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control the whole industrial life of Germany, and are the real rulers of the State. Their method is what is described as the creation of 'vertical' trusts. That is to say, by a combination and pooling of many companies in possession of raw material and industrial plant, they build up an immense production of manufactured articles which have that raw material as their basis.

Thus the great munition works of Krupp, entirely engaged in the production of guns and armaments during the war, on a colossal scale, read the lesson of defeat, and within a few months after the Armistice, adapted their plant and their organizing genius in a marvelous way to the requirements of peace. They are now making engines and machinery of all kinds, agricultural implements, cash registers, safety-razors, and any kind of article in iron and steel for which there is a world market. The General Electricity Company is also developing its energy with gigantic strides, reaching out to 'neutral' countries, and absorbing many industrial concerns of which the basis of activity is coal and iron and electrical power, in Austria, Hungary, and other countries.

These great trusts are already capturing the world's markets, and have already succeeded in recovering some of the pre-war prosperity of German trade

which is almost a miracle, considering the ruin of the German economic system by the exhaustion of a bloody and unsuccessful war, the loss of colonies, shipping, and foreign property, the loss of man-power, and the deterioration of machinery, railways, and rolling stock.

Amazing as all this is, however, one must not exaggerate the actual results. Germany is not rolling in wealth, as some observers have reported. Apart altogether from her international debts,

leaving on one side altogether the gigantic payments of the indemnities

which she has undertaken, her industry and commerce are about two thirds normal compared with the prewar standard. Her imports of cotton amount to nearly half of those in 1913. Her coal output during the first four months of this year was 44,500,000 tons compared with 57,000,000 tons in the same period of 1913.

Half the amount of pre-war tonnage (largely under foreign flags) is now coming into the port of Hamburg.

Steadily German trade is increasing in nearly all countries. In South America her volume of trade increased by 20 per cent in February of this year compared with the same month last year, whereas South American trade with all other countries decreased that month by 50 per cent. In 1919 Germany sent to the United States $10,000,000 worth of goods, in 1920 she sent $88,000,000 worth, and this year the increase is immensely more. In the automobile industry she has knocked Great Britain out of the market in European countries, and her exports to Switzerland alone in motor-cars, cycles, and accessories are sixty times more than ours.

All this is a sign of industrial and commercial recovery, astounding as a proof of energy, industry, and organized efficiency after the shock of national defeat. But those German people who have put up such a tremendous fight for their old place in the world are now confronted with the necessity of paying indemnities to the victor nations, which will test their power of recovery to the uttermost and demand new and unprecedented efforts. It is not going to be easy for them to pay. If they succeed, it will be the greatest industrial adventure ever undertaken by any people in the world. To succeed, they must increase their volume of exports at least four times, which would be an achievement unrivaled in the industrial history of the world.

Can they do that, and if they do, what will be the effect upon other nations?

The answer to the first part of that question was given to me by Scheidemann among others, as it has been given to the world by Walther Rathenau, the German Minister of Reconstruction, who said boldly, 'We can pay!' and by the Communist deputies in the Reichstag, who, addressing the Right, cried out, 'You have gambled, you have lost, you must pay!' That the German leaders and people are determined to pay their war-burdens if humanly possible is certain; and from what they told me I think they believe with confidence that they can do so, on certain conditions. Scheidemann, whom I saw in the presence of Dr. Helphand, a millionaire Socialist who acts as his secretary and interpreter, outlined those conditions. This leader of the Majority Socialists is still a great power in German political life. A tall handsome man, with silver hair and a little white 'imperial,' like a French painter, as he seemed to me in his linen suit when I met him in Dr. Helphand's country house, outside Berlin. He represents the conservative spirit of German labor, which voted the war-credits, fulfilled all sacrifices, and was utterly loyal in its allegiance to the imperial dictates of its war lords until defeat was acknowledged. Then Scheidemann helped to found the Republic upon conservative traditions which were in direct opposition to the spirit of revolution.

His view of Germany's future was optimistic, on the condition that his country should be given peace and fair play by France and England. On that understanding, he has not much doubt that Germany would fulfill the terms of payment. By the demobilization of the army they were saving 1,800,000,000 of gold marks annually, which would go some way to pay off the yearly tribute. They could save other sums by

restricting imports of luxuries and by more efficient organization. With intensive production and rapid tradedevelopment of countries like Russia, they could pay their bill of costs in full, provided they were helped and not hindered. If Upper Silesia, or the Ruhr, were taken, Germany would be crippled and put out of business. But if the Allies, and above all the United States, were prepared to give Germany a free and full chance, she would wipe out all debts. They must have credit and capital to renew the wear and tear of machinery and rolling stock, enormously depreciated during the war, and to develop their industrial possibilities. Russia was waiting for them. As soon as she returned to ordinary methods of business, Germany would be ready also to supply her with machinery, engines, agricultural implements, and every necessity of civilized life, so repairing her ruined state. By geographical position, said Scheidemann, that task of Russian reconstruction would inevitably come to the German people; but they would only be able to do it in full measure, to the benefit of the whole world, if they were supported by the credit of America, Great Britain, and other countries. German labor and organization would repay such credit by good interest, the payment of all war-debts, and the revival of world. trade. That is Scheidemann's hope for Germany, and he believes that it is also the chance for Europe, whose common interests would be served.

Stresemann, the leader of the German People's Party, and the political representative of Hugo Stinnes, the Trust King, is less confident than Scheidemann of Germany's economic future. After a long conversation on the political aspect of Europe, in which he protested against the French habit of poking up the furnace fires of hate by 'incessant insults' against the German

people, he went at length into the question of reparations. He held the view that, after a few years, during which Germany will desperately endeavor to fulfill her pledges, the European peoples will realize the folly of maintaining such abnormal conditions in world-trade, and will call another Conference to revise the whole Treaty of Peace. They will develop a scheme of international economic union, by which the interests of all nations will be secured by some better arrangement than destructive competition and monstrous abnormalities. Stresemann's own opinion is that the war-debt of the world could be wiped out in a few years by a small tax on raw material, like coal or cotton, paid by all purchasers and put into a common international pool for that purpose.

From what I have written, condensing very briefly the results of my visit to Berlin, it will be seen that in my opinion Germany will make a serious endeavor to fulfill her pledges, and is in a fair way,

if she retains the resources of her raw material in Upper Silesia and elsewhere, to capture the industrial supremacy of Europe. Her people are working harder than any others, at lower wages, and with more efficient organization. They have, as I said, been braced by defeat, whereas the victor nations, and above all Great Britain, have been slackened by victory.

But one other question remains. It has already been asked by Mr. Reginald McKenna. What will happen to British trade if Germany pays her indemnities in the only way possible by an immense increase of exports? The very fulfillment of her pledges will ruin the countries receiving payment by the destruction of their own export trade. So we reach the monstrous paradox that in shouting, 'Make Germany pay!' we were insisting upon our own ruin. The only cure for the present sickness of world-trade is to return to normal conditions of imports balancing exports, and of a free and natural flow of trade.

BEFORE THE LIFE-MASK OF KEATS

BY ALFRED NOYES

[To-Day]

THEY stood like pilgrims in some holy place,
Father and daughter - she with a wistful smile;
He with a grave compassion in his face,

Gazing at that young life-mask for a while.

She looked as Flora might, at seventeen years,
Her warm breast pulsing with the heart of spring;
While, in her father's gaze, the brooding tears
Remembered, with the dead, how youth takes wing.

I wished that Keats could see her; but his eyes
Were closed to all the yearning in her own,
Closed to the young moon stooping from her skies.
He slept, more deeply than Endymion;
Slept, with those painted shadows of the great,
Loved by the world, a hundred years too late.

[This is a verbatim report of Mr. Balfour's important speech on the aims and work of the League of Nations, delivered before the representatives of the United Kingdom, the Dominions, and India, at the time of the Imperial Conference in London.]

From The London Telegraph, July 13
(CONSERVATIVe Daily)

I HAVE always been a League-of-Nations man, long before the League of Nations came into existence, and an experience now extending over one or two years has not only strengthened my conviction that the League of Nations is necessary, but also, I am sorry to say, my fears that it is an institution in many respects difficult to work. Perhaps I might begin by explaining where I think the special difficulties lie, before I go on to show how much the League has already done, and how hard it would be to create any other authority to take its place. It is true that some of our difficulties are only temporary. The statesmen who at Paris framed the Covenant of the League undoubtedly assumed that the Treaty of Versailles would rapidly and effectually settle the new frontiers, and redistribute territories in accordance with the wishes of the populations concerned, leaving to the League of Nations the relatively simple duty of maintaining rights clearly established, and preventing national differences from developing into national wars.

Everybody knows that these hopes have not as yet been completely fulfilled. The Treaty of Sèvres is still in dispute, and even the Treaty of Versailles has not been fully carried out. One of the most important objects, for example, of the latter was the determination of the boundaries of Poland. But the boundaries of Poland remain still unsettled. Another problem was the

status of Galicia. But the status of Galicia is still unsettled. Now everything that leaves Middle Europe in a perturbed condition really requires the League of Nations to deal with a situation never contemplated by those who framed the Covenant under which the League has to do its work.

Another thing that was perhaps not fully considered by the framers of the Covenant was the difficulty of dealing with semi-civilized populations in territories not under mandate. For instance, at the last assembly one of the problems that excited most interest was the problem of Armenia. The assembly was deeply moved, but quite helpless. Nothing effectual was done, nothing effectual could be done. The League could only make appeals in favor of a population which it was quite powerless to protect.

Perhaps, however, the most serious difference between the League as it was planned and the League as it exists arises out of the absence from its ranks of three of the greatest nations of the world, two of which are not, so far as we can see at the moment, very likely to join it in the near future I mean America and Russia. I hope that Germany will at no very distant date become a member. But Russia will come in only when she has ceased to be what for the moment she is. And whether the Soviet Government endures or perishes, she is likely for some time to come to be a disturbing influence in the East of

Europe, which it will be difficult for the League of Nations to guide and control. These embarrassments are in their nature temporary; but there are others due to the constitution of the League itself. There is the difficulty, for example, of manning the Council and the Assembly. This is partly the effect of the immense distances which separate many members of the League from our meeting-place in Geneva; but partly also, it is due to the fact that the statesmen best qualified by their position to deal with League problems, namely, the Prime Ministers and the Foreign Secretaries of the various nations, cannot possibly make a regular practice of attending its meetings.

Another difficulty which presents it self in our attempts to use the full machinery of the League is due to money. We made an attempt in 1920 to obtain funds by voluntary subscription from members of the League, in order to deal with typhus in Poland and the East of Europe. Typhus was at that time, and I fear still is, not merely a great misfortune to the countries bordering upon Russia, the great centre of the infection, but a menace also to nations lying farther to the west. Poland was, according to our information, making every effort to deal with this danger; the Council came to the conclusion that she should be supported, and we therefore issued an appeal for funds to the members of the League. The appeal was on the whole a failure, a failure partly due no doubt to the financial difficulties which beset the whole world, partly to the fact that most members of the League were remote from the peril with which we were endeavoring to deal. In some cases very liberal subscriptions were offered, but on the whole it was clear that, at least in existing circumstances, such appeals were not likely to succeed.

It is indeed evident that, under the

Parliamentary system, the expenditure of the League will always present an easy object of attack. The gain to the world of international coöperation is immense, but it cannot be allocated with any definiteness between the coöperating nations. It is always, therefore, easy for a Parliamentary critic to ask what advantage his particular nation derives from the expenditure which it is called upon to make, and in these days of universal poverty such questions fall upon sympathetic ears. If this very natural frame of mind is permitted to dominate policy, manifestly the League will perish. Some common sacrifice, however slight, is required if any common effort is to be successful. I believe this danger is not negligible, though I am sanguine enough to think that it will be successfully surmounted.

So far I have dwelt upon the obstacles which thwart and may even imperil the success of this great experiment. Let me now say a few words upon some of the reasons which require all men of good-will to do their best to make it a success; and here I can appeal not merely to speculative theory, but to actual experience. The League has been in existence since January 10, 1920, say, about a year and a half. In that time it has had to create its machinery, to organize its methods, and to devise means for pursuing what is without doubt a new adventure in the history of mankind. One would have thought that these facts alone would mollify the sternest critic, and that no one would be so unreasonable as to expect, in the first eighteen months during which this infant institution has been in existence, the full authority and efficiency which only time can bring. But even these eighteen months are sufficient, in my opinion, to show to any impartial observer how valuable the League of Nations can be, and how im

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