CHAPTER IV

Candide etait etendu dans la rue et couvert de debris. Il disait a Pangloss: Helas! procure-moi un pen de vin et d'huile; je me meurs. Ce tremblement de terre n'est pas une chose nouvelle, repondit Pangloss; la ville de Lima eprouva les memes secousses en Amerique l'annee passee; memes causes, memes effets: il y a certainement une trainee de souphre sous terre depuis Lima jusqu'a Lisbonne. Rien n'est plus probable, dit Candide; mais, pour Dieu, un peu d'huile et de vin. Comment, probable? repliqua le philosophe; je soutiens que la chose est demontree.

Candide perdit connaissance, ... et Pangloss lui apporta un peu d'eau d'une fontaine voisine.

VOLTAIRE, Candide.

Sec. 1

Dialectics round the Death-bed

Philosophical aloofness is all very well in its way, but while we argue about economic causes and attempt to induce a philosophy of earthquakes, our bright young democracy lies bleeding under the ruins. The urgent necessity is a little first aid, a little cessation of the killing. I don't know how many young men in different parts of the world have been deliberately and scientifically murdered during the writing of this protest. England alone, who has been criticised for her delay in exposing her youth to the slaughter, is having about half a million of her best citizens stabbed or pierced or crushed or mutilated or poisoned or torn to pieces in one year of modern warfare. And life is not the only instrument of vital progress that is being thrown away. Britannia has beaten her trident into a shovel, and with it is shovelling gold; and not only gold, but youth and love and happiness into the deep sea. The belligerent nations are frantically engaged in destroying two thousand years of education and all the accumulated capital of humanity. Only the enemies of civilisation, the sellers of arms and the sowers of hatred, are growing rich on its ruins. It is impossible to deny that the longer the war continues the greater will be the subsequent sufferings, spiritual and material, of every nation engaged. It is impossible to maintain that any nation or class or individual will be any better in any respect for the Great War, with the single exception of that parasitic class who, as a class, and therefore perhaps not consciously, are chiefly responsible for its inception. We must have Peace first and congresses afterwards. The survivors of civilisation cannot discuss a lasting settlement while they are still under fire.

FOOTNOTES:

Sec. 2

German Responsibility for the War

Nor is it necessary to continue the slaughter while we argue about which belligerent must bear the chief responsibility for the outbreak. The dialectical exercises of the German Chancellor and Mr. Asquith are so futile that they remind us only of two naughty children who drag out their squabble with stubborn outcries of "He began it." The first consideration is to stop fighting. Such academic discussions are necessarily endless, for the simple reason that every nation has its faults, to which criminal motives can always be attached: every nation has its fools, whom its enemies can describe as typical representatives. The question of responsibility for the Great War must be left to the historians of the future. I am quite confident (though even Viscount Grey or Professor Gilbert Murray cannot prove) that they will hold Germany responsible: but I am equally confident that the blame they throw on the nation responsible for the war will be less pronounced than the praise they will reserve for the nation which first has the courage to speak of peace. My belief in Germany's responsibility is based largely on German apologetics and strengthened by the evidence of commercial conditions in Germany before the outbreak. Professor Millioud, for instance, has shown that "German industry was built up on a top-heavy system of credit, unable to keep solvent without expansion, and unable to expand sufficiently without war." Or if a good working test of German responsibility were needed it would be sufficient to point out that no nation innocent of aggressive intentions would have drafted such an ultimatum as that which Austria, with German connivance, sent to Serbia; and that no nation anxious for war would have drafted such a conciliatory reply as that which Serbia returned to Austria by Russia's instructions. It is in fact clear that as long ago as 1913 Austria had determined to crush Serbia, and that in 1913 that determination was only postponed; and postponed not, as we thought at the time, by the tact of Lord Grey at the Conference of London, but only by Italy's refusal to join in the adventure, as we now know from the revelations of San Giuliano and Salandra. Similarly, knowing as we do that England is no exception to the rule that no imperial nation can be wholly compact of righteousness, we might hesitate to accept The Times' version of British innocence, and we might hesitate to accept Lord Bryce's report on the German atrocities in Belgium, knowing as we do that it is based almost entirely on the hearsay evidence of refugees who would be anxious to distinguish themselves as witnesses from the general ruck of destitution; but it happens that the general charges of German aggressiveness and German brutality are fully corroborated by German literature. Unfortunately these distinctions between brutal and chevaleresque methods of warfare remain only questions of method; they concern manners rather than morals, and are as irrelevant to our hopes for the abolition of war as the questions of diplomatic method already mentioned. Equally irrelevant, in any discussion of the possibility of substituting "compulsory arbitration" for war, is the attempt to distinguish between aggressive and defensive war, or to throw all the blame of aggression on either of the two belligerents; for the simple reason that each belligerent will perhaps never believe and will quite certainly never admit that his own intentions were anything but defensive or altruistic. The locus classicus for such protestations of innocence occurs in the Italian Green Book, where Austrian diplomats may be found declaring, with every appearance of sincerity, that the invasion of Serbia was a purely defensive measure. And in a sense, in such a well-armed continent, every aggression is indeed a fore-arming against the future. It might also be suggested that the crime of aggression is an offence not against an individual but against the peace of the community: and until the European community is constituted the guilt of such a crime cannot be brought home to either of the belligerents.

FOOTNOTES:

"The principle according to which the whole community must be punished for the fault of a single individual is justified by the theory of terrorisation. The innocent must suffer with the guilty; if the latter are unknown the innocent must even be punished in their place, and note that the punishment is applied not because a misdeed has been committed, but in order that no more shall be committed. To burn a neighbourhood, shoot hostages, decimate a population which has taken up arms against the army--all this is far less a reprisal than the sounding of a note of warning for the territory not yet occupied. Do not doubt it; it was as a note of warning that Baltin, Herve, Louvain, and Dinant were burned. The burnings and bloodshed at the opening of the war showed the great cities of Belgium how perilous it was for them ..." etc.]

Sec. 3

The Value of German Culture

The question whether Germany is actually attempting or would be justified in attempting to impose her culture on the rest of Europe; or whether England has good reasons for the limitation or suppression of German culture, is another side-issue. German culture (in Matthew Arnold's correct use of the word, meaning, that is, the average of intellectual and social civilisation), has not on a general inspection much to be proud of. The modern literature of Germany is largely a transcription of Russian, French and English authors, and it is significant that among foreign authors the widest success is reserved for purveyors of le faux bon, writers whose work is distinguished by its spirited failure quite to attain the first-class. The most promising of modern authors writing in the German language, Schnitzler, is an Austrian Jew. Hauptmann, the most distinguished and original of German dramatists, has for thirty years been writing plays which would pass for imitations of Mr. John Galsworthy's failures. Sudermann's style reminds one of a snail crawling over the Indian lilies which he describes.... Germany, it is true, has reason to be proud of her theatres, but that is a matter of State enterprise, rather than an indication of national culture. The German State has been efficient enough to perceive that good theatres are a fundamental necessity of national education, and that good theatres, owing to the excessive rents they have to pay, can never be kept going without a State subsidy. But these admirable theatres can hardly be called the vehicles of a high native culture. Their famous Reinhardts are more efficient only because more acquisitive than our own Jewish impresarios. The ideas they have acquired are chiefly Russian or English: and they have profited by the ideas of Granville Barker and Gordon Craig in order to produce the plays of Shakespeare and Shaw--(just as industrial Germany profited by the ideas of Bessemer and Perkins). Germany's claim to artistic vitality, to genuinely original culture, can be supported only by a certain distinct excellence in sculpture and caricature, two arts which often seem to go hand in hand, perhaps because both are based on a precise simplification of form. But for the activity of a small band of sculptors and caricaturists centred for the most part in Munich, we might be content to regard Germany not as a fount of culture but rather as one of the world's workshops, a well-organised ergastulum for dealing with the drudgery of modern civilisation, for manipulating secondary products and extracting derivatives, a large factory for the production of dictionaries, drugs and electrical machinery.

The extraordinary efficiency of Germany, as a workshop, is not due to any intellectual pre-eminence of the nation as a whole. It is most clearly and emphatically due to the fact that the German autocracy, whatever its political iniquity, has had the intelligence and the national solidarity to choose its business men from among the brains of the community. In Germany any man of conspicuous intellectual capacity may be picked out, roughly speaking, and assigned to the direction of a particular industry. In England we achieve inefficiency by the contrary process, and are only willing to regard a man as capable and revere him as an "expert" if he happens to have been occupied exclusively for a certain number of years in the narrow routine of a particular subject. This pernicious fallacy of the "Expert" is actually preached in England as a means to the very Efficiency which in fact it almost invariably excludes. It is commonly assumed that no man can write a good play unless he has been a bad actor, or that a retired admiral, quite incapable of grasping any general idea that was not popular in the Navy twenty years ago or in the smoking-room of his club, would be better able to direct the affairs of the Navy than Mr. Winston Churchill or Mr. Balfour. There is a similar outcry for a government of "Business Men," although anyone who happens to have heard a couple of average business men discuss a problem of their own business in one of their own offices will hardly be able to deny that a capable poet and a capable painter would have settled the question in a quarter of the time. Instead of superstitiously believing that only "Business Men" can be efficient, Germany picks out her business men (and her bureaucrats) for their general efficiency. She has attained efficiency by abandoning the fallacy of the Expert in favour of the maxim of Confucius--"the Higher type of man is not like a vessel which is designed for some special use."

But from the fact that German industry and German theatres are better managed than our own it does not follow that there is any natural or national antagonism between England and Germany. The real hatred of Germany if it exists in England at all should be found among what it is becoming the fashion to call "the intelligentsia." Such a purely intellectual hatred of the sentimental melodrama of Faust and of the semitic luxuriance of Wagner and Reinhardt is not likely to become a democratic motive in England. Here brains are always unpopular, and Park Lane will never be stormed by the mob until it is inhabited by the Bernard Shaws, the Lowes Dickinsons and the Bertrand Russells, instead of by German financiers.

There is no national hatred between England and Germany. The two peoples are natural friends. Even the men in the trenches (or perhaps I should say particularly the men in the trenches), fraternise with their opponents whenever they get the chance. Even now a press campaign of a few months would suffice to make Germany popular in England; and if that were ever to happen, which is not improbable, only the "intellectuals," who are most strongly opposed to this war, would still find much to dislike, but not to fight about, in the national culture produced by the German character.

FOOTNOTES:

"In German schools not only are classics taught more systematically and more thoroughly than in all but a few of our own, but they are learned by a greater proportion of the population; and, moreover, the hours devoted to natural science in those schools in which it is taught are fewer than in our public schools.... Since 1903 the number of German boys receiving a classical education has steadily increased. In 1904 there were 196,175 pupils in schools (Gymnasien and Realgymnasien) where Latin is compulsory, of whom 153,680 belonged to the classical schools (Gymnasien), and therefore learned Greek as well (W. Lexis, Unterrichtswesen im Deutschen Reich, ii. 218); in 1911, as Mr. R. W. Livingstone has shown (The Times Educational Supplement, April 4, p. 49, col. 2), the corresponding figures were 240,000 and 170,000; and in 1908, 'out of a total of 31,622 students entering 18 out of 21 German universities (Munich, Erlangen, and Wurzburg not reporting), ... only 7-1/2 per cent entered without Latin or Greek' (Professor Francis W. Kelsey, Latin and Greek in American Education, 1911, p. 43). "Moege das Studium der griechischen und roemischen Literatur immerfort die Basis der hoeheren Bildung bleiben." So wrote the greatest of the Germans; and the countrymen of Goethe, whose genius was scientific as well as poetical, have not forgotten his words. On the other hand, in the modern schools (Realgymnasien and Oberrealschulen) only a small fraction of the time-table--from two hours a week (out of twenty-five) to six (out of thirty-one)--is devoted to natural science. To anyone who has read Matthew Arnold's Higher Schools and Universities in Germany, or Dr. M. E. Sadler's The Realschulen in Berlin, or who is acquainted with the opinions expressed by Helmholtz, A. W. Hofmann, Bauer, and other 'eminent scientific professors,' it will not appear paradoxical that the object of thus restricting the hours devoted to the teaching of natural science in schools is to promote the scientific efficiency of the German nation. It was with this object that by the regulations published in 1901 the time devoted to Latin in the Realgymnasien was increased. And those who do not learn natural science learn what for the nation is equally important--the value of scientific method."]

"A pathetic story is told in the Vorwaerts by Herr Adolf Koester (who acts as war correspondent for the German Socialist Press) in connection with the recent fighting at Hooge. A German soldier told him of a young Scotsman whom he had killed with a hand-grenade in whose pocket he had found a little pocket-book:--

"'We looked through the booklet. It contained postcards from the front, from home, from a sister and from a sweetheart--photographs from the battlefields of brave soldiers and from home. There was also a small amateur photograph, rather badly made, of a young girl sitting at a typewriter. She had blonde hair and on the back of the photo she had written: "Look at the waves of my hair and note also how very diligent I am" (English in the original). One of us asked the soldier to give him this photograph. But he replied: "You can take the whole book, photos, postcards, etc. But this picture I will keep in memory of my friend." By "his friend" he meant the Scotsman whom he had killed by his hand-grenade.'"]

Sec. 4

The Manufacture of Hatred

But if there is no natural hatred between the two belligerent protagonists, there is a feverish production of the artificial variety. Indeed this diligent manufacture of hatred is probably the most demoralising result of warfare, particularly disastrous in its ethical effect on the individual. It proceeds by the ordinary methods of deceit, suppression of the true and suggestion of the untrue, and by means of the newspapers this process of moral degeneration is sometimes actively directed, sometimes only permitted or encouraged by the Governments concerned. The London press is always ready to swallow the pathetic fabrications of unscrupulous refugees, and publishes with joy any Rotterdam rumour about German bestiality; but refuses to print any report however authentic which ventures to suggest that the Germans are as human as ourselves. There was, for instance, a Canadian woman, Dr. Scarlett-Synge, who under the aegis of her medical diploma, returned from Serbia through Germany, and discovered that some of the German internment camps are not as bad as they are commonly believed to be. Whatever her qualifications and opportunities for forming a correct opinion, and they happen to have been particularly good, there is no doubt that this woman's report was of the highest interest. Yet not a single daily paper in England would consider its publication, on the ground presumably that it might reduce the national inflammation and thereby "prejudice recruiting." As if true patriotism, sane and lovely, had anything to do with the pathological condition of hatred. "Recruiting be damned," says the patriotic philosopher, "odium nunquam potest esse bonum." The method of distortion is also abundantly used by journalists of both parties. German hatred of England has often been stoked up by isolated mistranslations of sentences from The Times, and English and French journalists have not been slow in following the German example. It is said that after the fall of Antwerp the Koelnische Zeitung announced that "as soon as the fall of Antwerp was known the church bells in Germany were rung," a harmless message which was successively distorted by the Matin, the Daily Mail, and the Corriere della Sera, until it finally reappeared in the Matin in the following form: "According to the information of the Corriere della Sera from London and Cologne it is confirmed that the barbaric conquerors of Antwerp punished the unfortunate Belgian priests for their heroic refusal to ring the church bells by hanging them as living clappers to the bells with their heads downwards."

The Manufacture of Hatred is unfortunately become a part of the Nationalist Movement in nearly all modern European States. The spurious Nationalism which is the result not of race but of education, depends for its existence almost entirely on so-called ethnological propaganda and continues to thrive by the cultivation of two propositions, neither of which is true: that all the members of one national group are racially different from all the members of the neighbouring group; and that this racial difference naturally and necessarily and properly implies the mutual hatred of the two nations. They proclaim, in fact, that certain nations are the "natural enemies " of certain others, by hating which they are only fulfilling the national function of self-realisation. By such arguments, which have no genuine ethnological foundation, the false prophets of nationalism are filling Europe with the racial prejudice of artificial Kelts, artificial Poles, and artificial Teutons. Of course race hatred between Slav and Teuton is no more "natural" than family hatred between Jones and Robinson; and even if it were, even that is if the cultures of two neighbouring races were mutually exclusive, it could still be argued--as it must in any case be argued--that no nation is racially pure. The last "Pole" I met proudly professed that the hatred of Russia was in his blood. Yet he was born in Bessarabia, and it was therefore not surprising that his facial type was distinctly Roumanian; he came, that is, if race means anything at all, of a Graeco-Latin stock, and his hatred of Russia, which seemed to be the beginning and the end of his programme of "Polish nationalism," was the result of a few years of neglected education. Half the conflicting "Nationalisms" of Europe are programmes of artificial hatred, the propagandists of which may actually be of the same blood as their opponents; a single generation suffices for the manufacture of the racial enthusiast, which is often completed by a modification of the family name. Even Greeks and Bulgars are frequently of common descent. When a Macedonian village changes hands the Greek Karagiozes has been known to develop into the Bulgarian Karagiozoff; and a Mazarakis will boast a racial incompatibility with his second cousin Madjarieff. The same process for the manufacture of nationalism may be detected at the other end of Europe: at Mons of glorious memory there was a Walloon with the good old Walloon name of Le Grand, whose grandfather had been an equally enthusiastic Fleming with the good old Flemish name of De Groodt.

True nationalism may indeed be differentiated by the absence of this artificial element of ethnological hatred. True nationalism is simply the feeling for the small independent community, a movement for the autonomy of the local group. No true manifestation of the nationalist movement in Europe is ever opposed to other nationalisms; but all alike are involved in a desperate political conflict with their common enemy Imperialism.

FOOTNOTES:

Sec. 5

Imperialism the Enemy

Imperialism, on the other hand, is the feeling for large dominions and is very often only an unreasoning lust for the possession of territory: surviving perhaps from the time when the land of the community was regarded as the reserved hunting-ground of the tribal chief, or at least as the private estate of the national monarch. But in so far as this passionate desire for extending the superficial territory under the central government is a reasoning desire, in so far that is as attempts have been made to justify by retrospective theories the almost instinctive achievements of painting the map red, it is fairly clear (although the issues have been confused by altruistic and Kiplingesque but not by any means unfounded views about the White Man's Burden) that Imperialism is based on the insatiable claims of over-productive commerce. Commerce at any rate is the ex post facto excuse for the foundation of the British Empire, and if it can no longer be pleaded as a reason for the maintenance of the British Empire, it is simply because the British Empire is no longer an empire, but for the most part a federation of autonomous states. But Imperialism has only been scotched by the unconscious wisdom of English political development. It still unhappily survives not only in the intermittent demand for the acquisition of fresh colonial territory, but also, in its crudest form, without even the shadow of an excuse commercial or altruistic, in the continued subjection of Ireland to English rule. We must not be surprised if the imperialistic elements of the State receive after the war a new lease of life from the mutual encouragement of commerce and militarism.

The commercial classes of course support Imperialism because, with an obtuseness permitted only to our "business men," they believe that the acquisition of more colonies still means the discovery of new markets. They have not yet realised that nowadays all markets are practically open markets, and that no tariff can effectively exclude goods for which there is any demand, for the simple reason that an effective demand cheerfully pays an increased price. All nations in fact stand to share fairly the commercial advantage of each other's colonial markets: and it might even be shown by a little simple book-keeping that the particular balance any nation gains from trading with a colony of its own must be debited with the expense of governing that colony. In short, the commercial excuse for Imperialism is actually obsolete. Yet commerce continues to support Imperialism, and although the original reason for this support is no longer valid, it is still, unconsciously perhaps but very methodically, serving its own interests by this support, in so far as Imperialism involves militarism (or "navalism") and so leads to the probability of war. But even if the commercial reasons which constitute the only possible excuse for Imperialism were still valid, it would still remain equally valid and much more important that Imperialism is bad in itself, the enemy of liberty and the begetter of arrogance.

Imperialism is bad on general grounds because it implies a centralisation of authority which violates the natural rights of nationalities. A nationality, as has already been suggested, means not necessarily a pure racial enclave, but simply a small local group, in the formation of which similarity of "race," religion, and culture will not be ignored but will naturally be considered as modifications of primarily geographical boundaries. The right of nationalities to local autonomy, to deal again only with the simplest general reason, is based on the idea of democracy, the exercise of a political voice being regarded as a natural and inalienable right of the free citizen. Democracy means representative government, and representative government simply does not work in a large and mixed community of more than twenty millions. Hence the right of nationalities to local autonomy is fundamental, and is inconsistent with Imperialism as such.

Imperialism is bad because it is based on conquest, implies a "subject race," and sooner or later will have to be maintained by war. It breeds a conquering and commercial spirit, which is never satisfied unless it is carrying some one else's burden (at a high freight). The imperialist plutocracy will then find itself so much occupied with other people's affairs that it will be neglecting domestic politics altogether: and this neglect will be the more disastrous in so far as poverty and servitude will have increased at the same rate as luxury. The citizens of an Imperialist state will be unable to control their commercial masters, and, as Rousseau said of the English, will soon find themselves a nation of slaves: and that not only because a policy of conquest is incompatible with democracy; but also because the lust of conquest and the arrogance of

FOOTNOTES:

"The British Colonial Empire of to-day is not the Empire which was the outcome of seventeenth-century methods. So far as the colonists themselves were concerned, English colonisation (in the seventeenth and eighteenth centuries) was a complete success, but from the point of view of the mother country it was a failure, and the rock on which it foundered was the same rock which lost America to Spain and caused Canada to acquiesce in separation from France."]

militarism acquire strength with each fresh licence until the community as a whole is quite unable to control its own baser passions--a condition which more than any other merits the name of servitude. Imperialism is a form of political corruption in which a nation is consoled for its own slavery by the pride of enslaving its neighbours. The attainment of permanent peace connotes the abandonment of Imperialism.

FOOTNOTES:

Sec. 6

Possible Objects of War

If the nations are prepared to abandon the claims of Imperialism there will be very little else left to fight about. An examination of the documents connected with any war of the last century shows that the object of a belligerent in prolonging the agony is usually expressed in vague language that can be dissolved by a little analysis. Sometimes a government will propose, in the interests of peace and good government, to crush the enemy's aggressiveness by a purely defensive aggression, an excuse for bloodshed which only the most fanatical pacifist could confuse with Mr. Asquith's blunt watchword of "crushing German militarism." The logical fallacy of such an excuse which is almost invariably pleaded by powerful belligerents, a fallacy of which no one could wish to accuse Mr. Asquith's solid intellect, lies (quite apart from any question of the priority of aggression) in the fact that any attempt to crush by force the Will to Conquer inevitably breeds more militarism. The tag about taking a lesson from the enemy, fas est et ab hoste doceri, is only one half of the unhappy truth that the fighter is fatally bound to acquire his enemy's worst characteristics. The object undertaken apparently in the interests of democracy can only be accomplished by the wholesale suppression of democratic rights, and involves an organised manufacture of imperialistic emotion which ends by delegating the authority of the State to a reactionary triumvirate of bureaucracy, jingoism and vulgarity (or Tory, Landowner and Journalist). The guarantees of democracy, the rights of free thought and free speech, every sort of civil liberty and every defence against the servile state, will all have to be suppressed in the interests of the nation at war. It is the old story of the conversion of Thais by Paphnutius: the preacher snatches lovely Thais from the burning, but himself is damned--"si hideux qu'en passant la main sur son visage, il sentit sa laideur." A is white and finds it necessary to whitewash B, who is black: after several years of hopeless grey, A finds that he has indeed put some very satisfactory daubs of whitewash all over B, but that his own coat has been blackened in the course of the struggle. It is as if a gardener, having heard of the cannibalistic habit of earwigs, proposed to exterminate the earwig in his rose-garden by importing a special army of five million earwigs collected at great expense from the surrounding country.

Other belligerent governments will raise the plea of checking the spread of a hostile and dangerous culture; a plausible because apparently philosophical justification of war as the only means of extirpating a heresy that might pervert the whole future of European civilisation. Unfortunately such a moral effect, such a "conversion by shock," could only be accomplished by a very sudden, complete and shattering victory; and it is now beginning to be recognised that spectacular triumphs are not to be expected in modern warfare. But even if it were as possible by violence as it might conceivably be desirable to extirpate or even to limit the propagation of a particular form of mental culture, the achievement would certainly not be worth the cost to the unhappy survivors and their posterity. It would indeed be a crime against humanity to eliminate the better part of the younger generation, the flower of human brains, in the monstrous pedantry of attempting to correct an intellectual error. For the risks of modern warfare are not ordinary. It is not sufficiently realised that in six months of offensive tactics under modern conditions no man in the front line has more than one chance in a million of escaping death or mutilation.

There may remain the plea that a prolonged campaign is necessary in order by exhaustion to compel the enemy to evacuate some territory that he may have wrongfully occupied. The inevitable answer to such a plea would be that if a war had arrived at a stage in which there was a clear possibility of coercing the enemy by a process of exhaustion, that possibility, if it were well-founded, would certainly not have escaped the intelligence of the enemy, who would consequently be prepared to save his face by coming to terms. The evacuation of the occupied territory, or whatever it is that was to be achieved by the coercive exhaustion of another year or two of battle, might then be obtained by negotiation at once, and at the cost of a certain amount of paper and ink, instead of being forced on a revengeful and embittered opponent by the expensive process of killing young men, a process which has the disadvantage of working both ways.

The conclusion of these general considerations seems to be that all the arguments that are likely to be put forward in the course of a war in order to excuse and ensure its continuation, are only excuses to gain time, put forward in hope that the chances of a further campaign may enable the government concerned to retrieve some apparent advantage out of the disastrous muddle through which they drifted into the first declaration of war. Having drawn the sword in a moment of embarrassment, they have now jolly well got to pretend that it was the right thing to do, and are not going to sheathe it till they see a chance of proving that they are glad they drew it. In short, there comes a point in all modern wars in which the belligerents are fighting for nothing at all, except for a more or less advantageous position from which to discuss a way to stop fighting.

FOOTNOTES:

"Bismarck repeatedly and explicitly in the Reichstag justified the wars of 1864, 1866, and 1870 as 'defensive'--i.e. as not 'willed' by Prussia. On the contrary, they were wars 'forced' on a peace-loving State denied its 'rights' by Denmark, Austria, and France. The argument, briefly, on Bismarckian principles is this. Prussia's policy is an 'Interessenpolitik'--a policy of 'interests.' An 'interest' confers a 'right.' The satisfaction of 'national interest' is therefore the achievement of 'national rights.' If these 'rights' can be achieved by a compromise--i.e. by the complete surrender of Prussia's opponents to the demands based on these 'rights'--that is a proof of her peace-loving nature. But if her opponents refuse, then the war by which the 'rights' are secured is a war 'forced' on Prussia. She has not 'willed' it. It is a 'defensive' war to prevent the robbery of her 'rights' by others; Bismarck, not without difficulty, converted his Sovereign to this argument. In each case--1864, 1866, 1870--William I was ultimately convinced that Denmark, Austria, and France were resisting the 'rights' of Prussia, and that war to secure them was 'defensive,' 'forced' on the King, and just. The successful issues confirmed William's conscience and proved that Bismarckian principles had the Divine sanction."]

Sec. 7

Physical Force in a Moral World

The explanation of all this seems to lie in the simple fact that it is for ever impossible to solve questions of moral or political principle by the expenditure of physical force. Anyone at all conversant with philosophical thought, if I may adopt a simile used by Mr. H. G. Wells, "would as soon think of trying to kill the square root of 2 with a rook rifle." Physical violence can only solve purely physical problems. But as man no longer exists, if he ever did exist, in the completely unsocial "state of nature," the relations of one individual with another are no longer purely physical: their position as members of one society has given them a moral relation, questions affecting which can only be settled by reference to the judgment of the society as a whole. Within the limits of the State this fact is already clearly recognised by the common voice of public opinion. If Smith quarrels with his neighbour Robinson, because Smith's old English sheep-dog is suspected of having scratched up Robinson's lawn, and Smith says the poor dog would never do such a thing, and anyhow Robinson had no business to leave his back gate open, while Robinson declares that that brute is becoming a damned nuisance, and so provokes Smith to express a hope that now perhaps that grass of Robinson's won't want so much godless mowing on Sunday morning: if two neighbours, in short, have a difference of opinion they both know perfectly well that the rights of the argument can never be decided by a free fight in the middle of the road, even if one of them happens to be a heavy-weight champion. Moreover, if they do come to blows it is perfectly certain that the opinion of the whole road will be against them, and that the Law, to which they might have appealed in the first instance, will intervene as the embodiment of that opinion. The street fight is clearly recognised as not only futile but immoral; it not only settles no questions of principle but it constitutes a breach of the moral relation between two members of one community; it is become merely a rather sordid exhibition of irrelevant physical facts. The average citizen of England or Germany would never think of encouraging a fight between two sides of a street: why does he not recognise with equal directness the futility and immorality of a fight between two sides of a continent? It is only because public opinion has not yet effectively realised that the moral sphere includes not only the citizens of one city and the cities of one nation, but the nations of a continent and the continents of the world. But it is a fact that the moral sphere does include the whole of humanity, who are colleagues in the task of civilisation, inspired by the twentieth-century corollary of gloomy nineteenth-century religious agnosticism, the cheerful corollary that it is Man's duty rather than God's to improve the habitable earth. The truth of this fact is already recognised by the better thought of all the nations concerned, and there is no reason why it should be withheld any longer from the people who suffer most by its suppression. As soon as public opinion is allowed to grasp this truth--and it is only too willing to clutch at any generalisation that is emotionally encouraged by its governors--there need be no difficulty at all in embodying that opinion in some form of international government: for, as Rousseau might have said, where there's a General Will, there's a way. As a matter of fact the way has already been admirably mapped by several parties of surveyors.

On the constitution of an International Authority, even on the general aspiration of Europe towards some form of supernational judicature, war will cease to have any more attraction or justification than the street brawl. For war is actually in the community of nations what the street fight is between individual citizens. War is futile, because it can settle no questions of principle; it is immoral, because it is an offence against the membership of a moral community. There is abundant evidence in Blue Books and in the overt acts of Germany that war releases and encourages the elementary brutality of the individual which is normally inhibited by the consciousness of social relations. I have tried to show in a former chapter that war serves the lowest interests of a parasitic commercial class at the expense of the better part of the community. War fosters at the same time the basest elements in the individual, and the basest individuals in the community. War is a crime against the peace of the people.

FOOTNOTES:

Sec. 8

Imperialism and Capitalism through War and Trade the Enemies: Socialism to the Rescue

It is the most remarkable fact in political bibliography that all the Utopias worth mentioning have been written by Socialists. The fact is not surprising to anyone who has considered that the Socialists are the only political party in the State who ever attempt to look more than a dozen years ahead. The ordinary politician steers the ship by keeping a look-out for rocks and squalls, and does not trouble to make for any distant landmark. Only the Socialist looks ahead to a harbour attainable perhaps in a hundred years, from which a happier voyage may be begun. Only the Socialist seems to realise that in the world conceived, as modern thought must conceive it, as a continuous process, Government rather than Trade, Science and Art rather than Industry are the chief activities of the citizen. Government is nothing less than the organisation of the State to take its place among the other States of the world. It includes of course education, being itself a form of education: for the State must be educated to fulfil its duty to other States, just as the citizen must be (and more or less is) educated in duty towards his neighbour. The first task of education is naturally to eliminate violence, to inhibit, by inducing in the young citizen the recognition of mutual rights, those acts of ferocity by which primitive man instinctively expresses his solipsistic passions.

But where, it may well be asked, is the authority which is to begin the neglected education of the nations of Europe? Where is what Mr. Boon (or Mr. Bliss) would call "the Mind of the Race"? At present the only body of doctrine with any conception of the nature of government for the collective benefit of humanity is International Socialism. It is the International Socialists who must lead the attack on War, if only because the only instigators of war themselves form an international body in so far as the only occasions for war are contrived by the Imperialists and Capitalists who are to be found in every nation. To Socialism belongs the duty of educating Europe against Imperialism, as it has begun to educate the nation against Capitalism; for Imperialism is only an allotropic form of Capitalism, manifesting itself in the exploitation of fellow-nations instead of in the exploitation of fellow-citizens. The first step in that education must be the fight not only against "private" or profiteering Trade, but against "private" or profiteering War: and "private war" is every war that is not authorised by an International Authority and waged by an International army.

I seem to have heard it said before that there is only one way to break the chains that bind us: and that Amalgamation is the mother of Liberty. The need for the education of Europe is a call to the Trade Unionists and Fabians and Collectivists and Guildsmen of every Nation:

SOCIALISTS OF THE WORLD UNITE.

* * * * *

APPENDIX TO CHAPTER III

SOME TYPICAL WAR PROFITS

I. The Manchester Guardian, January 3, 1916:

BRITISH INDUSTRY IN WAR

The first full calendar year of war has been a period of unparalleled industrial activity and, generally speaking, prosperity in this country. Heavy losses and bad times have been encountered in a few important industries, but these are balanced by unprecedented profits made by a large variety of industries, whether directly or indirectly affected by the war. One frequently finds that the neutral visitor carries away with him an impression of industrial England as one great living arsenal. That is not surprising, as since July last the Munitions Ministry has erected (or improvised) and started a large number (it is not permissible to say how many) of State munitions works, and it has also mobilised the whole engineering resources of the nation to such an extent that in the first week of December no fewer than 2026 manufacturing establishments had been declared "controlled firms."

But it would be a mistake to suppose that, while war manufactures prospered, all other industry languished and decayed. To prove the contrary and show that only here and there were there heavy losses, we may quote some figures compiled by the Economist, which show that 720 industrial concerns publishing their reports during the first nine months of 1915, and having a capital of L531,678,701, made profits amounting to L52,881,300, or under 2-1/4 millions less than in the previous year (which in the case of almost all the reports was a year before the war).

Dissecting these figures, we find that not only iron, coal, steel, and shipping companies report enormous profits, but that increased earnings were shown by breweries, gas, rubber, oil, and trust companies, and others. The large exceptions which depressed the total profits were textile companies (other than those engaged on war contracts), catering, and cement companies. Shipping leads the van of prosperity owing to phenomenal freight rates, while iron and steel and shipbuilding, as direct and established purveyors of armaments, are close behind. As showing the industrial tendency of the year, one may quote the remarks of a trust company chairman at a recent meeting. Of 150 home investments possessed by his company, he remarked that a hundred had since the war yielded the same as in the year before war, while thirty had paid less and twenty more.

Into the circle of munition producers have been drawn cycle and motor, machinery, electrical, and many other branches of manufacture. Of other industries driven to fever heat by the war may be mentioned woollen and leather factories. Secondary effects of the war also produced a boom in several unexpected quarters. For instance, the high wages earned by war workers, and too generously spent in a vast number of cases, led to a strong demand for cheap furniture, pianos and many types of household goods which in normal times are usually out of reach of the purse of most wage-earners. But one trouble has beset all industries in common--a shortage of labour, which cannot but grow with every increase to the numbers of men drafted from the ranks of productive industry into the army or the munitions works. From all quarters comes the tale of orders, both from home and from abroad, that cannot be accepted. In the case of foreign orders that have to be refused, the labour shortage has what one fears may be lasting consequences. For custom once diverted to America or elsewhere is not easily regained.

2. The Manchester Guardian, March 3, 1916:

MORE GREAT PROFITS

HOLT LINE'S ENORMOUS SURPLUS

The China Mutual Steam Navigation Company (Holt Line) has had a greater year than ever. It has been supposed that regular liners were getting little benefit from the boom in freights, but a profit of L591,005, as against about L294,000 in 1914 and L386,418 in 1913, can only be explained by a very large participation in special war-time gains. The dividend and bonus on the ordinary shares make 106 per cent for the fourth year in succession, and a still larger sum is being kept in hand, L200,000 being put to the reserve, as against L50,000 for 1914 and L100,000 for each of two years before that, and the balance forward is raised from L81,014 to L201,367. Most of the Company's capital, however, only bears 6 per cent interest. The ordinary shares (which we believe are held privately) only amount to a little over L83,000.

3. Pall Mall Gazette, September 24, 1915:

WAR PROFITS

The other taxes are accepted by the public and traders alike as inevitable, but special interest is being taken in the excess war profits tax. That Mr. McKenna is likely to find his estimate of L30,000,000 largely exceeded is admitted. The Daily Chronicle publishes a table in which the City Editor compares the last profits announced by some of our greatest undertakings, covering a considerable portion of the war period in most and some portion of it in all cases, with the average of the previous three years. It will be seen that in every instance the war has brought greatly increased prosperity.

Last Average Profit. Previous Increase. 3 years. L L L

ARMSTRONG WHITWORTH 802,000 624,000 178,000 (Engineering, Shipb., etc.)

WM. BEARDMORE 219,000 185,000 34,000 (Engineering, Shipb., etc.)

JOHN BROWN 586,000 347,000 239,000 (Engineers, Shipbuilders, etc.)

BEYER PEACOCK 83,000 35,000 48,000 (Locomotive Builders)

BRUNNER MOND 824,000 770,000 54,000 (Alkali Manufacturers)

CAMMELL, LAIRD 238,000 147,000 91,000 (Iron, Steel, and Shipb.)

HAWTHORN LESLIE 202,000 102,000 100,000 (Sh'b. & Marine Engin'ring)

KYNOCH'S 153,000 114,000 39,000 (Explosives)

LAMBERT BROS. 142,000 84,000 58,000 (Coal Exporters, etc.)

POWELL DUFFRYN 422,000 279,000 143,000 (Collieries)

SAMUEL FOX 66,000 39,000 27,000 (Engineers)

SPILLERS & BAKERS 367,000 140,000 227,000 (Millers)

VICKERS, LTD. 1,019,000 809,000 210,000 (Eng. and Shipbuilding)

This table indicates that the Chancellor may expect to receive far more than the sum he estimated from the war profits tax.

4. The Manchester Guardian, Feb. 28, 1916:

COAL PROFITS NEARLY DOUBLED

The tale of colliery war profits is continued by the report of North's Navigation Collieries (Glamorganshire). The output for 1915 was actually less by 87,810 tons (1,141,900 tons against 1,229,710), but the profit was nearly doubled--L130,071 against L65,578. With the L10,496 brought into the account the directors had their biggest total in recent years available for distribution. The ordinary shareholders get 10 per cent and a bonus of 2-1/2 per cent, which is the best payment since the 15 per cent paid for 1907. Advantage is taken of a prosperous year to place L35,000 to the reserve fund, which has been rather overlooked recently, only one allocation of L20,000 having been made in four years. It now stands at L155,000, against L650,000 of share capital. For depreciation, with regard to which item substantial provision is made each year, L15,000 is written off. This leaves L10,567 to be carried forward. The Company has the reputation of being well managed, and its coal properties are regarded as being very valuable. The recently opened St. John's pits are being developed satisfactorily, it appears, a further increase in output being shown.

Despite a decrease in output of nearly 400,000 tons, the Powell Duffryn Steam Coal Company is enabled to show a profit for 1915 of L438,799, as compared with L422,204 for 1914 and L364,421 for 1913. The usual 20 per cent is distributed on the ordinary shares, free of income tax, and last year's allocation of L50,000 to the reserve fund is repeated. In addition, the reserve for income tax benefits to the extent of L50,052, and there remains L120,236 to carry forward. The decrease in output, it should be noted, is due to the enlistment of the miners, and its restoration to the normal and probable increase after the war should balance the decline in profit that may be expected to attend the decreased demand.

5. The Times, May 19, 1916:

SOAPMAKERS' "RECORD" PROFITS

Presiding yesterday at the annual meeting of Joseph Watson and Sons (Limited), soapmakers, Leeds, Mr. Joseph Watson said that the company's profits for the year amounted to L122,000, or L19,000 in excess of any previous year's profits. Their turnover had largely increased because they were now supplying soap to France, Belgium, Scandinavia, and a small amount to Spain and Italy. It was not a question to-day of getting orders; it was a question of refusing them. They had at the present time three months' orders on the books.

6. The New Witness:

THE SCANDAL OF WAR PROFITS

It is a sinister and deplorable fact--one of the most ironical with which the continuance of the War has yet confronted us--that there has grown up in Great Britain a number of firms and businesses to whom a successful prosecution of the campaign would mean ruin, and who have an actual vested interest in the indecisive continuance of hostilities. This is due entirely to the lack of grip and resolution which the Government have displayed in dealing with the ugly phenomenon of War Profits. We know, of course, what happens to those profits at present. Half is taken by the State: half passes to the firms who are getting "rich quick" out of its necessities. In theory, it is an anomalous arrangement, indefensible in logic, and opposed to every canon alike of justice and of taxation. In practice it works out in the way we have indicated: that certain privileged firms and individuals are amassing huge fortunes out of the gravest crisis through which the nation has passed, and which will pinch us all before it is over.

Let us give some examples of the mammoth profits that some of these concerns are making. There is first of all the famous old English firm of Levinstein--Messrs. Levinstein of Manchester--to be considered. This "all-British" concern has not done badly out of the terrible situation through which we are slowly toiling. While mere vulgar English Tommies have been dying in the trenches or have returned incapacitated to England--to find that their country cannot afford them a pension--Levinsteins have been pocketing several thousands of that country's cash. Levinsteins' are dye-makers, and in 1914-15 they made a profit of L80,000 on a capital of L90,000: a profit large enough to make the mouth of the deceased usurer Kirkwood dry with envy. But, while our legislature passed laws to restrain the usurer in his exactions, the "war profiteer" has no restriction placed on him. His workmen can, in certain cases, be fined or sent to prison if they absent themselves from work, and hundreds have been proceeded against under the Defence of the Realm Act. But the profiteer himself is immune! It is childish to say that the State can recover half of the profit he has wrung from the country's necessity. What right has he to the other half? In the case of Levinstein, this L80,000 profit enables the company to pay 14-1/2 years' preference dividend, to distribute a dividend of 30 per cent on its ordinary shares, and to write off L21,000 for depreciation! It is merely fatuous to pretend, or to endeavour to pretend, that the appropriation of half these profits squares matters between the community and the British firm in question.

As with Levinstein, so with other firms. Messrs. Cammell, Laird & Co. averaged profits of L146,000 for the three years before the war. Since last year those profits have risen to L237,000. Those profits, of course, are subject to war profits taxation. But most manifestly that taxation is utterly inadequate. So it is in the case of Messrs. W. Beardmore, whose profits rose from L184,000 (three years' pre-war average) to L219,000; of the British Westinghouse Co., which rose from L56,000 to L151,000; and of Beyer Peacock's, which increased from L57,000 to L109,000.

In all these cases the deduction of 50 per cent by the Government is entirely inadequate and utterly misleading. It is at once an admission that the firm in question has no right to amass huge profits out of the welter and tragedy of the European War, and that the State is content to stultify itself by surrendering the other half.

Many of these profits have been made by covering rises in raw material far in excess of the actual increases. Many have been wrung from the poor and the needy, who are now being enjoined by the Government to eat less meat. Messrs. Spillers & Baker, of South Wales, increased their profits from an average of L140,000 (three years' pre-war average) to L367,000 in 1914-15. We do not blame them. The rise in price was beyond their control. They could hardly help benefiting. But it is mere madness for the Government to leave them in possession of these vast accretions of wealth. Firms that paid 8 per cent before the war, now paying 22-1/2 per cent (such as Messrs. Richard Dickeson & Co., the Army contractors) are able to pocket tens of thousands that ought to go to strengthen the resources of the nation. Others, like the Mercantile Steamship Co., increase their dividend from 20 per cent to 35 per cent; and some are able to pay dividends actually larger than the capital of the company itself!

It is ludicrous for the Government to allow this condition of affairs to continue. Their course is quite clear. They should limit profits to the average of three years before the war, and add at the most 5 per cent. Anything short of this is a betrayal of the national interests to private firms.

7. The New Statesman, March 25, 1916:

An innocent person might think that when a manufacturing company is faced with an enormous rise in the cost of the principal commodity it consumes, its profits would be diminished. Some law must be in operation which has escaped the attention of economists, for so far from this being the case, what appears to happen is that the profits of manufacturers rise in a greater degree than the price of the raw material. Thus, so far from being hit by the enormous rise in the price of flour, Peek, Frean & Co., the well-known biscuit manufacturers, made a net profit of L107,478 last year, as compared with L99,578 in 1914, and L98,607 in 1913. After paying the usual 5 per cent on the L300,000 of preference shares no less than 25 per cent is paid on the L230,000 of ordinary share capital, which has been issued. This company raised its money very cheaply from the public, which paid 102 per cent for its 4 per cent debenture stock and par for the 5 per cent preference shares. The investing public does not benefit by the big dividend on the ordinary shares. These were never offered to the public, but are privately held.

Another shipping company, sister to the Court Line, mentioned in these notes last week, has issued its report. This is the Cressington Steamship Company, which owns two modern tramp steamers of slightly over 7,000 tons each. The company was very fortunate in that one of these vessels was delivered in February, 1915, it having been contracted for at pre-war prices. The profits for the year amounted to L50,015, as compared with L6,861 in 1914 (when only one vessel was trading). The dividend for the year is 15 per cent, L7,072 is allocated to depreciation, L22,000 for special war profits and income-tax, whilst about L3,000 is being carried forward. The financial position of the company is such that if its ships were sold at L2 15s. per ton, shareholders would receive the return of their capital in full. On present prices, however, they would probably fetch over L15 per ton. The shares are now quoted at 28s.

The Bengal Iron and Steel Company, whose report has also been issued during the week, has had an interesting career; it works large iron ore and coalmining areas in Bengal. At first the company did well, but then it went in for an unfortunate steel venture and fell into arrears with its preference dividend. This was overcome, and during the past few years the company has done well, particularly from its coal business. The report for the year ended September 30th, 1915, shows a working profit of L144,913, as compared with L79,200 during the previous year. This considerable improvement enables the company, after writing off various old items, to place to a general reserve L20,000, and to declare a dividend payable quarterly of 24 per cent on the L224,850 of ordinary shares, which compares with 12 per cent a year ago. By way of a change, the report states that the trading results would have been even better had war conditions not prevailed.

EMIL DAVIES.

8. The New Statesman, May 27, 1916:

Markets have displayed unwonted cheerfulness during the past week, and all sorts of peace rumours are in circulation. It is more than likely, however, that it is the firmness of the market which is responsible for the rumours, and not vice versa. There is a steady stream of orders from the Midlands and the North, where people are making money, and these have the effect of putting up prices in several of the markets. The Brazilian Funding Loan, which was recommended here on the 29th April at 74, has been noticeably firm, and is now 77-1/4. It still appears to be the cheapest Government Loan. Brazilian securities are attracting more attention, and Brazil Traction Common, which a year ago was below 50, now stands at 64. There has been a large business in Castner Kellner on the working agreement between that chemical company and Brunner, Mond & Co., the shares having jumped four or five shillings to their present price of 69s. 6d. Precisely a year ago they were recommended in these notes at 66s. 10-1/2d. Shipping shares have been exceptionally firm; Court Lines have risen another few shillings to 34s., the large business in them being probably due to the fact that they are one of the few shipping shares which can be obtained. Rubber shares are equally firm. Nobel's Explosive Company has just issued its report for last year, showing a profit of L529,738 after providing for excess profits duty. The dividend is 15 per cent, free of income-tax, or 5 per cent more than last year. This increase in the dividend came as a surprise to the market, and the price of the shares (which are a favourite investment in Glasgow) jumped from 31s. to 38s. 3d.

The profits of the Oceanic Steam Navigation Company (the White Star Line) for last year have attracted a good deal of attention. They were stated as being L1,968,285, as compared with L887,548 in 1914 and L1,121,268 in 1913, which was the Company's record year; but the figure given for 1915 does not indicate the full profit, for it is arrived at "after providing for excess profits taxation and contingent liabilities." Replying to a question asked in the House of Commons by Mr. W. C. Anderson, Captain Pretyman stated that the Company informed him that the profit mentioned was before deduction of debenture interest and depreciation. Captain Pretyman added that the sum divided as dividend was L487,500, the same amount as in the year 1913 before the war. Where people are protesting against large war profits it may, at first sight, appear an adequate answer to point out that a Company is not paying out more in dividends than it did in the year preceding the war. As a statement of fact it is perfectly correct, but it has no bearing upon the amount of profit that has been made, as the following calculation will show. We now know that the 1915 profit shown in the accounts is after allowing for excess profits taxation, deferred repairs, contingent liabilities, debenture interest and depreciation. Since 1913 the Company has increased its debenture issue, and last year had to pay in debenture interest L109,536, as compared with L65,211 in 1914. How much has been placed on one side for depreciation before showing the profits can only be known to very few people, but the amount the Company must have put on one side for excess profits taxation must be at least half a million, and possibly a great deal more. The actual profits for last year were therefore probably in the neighbourhood of three millions, if not more. As indicated above, out of the L1,968,285 shown as profit, only L487,500 is paid out in dividends, the remainder going to various reserves. The dividend works out at 65 per cent, but all goes to the International Mercantile Marine Company, the much-talked-of American shipping trust associated with the name of the late J. Pierpont Morgan, which holds all the Ordinary Shares. The trust was in a bankrupt condition prior to the war, but the present state of affairs is radically altering its position. It must be annoying to the American holders that a large slice of the profits of an American-owned concern has to go to the British Government in the shape of war taxation.

9. The New Statesman, June 24, 1916:

Another firm which has apparently benefited by the war is Ruston, Proctor & Co., the well-known Lincoln manufacturers of agricultural implements. A final dividend of 5-1/2 per cent is declared, plus a bonus of 2 per cent, making 10 per cent for the year, which still allows the Company to place L45,000 to reserve and to carry over L16,300. This dividend is 3 per cent more than was paid last year, and is the highest in the twenty-six years' history of the Company. Shipping shares remain firm, and it is almost impossible to purchase any of the best shares. As an illustration of the profits that are being made, the Nitrate Producers' Steamship Company's accounts for the year ended April 30th last show a gross profit of L404,022, as compared with L151,905 and L135,986 in 1914 and 1913 respectively. The dividend is 25 per cent, free of income tax, L100,000 is placed to reserve, L200,000 to a special fund for excess profits tax, income tax, etc., L30,000 is added to the insurance fund, and the carry forward is increased by some L7000. The Company owned a fleet of ten steamers, which has, however, been reduced to five by the sinking of one last September by an enemy submarine and by the sale of four vessels. A new vessel is under construction, and should be ready for delivery in August. The capital of the Company consists of L200,000 in Ordinary Shares and L200,000 in 5 per cent Cumulative Preference Shares.

10. The New Witness, June 15, 1916:

WAR PROFITS AND THE GOVERNMENT

It is essential that a determined effort should be made to rouse the nation to a sense of the gross and scandalous injustice of the huge profits that are at present being "earned" by certain firms piling up wealth which is really amazing to contemplate. This is not mere empty rhetoric; the figures support the description up to the hilt. Let us take the case of five well-known companies, all engaged in "war work," and see to what account they have turned our soldiers' sacrifices:--

FIRMS. PROFITS.

1913 1914 1915

L L L

Cammell, Laird 171,700 235,500 301,500

Curtis & Harvey 48,100 77,800 143,800

Projectile 14,000 40,400 192,700

Webley & Scott 9,500 16,400 61,300

Thornycroft 13,000 107,640 267,333 (6 mos.)

These figures can only be described as staggering--staggering, that is, to anyone who cherishes a faint, lingering belief that "equality of sacrifice" is to be a reality and not merely a bitter jest. Look for a moment at the tale that these profits show! The Projectile Company has multiplied its 1913 profit thirteen times over! Five or six years ago its affairs were in so parlous a state that 19s. had to be written off as lost from each 20s. share. Now, as Mr. Charles Duguid reminds us, "it is paying a first dividend of 50 per cent and is returning to the shareholders 3s. 6d. out of the 19s. they regarded as lost." The return on the shares, according to the same financial authority, is 400 per cent!!!

Look at the case of Thornycrofts. The profits for the first half of 1915 are twenty times as big as the profit for the whole of 1913--an increase, as Mr. Duguid reminds us, of 3800 per cent upon the year, a year that will spell blank financial ruin, impoverishment and destitution to the families of thousands and tens of thousands of our fighting men!

Thornycrofts are by no means peculiarly fortunate; Nobels, for instance, have managed to earn quite a tidy little profit. Their net profit for 1915 comes out, we learn, at over half a million sterling (L529,800), exclusive of L213,900 brought forward out of the large profit of the preceding year, and this makes the total amount available for distribution as much as L743,700. Even after paying a dividend of 10 per cent and a bonus of 5 per cent, making 15 per cent, all free of income tax, the Company has still L424,700 unallocated. In its most prosperous year, 1913-1914, the net profit of the Nobel Dynamite Trust did not amount to more than L381,300. We have, we need hardly say, no feeling against Nobels or Thornycrofts or the Projectile Company. We only want fair play in this matter. If this aggregation of profits is not stopped the wealth of England will be in the hands of men who will regard the triumphant conclusion of the War as spelling ruin to themselves and who will see in victory only the cessation of profits that in normal times they have never dared to contemplate.

The remedy for this is simple. The Government have refused to the workman the right to extort unearned increment out of the country in its dire necessity. The workman may not strike or cease work or even change employment without the permission of the State. Assuredly the State has the right to exact that obedience from him. But it is essential that it should, and at no distant date, lay its restraining hands also upon the employers who are earning these huge dividends, otherwise we shall have enacted in England the tragedy that we have seen in Ireland. We shall have a Government without moral authority, a Government which will, therefore, be perpetually embarrassed in the conduct of war.

11. The New Witness, June 15, 1916:

WILLIAM CORY & SON

This famous coal company has taken every advantage of the demand for coal, and can show a record profit. After providing for excess profits, the balance of profit is L453,136, or L237,808 more than last year. As I have again and again pointed out, I do not think the Government should allow such huge profits to be made in war time. The coal trade is in a few hands, and firms like Corys may be said to control it. The directors content themselves with raising the dividend 5 per cent to 15 per cent; but they place L100,000 to reserves, making them L500,000; L30,000 goes to staff pensions and L25,000 to a war fund for employees. The carry forward is raised L30,740 to L88,969. The steamers, tugs and barges are now to be formed as separate companies; and the French business is also to be transferred to a subsidiary. The balance-sheet shows creditors up L204,971, presumably to meet the excess profits liability. Debit balances have increased L509,840, and now include Treasury bills. War loans have been increased L280,652, and the total assets are up L451,183, at L4,541,601, and have earned 10 per cent. When all creditors have been paid the quick assets amount to L930,654, and amply protect the debentures, L900,000 which are an admirable security. I do not suppose the present Ministry will do anything to control the profits made out of the War by those who run the coal trade; and, therefore, we may expect that 1916-17 will be as good a year as that just ended. But I am not in agreement with a policy of laissez-faire in war time unless the policy is carried out stringently.

HOLBROOKS

Apparently the sauce trade has not been seriously injured by the War, for Holbrooks have increased their trading profit L4,694 to L35,170; but income tax is higher, and L5,000 has been used as a special reserve for investments, so the available profit is only L23,046, as against L25,055 in the previous year. The dividend remains at 20 per cent, but L3,072 more is carried forward than was brought in, and the Board say that the unsettled state of the world justifies them in doing this. I suspect that they are building up a reserve for the purpose of attacking the Yankee trade which for so many years has been in the hands of Lea & Perrins. The business is well managed by the two managing directors, who have been in the firm since it was promoted. The alterations in the balance-sheet are not of any moment. Quick assets total L151,557 when liabilities have been met, and the assets have earned 7-1/2 per cent on their book value--not a very splendid profit for a sauce.

JAMES HINKS & SON

This famous firm of lamp makers should benefit largely by the complete absence of German competition all over the world, and the eleven months show the satisfactory profit of L13,595. The dividend for the previous thirteen months was only 6 per cent, but the report now issued declares 10 per cent and a bonus of 1s. 6d., or 17-1/2 per cent--a record distribution. Also L2,250 is placed to reserve and the carry forward is raised from L3,603 to L6,399. As long as the War lasts we may expect this remarkable prosperity to continue. The reserves are now in excess of the capital. The company has earned 7-1/2 per cent on the book value of its assets, which, in spite of goodwill and patents having been written off, looks as though they were fully valued at L179,765. The shares are a fair industrial speculation.

12. The Manchester Guardian, June 19, 1916:

While everybody knows that the immense disbursements on the War have led to a greater demand for labour than it is possible to meet at present and that employers have done well, in spite of their difficulties, it is perhaps not generally known how greatly the profits of nearly all the public companies have increased during the last year. They have had to pay higher wages in many cases, though not in all, their materials have been much more costly, and their foreign trade has been hampered by restrictions, in furtherance of the policy of preventing the enemy from getting goods which he requires and which it is in our power to control. Many, however, have done a large business for Allied Governments as well as our own, especially in army equipment, and the demand for coal has been greater than our power of supplying it. All our production has commanded high prices, and profit margins have in most cases been very large. It is a way that chairmen of companies have to take big profits as being in the natural order of things, and dwell mostly on the difficulties which have prevented them from showing even better results. If this has obscured the real state of affairs it is desirable that the other side of the picture should be clearly presented, for it is impossible to understand the economic side of the War without a thorough comprehension of its industrial effects.

We give below a tabular statement of profits which have been declared this year, with the figures for two preceding years added so as to show their true significance. Some are gross and others net profits, but in this we have simply followed the methods adopted by the directors in their reports, that being in practice the only way of showing how the comparison stands. In some cases the capital has been increased during the three years, but the extent to which that has occurred does not affect the tables if they are regarded comprehensively. Some did very badly in the first few months of the war, and the profits they declared in 1915 look very small in comparison with those in the first column of the tables. In those cases the third column will act as a corrective, for in the main it shows the companies' normal earnings. It will be noticed that some of these were very small. Here and there the company was in the development stage, but as a rule it may be taken that the concern was not a very profitable one in peace times. Possibly it was over-capitalised, or over-weighted with debentures, or its plant was out of date, or it could not get sufficient business to make full use of its productive capacity. We shall not attempt the invidious task of singling out which come in these categories, but we call attention to the cases in which small pre-war profits have been converted into large ones since because they are really the most instructive of the whole series.

For very large increases upon profits which were already good the most notable are the shipping companies. Our list is typical rather than exhaustive. Some of the small concerns, with only one ship, or up to half a dozen, have done better relatively than several of the big lines, as they were more at liberty to take advantage of the big freight-rates which were going. We have not set these out, however, because it does not appear to be necessary. The dividends in virtually all cases have been substantial, and in some cases very large indeed. It would be useless, however, to show these in tables, as some of the leading companies use reserves greatly exceeding their nominal capital, and quite a number have devoted a larger proportion of their profits to strengthening their position than to the payment of dividends. In the case of the Moor line we are unable to give the amount of the profit reported last year, as the balance-sheets are not issued publicly, although we have been favoured with them occasionally.

Coal, iron, engineering companies and shipbuilding companies are bracketed together because so many of them are concerned in at least two of those fields of industry. As our table shows, they have had a great revival, many having been used by the Government, while all have felt the effect of the great demand for munitions. The miscellaneous list offers an interesting field of study, and the rubber and tea companies' results are in some respects more striking still. We have only given a selection of these, but they suffice to show that rubber and tea have been very profitable since the War began. An appeal was made some time ago with a view to the "young" rubber companies being relieved of the excess profits tax, but our list shows how unnecessary it was to make any special concession to the industry they represent. In the last two months a great many of the companies have indicated that they were setting some thousands of pounds aside for the tax.

Among the other concerns which have announced their appropriations to meet the excess profits tax the most notable one that we recall is the British Oil and Cake Mills Company, which expected to have to pay L225,000. The Nitrate Producers' Steamship Company is putting L200,000 to a reserve for the excess profits duty and income tax. Most of the big companies have provided for the tax before striking the profit balance, and as this is strictly correct it would hardly be fair to say that they have concealed part of their profits. The figures would have been more striking, however, if the gross sums had been given. As we read the White Star line's figures they indicate that the company has had to pay much more than the British Oil and Cake Mills Company, but the Cunard line has probably had to pay much less.

The amount payable in any given case is the excess over the pre-war standard, which is fixed by taking the best two of the three immediately preceding years. Speaking generally, the companies do not appear to have hurried in their payment of the tax. For the year ended March last the total yield was estimated at L6,000,000, but the actual sum received was only L140,000, and the L6,000,000 has not been got yet, the yield from April 1 to June 10 being only L3,556,000. A sharp increase is bound to come, however, in the course of the financial year. The Chancellor of the Exchequer expects to get L86,000,000 in excess profits tax and munitions levies by the end of March next, and he cannot possibly have made so enormous a mistake as the receipts to date would suggest if we did not know that thousands of firms have still to pay very considerable sums.

In the tables appended the years at the tops of columns are those in which the profits mentioned were announced. A large proportion of the results shown in the 1916 columns are for the year ended December last. Some, however, are for years which have ended since then, while a few, relating to companies which carry on business abroad, are for years which began soon after the outbreak of the War:--

SHIPPING

1916 1915 1914

L L L

British and African 94,388 64,464 41,357 Booth Line 328,127 225,267 154,828 China Mutual 591,005 286,725 381,729 Court 137,446 25,034 23,890 Cunard 1,579,170 1,286,948 1,187,831 Cairn 152,152 85,988 102,318 Elder, Dempster 349,444 326,122 307,605 Eagle Oil Transport 325,928 302,897 92,866 Elder 66,266 55,305 38,975 Field 71,393 11,881 -- France, Fenwick 179,100 64,900 76,800 Gulf 188,093 39,436 65,014 Houlder Bros 118,802 95,587 102,893 Indo-China 109,089 16,020 45,364 India Gen 65,738 41,974 118,379 King 102,319 17,426 90,392 Leyland (Fredk.) 1,441,690 620,839 589,810 Lamport & Holt 332,897 149,108 200,691 London & Northern 586,299 118,419 135,541 Mercantile 259,159 93,391 129,946 Moor 335,349 -- 254,000 Neptune 146,718 73,310 112,563 Nitrate Producers 381,599 134,826 125,990 Pool 601,338 118,000 -- Pyman 165,078 72,504 62,413 Royal Mail 808,731 98,232 436,470 Redcroft 117,953 13,125 21,396 Sutherland 295,220 74,841 41,779 White Star 1,968,285 887,548 1,121,268

COAL, IRON AND ENGINEERING

Albion Steam Coal 44,536 36,820 24,094 Arrol (Sir W.) & Co 119,060 49,756 51,096 Brown, Bayley's Steel 32,017 1,578 29,758 Barrow Hematite 119,377 51,518 104,664 British Aluminium 180,057 156,066 154,488 Beyer, Peacock 54,177 109,783 87,843 British Westinghouse 176,752 151,627 106,494 Brit.Ins. & Helsby 295,131 277,428 247,351 Bell Bros 145,360 45,969 128,736 Bessemer (Hy.) 55,348 35,826 23,308 Cammell, Laird 303,841 237,899 174,126 Cory (W.) and Son 453,136 215,328 313,906 Cargo Fleet 162,276 131,142 124,219 Callender's Cable 113,266 98,692 91,861 Carlton M. Colliery 188,545 128,413 177,025 Clayton & Shuttleworth 72,787 44,643 53,496 Consolidated Cambrian 185,139 140,097 147,648 Crossley Bros 65,337 15,347 42,517 D. Davis 200,127 215,744 217,970 Dorman, Long 404,524 237,579 257,863 Edinburgh Collier's 64,807 17,420 63,969 Fife Coal 224,058 89,866 -- Gt. West. Colliery 137,008 111,821 158,420 Hadfields 265,403 139,301 109,513 Henley's Tel 153,224 112,898 106,380 Howard & Bullough 136,152 32,766 163,066 Jessop (W.) & Sons 103,726 60,354 87,343 Knowles (A.) & Sons 47,199 18,329 29,140 Leyland Motors 252,107 85,037 -- Lysaght (John) 414,764 313,707 330,576 Locket's Merthyr Colleries 45,635 6,229 22,238 Met'n Carriage 372,140 321,091 365,739 Newton, Chambers 60,669 4,182 89,523 N. B. Locomotive 174,241 160,644 140,889 North's Nav. Coal 130,071 65,578 100,144 Parkgate Iron 107,344 66,643 85,169 Projectile 194,136 30,739 18,880 Powell Duffryn 438,799 422,204 364,421 Pease & Partners 435,772 248,216 385,975 Rhymney Iron 127,733 52,488 131,901 S. Durham Steel 239,868 150,257 302,955 Shelton 109,554 63,465 81,185 Stewarts & Lloyds 256,308 233,420 246,065 Swan, Hunter, etc 305,083 217,498 264,124 United Collieries 216,065 57,600 100,503 Wigan Coal, etc 143,288 44,829 138,118

MISCELLANEOUS

Angus (Geo.) & Co 54,461 43,574 32,123 Burmah Oil 1,413,170 1,411,279 1,363,389 Bradford Dyers 568,623 387,923 430,081 Bleachers' Association 416,394 197,835 423,416 Bryant and May 115,159 101,616 90,158 Broxburn Oil 46,729 22,252 57,046 British Cotton and Wool Dyers 93,524 42,297 9,290 Brunner, Mond 1,011,590 799,322 769,343 Bovril 168,796 137,584 119,813 Buttons 63,297 38,880 32,834 Borax Consolidated 205,825 195,449 235,285 Barlow & Jones 46,798 38,936 33,584 British Oil, etc., Mills 243,110 111,203 116,541 British and Argentine Meat 651,289 67,288 -- Curtis's & Harvey 143,830 77,754 48,117 Courtaulds 741,668 520,349 474,154 Calico Prin. (half yr.) 176,521 -- 55,495 E. Velvet, etc., Dyers 70,833 61,161 72,467 Fore St. Warehouse 48,957 28,597 -- Forestal Land 900,947 234,065 383,362 Fine Spinners 535,854 391,057 613,415 Gas Light & Coke 604,314 449,510 522,710 Hollins (W.) & Co 105,639 65,786 65,986 Henry (A. and S.) 249,713 104,098 122,528 Imperial Tobacco 3,699,891 3,533,360 3,354,476 Lever Bros 1,265,933 1,152,107 988,238 Linen Thread 257,418 188,773 189,142 Lennards 41,300 34,457 30,377 Lister and Co 133,874 94,403 151,458 Lyons (J.) & Co 278,293 276,403 353,303 Maypole Dairy 528,274 488,026 489,643 Mandleberg (J.) 74,506 52,049 57,964 Pumpherston Oil 134,927 74,010 140,025 Rylands & Sons (half yr.) 120,032 55,179 -- Rotherham (Jer.) 104,925 74,638 59,692 Salt Union 140,524 89,443 82,791 Sears (J.) & Co 82,070 65,032 57,061 Stead & Simpson 59,898 32,762 30,357 Samnuggur Jute 299,829 44,307 86,574 Spillers & Bakers 217,416 367,866 89,351 United Alkali 341,986 217,081 193,604 Winterbottom Book Cloth 171,191 119,795 165,213 Webley & Scott 61,277 16,376 9,511 Whiteaway, Laidlaw 131,577 107,952 129,790 Watson (Joseph) 122,001 89,290 103,999 Young's Paraffin 47,953 24,139 80,152

RUBBER, &c. 1916 1915 1914 L L L Anglo-Malay 121,224 76,931 104,583 Assam-Dooars 51,674 22,269 -- Amalgamated Tea 157,818 98,176 78,787 Batu Tiga 56,293 22,315 24,762 Bukit Sembawang 33,989 14,344 6,090 Consolidated Tea 479,815 289,262 247,633 Chersonese 59,602 35,019 29,081 Ceylon Tea 163,899 108,300 93,900 Damansara 48,680 30,580 29,081 Eastern Produce 126,406 71,724 69,004 Grand Central 248,201 132,019 87,554 Highlands & Lowlands 108,343 75,425 79,079 Jorehaut Tea, 64,508 43,204 34,088 Jhanzie Tea 35,881 17,286 15,113 Klanang 37,918 20,458 24,257 Kuala Selangor 47,748 42,013 32,798 Kanan Devan 208,612 120,119 106,909 Linggi 125,739 78,899 83,746 Lunuva 32,994 12,599 12,602 Malacca 252,006 144,224 131,156 Nuwara Eliya 49,915 21,921 -- Nordanal 39,658 36,686 49,344 Panawatte Tea 38,167 23,833 -- Rub. Est., Johore 42,703 22,541 10,931 Rani Travancore 63,791 35,349 32,259 Singlo Tea 68,857 36,166 31,449 Sungei Way 38,532 36,533 25,624 Straits 157,678 164,750 185,426 Sungei Kapar 59,966 39,426 42,364 Selangor 55,457 58,007 41,940 Seremban 43,410 24,198 22,471 Sunnygama 63,688 43,142 31,931

13. The New Witness, June 22, 1916:

The Tenth Ordinary General Meeting of the Forestal Land, Timber, and Railways Co. (Ltd.) was held on Friday last, at Winchester House, E.C., Baron Emile B. d'Erlanger (chairman of the company), presiding.

The chairman said that the share capital remained unaltered, and the debenture debt had only been decreased by the yearly amortisation. No less than L143,600 had been added to the depreciation account, making it L634,170. Credit balances had swollen by the sum of L175,589. The profit on the year was L900,947, as against L234,064 last year. On the credit side, properties stood at L4,405,917, and had increased by the new properties acquired. The live stock stood at L34,000 less than last year, due to a smaller stock of "Invernada" cattle. The stocks of extract and felled timber had risen by L115,000, principally owing to a larger stock of felled timber. Debit balances had risen to L156,000. In the profit and loss account the trading profit was L1,281,299, as compared with L614,879 last year, and, after deducting London charges, debenture interest, depreciation, and legal reserve, there was left a profit of L900,947.

14. The Westminster Gazette, July 15, 1916:

The accounts of the W. and C. T. Jones Steamship Company, Limited, of Cardiff, for the year ended June 30, show that, with a fleet of thirteen steamers, L524,855 profit has been earned, representing 187 per cent on the capital of L280,000.

The previous year's earnings were L87,105.

A dividend of 15 per cent, making, with 10 per cent interim dividend, 25 per cent for the year, free of income tax, is declared.

15. The New Statesman, July 1, 1916:

The prolonged debate in the House of Commons on the Excess Profits Tax ended on Monday in a vote which found Mr. McKenna's critics in a small though substantial minority. The point actually at issue was not very simple, and in spite of repeated explanations several of the most persistent speakers never grasped it. The demand was that all "controlled establishments" should be exempt from the excess profits tax in consideration of the patriotic services they were rendering to their country and of the "bargain" alleged to have been concluded with the Ministry of Munitions whereby any profits they may make in excess of 20 per cent above their normal profits are in any event taken by the State. This meant, of course, that a controlled firm which made a profit of L50,000 in 1914, and of L60,000 (due to war contracts) in 1916, would retain the whole of their excess profits without reduction. Mr. McKenna argued that such firms, having the advantages of practically compulsory labour and freedom from Trade Union restrictions, ought, at any rate, not to be let off more lightly than uncontrolled firms. It is amazing that such a proposition should have to be stated at all.

The point of view of the ordinary member of the public undoubtedly is that excess profits on the making of munitions simply ought not to exist. If engineering firms are permitted to maintain their old standard of profit and dividend (with fair arrangements, of course, for new capital and depreciation), they ought to be more than satisfied. Great heat was developed on the debate by the representatives of various capitalist interests, notably Sir Arthur Markham, Mr. J. M. Henderson, Sir Croydon Marks, and Sir Alfred Mond; and some of them were not even ashamed to hint that if their demands were not agreed to there might be a diminution of output. At a moment when tens of thousands of men are giving up their whole incomes as well as their savings, in order to fight for their country, it is impossible to imagine any spectacle more unedifying for the wage-earning class than that of these malcontent capitalist legislators angrily fighting for their extra war-profits. When one remembers that it was these same gentlemen who were so enthusiastic for compelling younger and poorer men to sacrifice everything they possess, it is hard to find words to say what ought to be said of them. We hope, at all events, that the names of those who voted against the Government on the division will not be allowed to be forgotten in the constituencies.

16. Pall Mall Gazette, January 31, 1916:

From Our Own Correspondent.

PARIS, Saturday.

The trouble that has been brewing for months past at the Central Markets has now come to a head. A well-known dealer was suspended by the Prefect of Police; the Home Office thought this insufficient and revoked his licence; and there is now talk of a prosecution.

The Central Markets are not a place which the habitual Parisian cares to venture into. Apart from its own peculiar and particularly pungent odours, the markets are peopled with a class of stallkeeper who do not exactly keep their tongue in their pocket, as the French say. They have, in fact, a flow of language, and it requires a brave man to make a stand against it--and all the brave men are at the front just now.

But the Central Markets not only have a language of their own; they have ways and methods of dealing that require long years of acquaintance to fathom, so only experts venture to make head or tail of them.

All this means that between the Central Markets, at the depository, and most of all that Paris wants to eat, and the actual consumer as represented by the ordinary housewife starting out on her daily round of shopping, there move and live a host of intermediaries. Large as their number is, they cannot compare with the middlemen who squeeze in between the Central Markets and the actual grower, breeder, or producer.

With so many hands for produce to pass through, each one eager to grab all that it can for itself before it passes the stuff along, it is small wonder that prices grow, not taking into account the burden of taxes and other charges the goods have to bear on their journey from the farm to the household.

ARMY OF INSPECTORS

The police have an army of inspectors for watching and superintending the work of the markets. The rules drawn up for their regulation would more than fill an old-fashioned three-volume novel, and each one provides for penalties severer and stricter than the other. Yet the profitable game of rigging the market and everything connected with it is in full swing, and no one is more fooled than the police, unless it be the public.

Since the war broke out, the State, the city, and the public alike, backed up by the small retail trader, have done their best to get even with the Central Markets. The more they try to put things right the worse they seem to get. Prices appear to ease for a brief space, but they soon become inflated once more. Or, if they do not, the particular commodity concerned simply disappears in some mysterious fashion until the "powers that be" submit to the inevitable, and shut their eyes to scheming they are helpless to prevent.

AS MUCH FOOD AS USUAL

The worst of it is that statistics can always be produced to show that the rise in prices is purely and simply the outcome of a falling off in supplies. Arrivals of fruits, vegetables, and fish in the last quarter of the past year were exactly half the average supply of an ordinary year; eggs were two-thirds below the proper figures, meat some 4,000 tons short, butter six tons, cheeses only a ton.

Of course, the population of the city has diminished also to a certain extent, but not so much as might be expected considering that there is practically no single family that has not one or more members at the front.

They have been replaced by refugees, sick and wounded soldiers, huge war administrations of one kind and another. Paris consequently wants almost as much feeding as in ordinary times, not taking any account of the fact that portions of both the British and French Armies still buy provisions on the Paris markets.

Notwithstanding the legitimate reasons that can be put forward to explain the upward trend of prices, the authorities know well enough that all is not so innocent and above board as it appears. One or two more glaring instances than usual of manipulation have put them on the right track at last. Other steps may also be expected, for public opinion has got to the point that either the "inside ring" must be broken up or popular resentment will take a form that no Government can afford to overlook or affect to ignore.

17. The Daily News, August 16, 1915:

A YEAR OF ECONOMIC WAR

The Vorwaerts, without boasting, as Dr. Helfferich has been doing, of Germany's financial invincibility, yet sees cause for satisfaction in the economic condition of the Empire after twelve months of war.

The upheaval of the first week of war was indeed serious, and the grim spectre of unemployment was in the air. But it was soon laid.

The best results were obtained in the sphere of unemployment. At the beginning of the war it was about 22-1/2 per cent, in October only 10.9 per cent, and in May it had further sunk to 2.9 per cent. The figures for June were 2.6 per cent as against 2.5 per cent in the previous June.... Similarly the daily output of coal of the Rhenish Westphalian Coal Syndicate, which in July, 1914, reached 327,974 tons, sank in August to 170,816 tons, in September rose again to 211,995, and in October to 223,760, the figures for that month being 60 per cent of those of the previous October.... In later months, in spite of the calling up of more and more workers, it has only been 25 to 27 per cent below the normal.

The writer tells the same story of the iron and textile industries, and traces the good results to the fact that the supplies of raw materials were far greater than had been thought. For instance, there were about 700,000 bales of cotton more than are needed in a normal year. Besides which the stores of conquered countries were at the disposal of the conquerors. The only trades which really suffered were those in luxuries.

The article concludes thus:

The German trade has survived the shocks of the first year of war better than the most convinced optimist could have hoped, and better than the organisation of other belligerents. All fears of immediate inevitable industrial collapse which haunted us at the beginning of the war have been dissipated. Instead of this we meet in all industrial circles with the consciousness [often much exaggerated] that "We can endure."

The words in brackets are significant.

18. Pall Mall Gazette, November 10, 1916:

LIVING ON WAR

KRUPPS' PROFIT JUMPS FROM 1-1/2 MILLIONS TO 4-1/2

AMSTERDAM, Tuesday Night.

An Essen telegram states that the clear profit last year of Krupps amounted to 86,400,000 marks (L4,320,000), as compared with a profit of 33,900,000 marks (L1,695,000) in the preceding year. A dividend of 12 per cent has been distributed.--Reuter.

19. Pall Mall Gazette:

GERMAN DIVIDENDS

ECONOMIC POSITION OF SOME OF HER COMPANIES

The 1914 dividends of over sixty limited companies, nearly all German, and the remainder Austrian, show that in the case of sixteen companies the dividends amounted to 20 per cent or over, the average being 25-3/16 per cent. These companies (says the Morning Post) are mainly engaged in the production of leather, dynamite, explosives, india-rubber, arms, ammunition, and powder. In one case, that of an explosives company in Hamburg, the dividend attained 40 per cent.

Germany is still barring the Swiss frontier, and for the last five days the German post arrived at Berne very late or not at all, thus pointing to great activity in military matters beyond the German-Swiss frontier.

As further proof, if proof were needed, of the sufficiency of Germany's food supplies, it is pointed out that she now offers to send to Switzerland large quantities of potatoes.

20. The Times, July 5, 1916:

WAR PROFIT-MONGERS IN RUSSIA

From our Correspondent.

PETROGRAD, July 2.

The clergy will to-morrow publicly anathematise the "freebooters of the rear," who are amassing huge fortunes at the expense of the public.

21. The Westminster Gazette, Aug. 28, 1916:

GERMAN WAR SCANDALS

700 PER CENT PROFIT FOR EAST PRUSSIAN LANDOWNERS

ZURICH, Sunday.

Details of several recent corrupt affairs which have come to light in Germany have reached Switzerland.

At Mainz a timber merchant was arrested for bribing army officers to secure contracts for his firm. The official investigation revealed that he had paid a total of L50,000 in bribes to army officers. Some of the individual bribes were as high as L2,500. This timber merchant, who was almost a poor man before the war, has accumulated in two years a fortune which compelled him to pay income-tax on an income of L25,000 per annum.

Another scandalous affair was discovered in Herr von Batocki's new Imperial Food Department. One of his officials, Bernot by name, was bribed by numerous East Prussian landowners to have the crops from their estates bought by the Government at exorbitant prices. Bernot pocketed some L15,000, and the landowners in question sold their wheat at a profit of 700 per cent.--Wireless Press.

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