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at the time when it would have been Court of Justice shall be placed on its most needed. If the United States agenda at its second assembly, which is were ever great enough and wise enough taking place as I write; but I do not to accept the principle of compulsory know why this Court should be any betarbitration, I cannot name the state ter than, or even so good as, our Hague that would not follow her. Can any ar- Court of the first Peace Conference. bitral decision, even against the claims To take two years to begin to duplicate of any one of us, cause one millionth the machinery that we finished twenpart of the ruin and loss of life and ty-two years ago does not strike me as treasure of the late war? And, on the an achievement of great merit. The other hand, compulsory arbitration is a real practical international diplomacy sure means of sterilizing armaments, of the moment, in all but American since, once international arbitration affairs, is controlled by the Supreme becomes our settled rule in diplomacy, Council and by the Council of Ambassathe use of force must end; for no state dors in Paris, both of which are, in efwould be so foolish as to keep up ex- fect, instruments for registering the depensive forces for long when there was cisions of the Allied cabinets. The no use for them. On these lines, and I League is left to its pious aspirations, believe on these lines only, can the de- and the main stream of diplomacy sign that must stand behind the assem- passes it by. Even when it has taken up bly of the Washington Conference be a question like that of Armenia, with carried out to its logical completion. passionate earnestness, the only result

I suppose that we shall not hear very has been that its protégé has become much of the League of Nations at Wash- either Kemalist or Red; while in the ington. It was mainly American handi- matter of mandates, the United States work, but America's refusal to recog- has protested against decisions made nize her own child has relegated it to without its approval, and the whole the political workhouse. No world- question is consequently hung up. Well authority can exist when the United

may a French statesman have said to States, Germany, and Russia have no himself sarcastically every morning in share in it. There are League enthusi- the spring of 1919, as he rose from his asts here, as there doubtless are in bed: ‘Georges Clemenceau, you believe America, and we must admire the devo- in the League of Nations.' tion with which the League works and accumulates mountains of documents

The Sorrows of Europe and reports. But we must also admit that it makes little progress and has In what particular manner President scant authority. Some say that the Harding and Mr. Hughes will change Council of the League is a mere crea- the situation for the better, we shall all ture of the French and British Foreign learn presently; but that the old ContiOffices. Others declare Geneva to be a nent of Europe is beset with immense focus of international intrigue. In any difficulties, political, social, economic, case, it is common ground that the and commercial, is manifest to a travelLeague has no authority, and no force er in every country that he visits. I at its back except that of moral per- place the question of exchange first suasion; and that it can do nothing but among the anxieties of Europe; and it report, warn, or recommend. With dif- is needless to remark how gravely ficulty it has at last agreed that the British and American trade have been election of judges to an International affected by it. It is not only the depre

ciation that has hit the world so hard, undersell us owing to their depreciated but the constant fluctuations, which exchanges, that their governments prohave ruined confidence, caused every mote this depreciation. I have seen no trader to think many times before he evidence of it. The fall makes it enorcloses a deal, and involved, not only mously more difficult for countries to

a foreign merchants, but many British pay their foreign debts; and those and American ones as well, in very countries at all dependent on foreign severe losses. The foreigner, except in imports naturally have to pay through the case of a few neutrals, cannot afford the nose for them. The depreciation, to buy from us at the present rates, and or, at least, the fluctuations, may be in consequently purchases only what he part accounted for by speculation and cannot produce or buy elsewhere. In gambling, which proceed on a vast many cases, foreigners refuse to


for scale; but, taking the situation as a our goods on arrival, because the local whole, the fall seems generally justified exchange has fallen since the order was by foreign debts, by inflation, by intergiven. In some cases, notably in Ru- nal exhaustion, by reduced output per mania, the inefficiency and inadequacy man per day, by consequent failure of of the railway service preclude the for- productivity, and by the inability of warding of our goods from ports when many countries to complete the reconthey are landed; and there the goods struction of their state machinery, remain for months, on the quays, often without which their wealth cannot be perishing from exposure.

fully exploited. Is there no remedy against this dead- The countries doing best are those in ly injury of the depreciated European which Labor is most moderate in the exchanges? I know of none except standards of wages and living it accepts, work, thrift, retrenchment, and time. and in which governments provide But I think that we should explore the cheap coal and relatively cheap food. repudiation of old currencies, the re- This is Germany's strength. She is placement of old units by new, and cur- resolutely setting to work, and all rency reform based on the international classes are accepting a standard of livredistribution of gold. Sound currency ing and of wages far below ours and stands at the base of sound trade; but even farther below the American scale. as America holds most of the gold of Compare the seventeen shillings per the world, it is up to her to initiate ton for German coal at the Ruhr pitreform.

heads with the price we have to pay; People curse Versailles for not hav- and compare the fifty pounds a year of ing stabilized exchanges at the time of the German bank-clerk with the pay of the Peace Conference; but when one the English or American clerk! This looks into the procedure recommended, difference runs through all German it is usually evident that the remedy is social and industrial life, and there is, to declare that one crown, mark, franc, besides, a rigid elimination of waste,

, dinar, or lewa, is worth five, or possibly which is unknown with us. ten. Artificial stabilization is financial The combination of the benefit from quack medicine. International finance a depreciated exchange and that demay be very clever, but apparently it is rived from low wages and poor living is disarmed in presence of conditions with enough to account for our difficulty in which it had no previous acquaintance. competing with German trade. In

. Some people think, seeing how the many other countries the scale of rehard-working countries like Germany muneration of the highest dignitaries is preposterously small. In Austria the from the very great obstacles which are President of the Republic draws only at present accumulated in its path. I eighty pounds a year, and heads of de refer especially to passports, custompartments in the Foreign Office tell me houses, tariffs, permits, and all the vast that they cannot afford a new suit of machinery for selfish national isolation clothes. The High Court Judge in Bu- which seems especially devised, not to charest draws sixteen pounds a month, assist trade, but to hamper it. The and the lieutenant four pounds. How grand tour of Europe is no joke in these they manage to live at all, with prices days. One's passport becomes a formidat their present height in these coun- able document. One must get a vise in tries, is one of those mysteries which I advance for every country through have not been able to penetrate, though which one passes, even if one does not we must, of course, admit that the pur- propose to stop there. One must carry chasing power of the local currency in only a very limited amount of the local the country itself is much higher than money out of each country; and in the English or American equivalent of traveling across a number of states one it would be in London or New York. A

must carry the coinage, or rather the few countries have checked inflation horrible paper, of each. The trader is and are bravely facing their liabilities; greatly handicapped by a system of but in many — and Poland and Aus- permits, and export and import duties, tria are the worst cases

inflation goes

and the wonder is how any trader gets a on, and selfishness often prevents the ton of goods into, or out of, any counimposition of taxes needed for recon- try. This arises from state control of struction.

trade, and everything shows that, whatGenerally speaking, I regard this ever else the state may be, it is a failure question of the rates of exchange as as a merchant. much more vital to England and Amer- We see the system at work to kill ica than to Continental Europe, though trade in full perfection in the Succesin one way or another all suffer from sion States of Austria. The old Austrothe present situation. We are really in Hungarian Empire was favorably situpresence

of a state of chaos which in- ated economically, because different jures all the world, and only the union parts of it supplied things that other of the world for the purpose of mending parts lacked, and everything passed matters can improve conditions. In this freely from one province to another. matter, America might take the lead. There was internal free trade, and the and, by collecting the best practical ex- Empire was almost self-supporting. ports, endeavor to formulate a solution. Hungary sent her wheat and her timThe Brussels Economic Conference ber, Bohemia sent her coal and sugar, gave us the most excellent advice upon Styria and the other parts all their prothe questions of state finance and eco- ducts. It was less the Austrian marnomics; but something more is needed riages that made Austria happy than the before we can go ahead. Unless some very shrewd business sense which realfinancial genius can discover a remedy, ized that certain provinces were needed one must regard British and American to supply Austria's deficiencies. trade with Continental Europe as al- Now all this economically happy most dead for a long time to come. state of affairs has terminated. The

Second only to the exchanges, there Succession States have all closed their comes the urgent need of freeing inter- frontiers against Austria and against national trade by every possible means each other. Each has its own currency,



and has set to work to build up customs er to administer the state or to rebarriers on every side against the terri- ward political friends. Therefore the tories with which it once traded freelyrule is to tax everybody and everyThis has injured the present Austria thing, but especially the foreigner. The most, and has indeed reduced her state export duty on Rumanian oil is a typifinance almost to extremities by com- cal case; for, if it hits directly the forpelling her to pay vast sums for wheat eign capital invested in this industry, and coal. But before long the selfish it also injures a source of local wealth, Succession States found that, in in- and gives a subsidy to other states juring Austria, they were losing their which supply oil. The idea of a fixed customers and injuring themselves; so, export tax, laid on regardless of worldby the natural force of circumstances, prices and falling-values, is one which we shall in due course see a change of must have originated in a lunatic asypolicy for which Austria, Hungary, and lum. In other places we discover a coneven Czechoslovakia are almost ripe. sortium, or government trading-ma

But the big idea of Dr. Benes, the chine, which supplies posts for political Foreign Minister of Czechoslovakia, to adherents, usually ignorant of trade create the United States of Central Eu- needs and practices; and it need scarcerope by a series of tariff agreements be- ly be said that it trades badly, and im

a tween half a dozen states in this part of poses on the produce of the country the world, may take long to be carried quite needless losses, often failing to out; for in some quarters the tendency find markets at all. In short, there is is still to pile on duties, chiefly in order every grade of incompetence to be to collect money, but also to protect found as we pursue our inquiry; while, home industries.

of course, the immense loss and damage The broad fact remains that interna- of the war has thrown numerous states tional trade is grievously hampered, into a disorganized condition and comand that it should be our object to free munications have particularly suffered. it from its fetters, both for our own Another change, which we in Engsakes and for the sake of these small land, at all events, watch with some countries which are busy strangling anxiety, is the agrarian policy, which each other to no possible benefit for has taken the form, in several states, of themselves. I believe that the quickest distributing the land among the peas

I and most drastic cure for the evils of Eu- ants. It may have been, and it was in rope, and failing currency and exchange some cases, a political necessity, and reform, would be a year of completely may have prevented an agrarian revofree trade, with no tariffs at all, inward lution; but the effect which it will have or outward; but one must confess that upon the export of cereals is of considthe nations concerned, not to speak of erable interest to the world. The great others, have not yet reached such a state estates are being broken up and reof grace as to accept a remedy of so placed by small holdings, which usually novel and so violent a kind. The ten- run from some three acres in Alpine dencies, on the whole, are the other regions up to twenty acres in average way. Even on the international rivers, arable land, rising again to six hundred the smaller riverain states are most ten- acres at most for the old proprietors. acious of what they call their rights, and There is no universal scale, nor even the claim powers which the régime of inter- same scale in all the provinces of each national law does not allow them. separate country; but the general effect

All governments want money, wheth- is to replace large landed properties by

small ones, with various scales of com- denounced to the workers of Europe by pensation - all very low — to the for many missions to Russia composed of mer landlords. Most of these laws

were men of extreme views. With few exceppassed in the first Aush of revolutionary tions these men have confessed thementhusiasm after the war.

In some

selves horror-stricken by the conditions cases they have been widely applied, in they have found; and though Commusome partially, and in others scarcely nism is not everywhere dead in Europe, at all. But all the laws stand, and it is there has been a powerful reaction the general belief that the exportable against the disruptive theories of a few surplus of cereals, and especially of years ago. The affair really came to a wheat, will diminish with a generalized head in the Bolshevist invasion of Popeasant-proprietorship. The tendency land; and if the failure of that attack of the small holder is to grow patchy did not convince Lenin and his dupes crops, primarily for his own food and of the futility of their theories, it conthat of his family; and there will not be veyed to them, at all events, a sense of the capital necessary for rich manuring their weakness against even partially for providing modern agricultural ma- trained troops; and since then Bolshechinery, or for purchasing high-class vism has been steadily losing ground in stock. On the other hand, a plurality of countries other than Russia. There are landowners means more stable political some communistic centres in Europe conditions, and may lead, some hope, where outbreaks of this disease may to increased production, owing to the recur, but I do not know the country in personal interest of each small farmer Europe which has any serious fear now in his land.

that its people can be stampeded by the Some attempts have been made by fanatics of Moscow. The experiences of the proletariat, notably in North Italy, Berlin and Munich, Vienna and Budato seize factories and to exploit them pest, have sufficed. The country has for the exclusive benefit of the workers. one hold over the towns: it can always These attempts have failed, because starve them. the new men in possession found them- The disruption of four great historic selves quite incapable of managing the empires, and the substitution for them administrative part of the work, the of various forms of democratic rule, contracts, and the sales. They, there have naturally caused immense disturbfore, in many cases, invited the old pro- ance in the political atmosphere, and prietors and managers to return, while the political weather is most uncertain. the bourgeois parties created the fas- Bulgaria keeps her dynasty, and Auscisti in Italy, and took other measures tria thinks more of joining Germany to defend themselves.

than of recalling the Hapsburgs; but In general, the tyranny, the excesses, Hungary is monarchical, and would and the fearful results of the Russian have a king to-morrow if she dared; Revolution, have sunk deeply into the while a large and influential part of the minds of the workers in Europe. If Bol- German population remains in princishevism had been specially designed to ple monarchical, and desires to revert expose the futility and uneconomic ab- to that form of government. The Gersurdity of the theories of Karl Marx, it man Empire acquired its former great could not have more appropriately car position under a kaiser, and every Ger

. ried out its mission than it has done man is regretful of the past. during the last four years. The error, The present government of Dr. Wirth and the tragedy of the error, have been and the personality of this honest

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