Part 23

Go up and down the battle line in France and you get startling evidence of the French devotion to savings. More than one English officer has told me of tearful requests from French peasants for permission to go back to their steel-swept and war-torn little farms to dig up the few hundreds of francs buried in some corner of field or garden. Equally impressive is the sight of farmers--usually old men and women--working in the fields while shells shriek overhead and the artillery rumbles along dusty highways.

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

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

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

Light flashed in his eyes as he replied:

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

Although the invader has crossed her threshold, France continues to save. Every wife in the Republic who is earning her livelihood while her husband is at the front (and nearly every man who can carry a gun is fighting or in training), is putting something by. It means the building up of a future financial reserve against which the nation can draw for war or peace.

One rock of French economic solidity lies in her immense gold supply. The per capita amount of gold is $30.02 and is larger than any other country in the world. The United States is next with $19.39, after which come the United Kingdom with $18.28, and Germany $14.08. Let me add, in this connection, that a good deal of the French gold is still in stocking and cupboard.

By the end of 1916 the war had cost France $11,000,000,000, which means an annual fixed charge of $600,000,000, to which must be added $200,000,000 for pensions, making the total fixed burden of $800,000,000.

All this cannot be paid out of savings, although in normal times France saves exactly $1,000,000,000 a year. But the Government has one big trump card up its sleeve. It is the large fortunes of her citizens. They have been untouched by the war because practically no income tax has been levied.

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

Financially, Russia ambles along like the Big Bear she typifies. In one respect her method of financing the war cost differs distinctly from her Allies in the fact that she has received heavy advances from England and France. From England alone she borrowed $1,250,000,000 which was expended for arms and ammunition and field equipment. The Czar's Empire has put out five internal loans while the rest of the money needed has been raised out of the sale of short term Treasury Bills, paper money issues and tax levies.

Except for the few millions of dollars obtained in the United States, Germany's financing--like her whole conduct of the war--is self-contained. Through five Imperial 5 per cent loans ranging from one to three billion dollars each, she has established a war credit of $12,500,000,000. This money--to a smaller degree than in France--has come from the great mass of the German people.

Other sources of revenue that are enabling the Kaiser to pay for the war are Treasury Bills sold at home and a taxation that is moderate compared with the colossal pre-war taxation which spelled Germany's Preparedness. At the time I write this chapter her war expenditure had passed the $14,000,000,000 mark. Tack on to this Germany's peace debt of $5,000,000,000 more and you begin to see--with all the uncertainty of the war's duration--the immense burden that the Fatherland will have to carry. The war's drain on the German future is perhaps greater than that of any other country because all her war loans are long term. She has also loaned nearly $1,000,000,000 to Austria, Turkey and Bulgaria.

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

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

On one hand you have the assets of the warring countries as represented by their national wealth. For the Allies, including Roumania, they show a total of $273,000,000,000: for the Central Powers they register $134,000,000,000. If wealth is the winning factor then the Allies have the advantage in weight of buying metal.

Take the other side of the ledger and you see that up to November 1, 1916, the four principal allied countries, England, France, Russia and Italy, had spent on direct war cost approximately $34,000,000,000, while the total Teutonic war expenditures have been $21,000,000,000. To this actual war cost must be added the peace debts of the belligerent nations which would supplement the allied expense account by $17,465,000,000 and that of the enemy nations by $9,808,000,000.

Striking a grand total of liabilities, you find that if the war mercifully ends by August 1, 1917 (as Kitchener predicted it might), the fighting peoples would face a debt burden of all kinds that had reached $105,773,000,000.

After this colossal scale of expenditures you may well ask: Will it ever be possible for European finance to see straight or count normally again?

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

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

Meanwhile our Financial Stake in the Great Struggle is secure. How much more we will have to put into Europe's Red Pay Envelope remains to be seen. In any event, we have learned how to do it.

VII--The Man Lloyd George

The door opened and almost before I had crossed the threshold the little grey-haired man down at the end of the long stately room began to speak. Lloyd George was in action.

I had last seen him a year ago in the murk of a London railway station when I bade him farewell after a memorable day. With him I had gone to Bristol where he had made an impassioned plea for harmony to the Trade Union Congress. Then he was Minister of Munitions, Shell-Master of the Nation in its critical hour of Ammunition Need.

Now he had succeeded the lamented Kitchener as Minister of War; sat in the Seat of Strategy, head of the far-flung khakied hosts that even at this moment were breasting death on half a dozen fronts. Just as twelve months before he had unflinchingly met the Great Emergency that threatened his country's existence, so did he again fill the National Breach.

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