and started the crusade that rallied them at once. 

Hughes was moving fast, but faster moved the relentless course of thewar. Gallipoli's splendid failure had been recorded, the Australiansstood shoulder to shoulder with their British brothers in the Frenchtrenches when the opportunity which was to make him a world citizenknocked at his door. 

In October, 1915, Andrew Fisher resigned the Premiership of Australia tobecome High Commissioner in London, and Hughes was named as hissuccessor. The puny lad who had landed at Brisbane thirty years beforewith half a crown in his pocket sat enthroned. The reins of power werehis and he lost no time in lashing them. 

How he divorced the German from Australian trade: how he broke theTeutonic monopoly of the Antipodean metal fields and established theAustralian Metal Exchange and made of it an Imperial institution forImperial revenue only: how he swept England with a torrent of fervidoratory rousing the whole nation to its post-war commercialresponsibilities, are all part of very recent history already woven intothe fabric of this little volume. 

"Reconstruct or decay" was his admonition. Reluctantly the great massof English people saw him leave their shores last summer. Already thedemand for his recall as unofficial Speeder-up of Patriotism issimmering. 

What of the man behind this drama of almost unparalleled performance?

To see Hughes in action is to get the impression of a human dynamosuddenly let loose. His face is keen and sharp: his mouth thin: hischeeks are shrunken: his arms and legs are long and he has a curious wayof stuffing his clenched fists into his trousers pockets. Some one hascalled him the Mirabeau of the Australian Proletariat. Certainly helooks it. He has a nervous energy almost beyond belief. By birth, temperament, experience and point of view he is a firebrand, but withthis difference: he is a Human Flame that reasons. 

Only Lloyd George surpasses him in force and fervour of eloquence. Hehas a marvellous trick of expression that never fails to make a winningappeal. His speeches are the Bible of the Australian worker, and theyare fast becoming part of the Gospel of the wide-awake and progressiveBritish wage-earner. 

Since he was the first Statesman of the Empire to appreciate the gravebusiness responsibilities that will come with peace, it is interestingto get his ideas on the relation between Trade and Government. In one ofhis impassioned speeches in England he declared:

"The relations between modern trade interests and national welfare areso intimate and complex that they cannot be treated as though they werenot parts of one organic whole. No sane person now suggests that theforeign policy of the country should be dealt with by the_laissez-faire_ policy. No one would dare openly to contend that thenational policy should be one of 'drift, ' although I admit that thereare many most excellent persons who by their attitude seem to resent anyattempt to steer the ship of State along a definite course as being animpious attempt to usurp the functions of Providence, whose specialbusiness they conceive this to be. 

"I want to make one thing quite clear, that what I am advocating is notmerely a change of fiscal policy, not merely or even necessarily whatis called Tariff Reform--although this may, probably will, incidentallyfollow--but a fundamental change in our ideas of government as appliedto economic and national matters. The fact is that the whole concept ofmodern statesmanship needs revision. But England has been, and is, thechief of sinners. Quite apart from the idea of a self-contained Empirethere is the idea of Britain as an organized nation. And the BritishEmpire as an organized Empire, organised for trade, for industry, foreconomic justice, for national defence, for the preservation of theworld's peace, for the protection of the weak against the strong. Thatis 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 theEmpire was paying, he said:

"Let us take this solemn lesson to heart. Let us, resolutely puttingaside all considerations of party, class, and doctrine, without delay, proceed to devise a policy for the British Empire, a policy which shallcover every phase of our national, economic, and social life; whichshall develop our tremendous resources, and yet be compatible with thoseideals 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 allwars, are fighting and dying in a fashion worthy of their breeding. 

"Let us set sail upon a definite course as becomes a mighty nation towhom has been entrusted the destiny of one-fourth of the whole humanrace. "

Hughes is the most accessible of men. The humblest wharf-rustler inAustralia hails him by his first name. A characteristic incident willshow the comradeship that exists between this leader and hisconstituency. 

On his last visit to England he crossed over to France to visit theAustralian troops at the front. He was walking through a trenchaccompanied by General Birdwood, who is Commander-in-Chief of theoverseas contingent, and stopped to chat with a group of soldiers whohad fought at Gallipoli. Suddenly a shell shrieked overhead. A Tommyfrom Sydney yelled to the Premier:

"Duck, Billy, duck!"

Here is practical democracy. Nowhere, in all the varied human side ofthe war, does it find more impressive embodiment than in the self-madelittle Australian whose life is a miracle of progress. 

Of such stuff as this are the Builders of the British To-morrow!

THE END