The enemies of Germany, though they have hitherto suffered an almost unbroken series of reverses in the war, have already thoroughly thrashed out the subject as to what the world will look like when Germany is conquered. In German quarters the press has likewise painted the future, but the following lines are not intended to increase the row of fancy portraits, but merely to throw light on what is new in the demands conceived.

My representations are founded on special information, and I deem it best to make them now, when the most fantastic descriptions of the all-absorbing desire of conquest on the part of Germany have circulated in the press of the entire world.

Among other absurdities it has been declared that Germany intends to claim a fourth of France, making this dismembered country a vassal State, bound to the triumphal car of the conqueror by the very heaviest chains. It is incredible, but true, that such a statement has been made in the press by a Frenchman, formerly President of the Council.

In direct opposition to the fictitious demands of the Germans, I can advance a proposition which may sound paradoxical, viz., that the leading men in Germany, the Emperor and his advisers, after bringing the war to a victorious issue, will seriously seek expedients to avoid conquests, so far as this is compatible with the indispensable demands of order and stability for Europe.

First, as regards France. The entire world, as also the Germans, are moved to pity by her fate. Germany has never entertained any other wish than to be at peace with her western frontier. A considerable portion of France is now laid waste, and in a few weeks millions of soldiers will have been poured into still wider portions of this beautiful country. On what are the inhabitants of these French provinces to exist when the German and French armies have requisitioned everything eatable? Germany cannot feed the inhabitants of the French provinces occupied, nor can the Belgians do so, I imagine, for the provisions of Germany are simply sufficient for their own needs, England preventing any new supply on any large scale.

This is a totally new state of things in comparison with 1870, when Germany was still an agrarian country and had, moreover, a free supply on all her frontiers.

Can the French Government allow a considerable portion of their own population actually to starve, or be obliged to emigrate to other parts of France, there to live the life of nomads at the expense of England, while the deserted provinces are given over to desolation?

The idea prevails here that the French will compel their Government to enter on and conclude a separate treaty of peace when the fatal consequences of the war begin to assume this awful guise. England does not appear to have considered that this would be the result of her system of blockade.

The German conditions of peace as regards France will be governed by two principal factors with respect to their chief issues.

The first is the complete unanimity of the Emperor and the Chancellor that no population, not speaking German, will be incorporated in the German Empire, or obtain representation in the Diet. Germany already has sufficient trouble with the foreign element now present in the Diet. Consequently there can be no question of any considerable acquisition of territory from France, but the demands of Germany simply extend to the iron-ore fields of Lorraine, which are certainly of considerable value. For France these mining fields are of far less consideration than for Germany, whose immense iron trade is far more in need of the iron mines.

The second factor is that the Germans, owing to the strong public opinion, will never consent to Belgium regaining her liberty. The Chancellor of the Empire has, as long as it was possible, been opposed to the annexation of Belgium, having preferred, even during hostilities, to have re-established the Belgian Kingdom. It is significant that the military authorities have prohibited the German press from discussing the question of the future of Belgium. It is evident that there has prevailed a wish to leave the question open in order to insure a solution offering various possibilities. But subsequent to the discovery of the Anglo-Belgian plot, as previously stated, all idea of reinstating Belgium has been discarded.

The annexation of Belgium, however, makes it possible to grant France less stringent conditions. So long as Belgium—under some form of self-government—is under German sway there is no hope of revenge of France, and the conviction prevails here that after this war France will abstain from her dreams of aggrandizement and become pacific. Germany can then make reductions in the burdens laid on her people for military service by land.

To arrange the position of Belgium in relation to Germany will be a very interesting problem for German policy.

It is obvious that the annexation of Belgium cannot be defended from the point of view of the principle of nationality. The Belgians—half of them French, half of them Flemish—undoubtedly deem themselves but one nation. As a mitigating circumstance in favor of the annexation it is urged—above and beyond the intrigues carried on by Belgium with the English—that Belgium, in days of yore, for a long time formed a portion of the German Empire, and that the inhabitants of the little country, to a considerable degree, gain their livelihood by its being a land of transit for German products. Nationally, the annexation is not to be defended, but geographically, economically, and from a military point of view it is comprehensible.

At the east front of the central powers very different conditions prevail. Austria has no desire to make the conquest of any territory; indeed, just the contrary, would probably be willing to cede a portion of Galicia in favor of new States. Germany has not the slightest inclination to incorporate new portions of Slav or Lettish regions. Both Germans and Austrians wish to establish free buffer States between themselves and the great Russian Empire.

Not even the Baltic provinces, where Germans hold almost the same position as the Swedes in Finland, form an object for the German desire of conquest, but her wish is to make them, as also Finland, an independent State. Furthermore, the Kingdom of Poland and a Kingdom of Ukraine would be the outcome of decisive victories for the central powers.

What Germany would demand of these new States, whose very existence was the outcome of her success at arms, would simply be an economical organization in common with the German Empire, an enormous central European "Zollverein" ("Customs Union") with Germany at its heart. It is only such a union, in the opinion of leading German statesmen, which could hold the United States of North America at bay, and after this present war, moreover, the world would only have to take into account two first-class powers, viz., Germany and the United States of America.

A commencement of this new economical connection is being made by the negotiations entered on by representatives of Austria-Hungary and Germany concerning the proposed formation of a Customs Union. Since this union would include 120,000,000 individuals, it must be evident what an immense attraction it must exert on the surrounding smaller nations. Switzerland and Holland can scarcely escape this attraction, and the Scandinavian countries, it is said, would probably find it to their advantage, together with a liberated Finland, to form a Northern Customs Union, which later, on an independent basis, could enter in close union with the vast "Zollverein" of Central Europe.

This "Zollverein" would then include about 175,000,000 individuals. The adhesion of Italy to the vast union would not be inconceivable, and then the combination of the United States of Europe, founded on a voluntary commercial union, would be approaching its realization.

Such a commercial union, embracing various peoples, could only lead to moderation in foreign politics, and would be the best guarantee for the peace of the universe. A brisk interchange of commodities, a fruitful interchange of cultural ideas would result from such a union, connecting the polar seas with the Mediterranean, and the Netherlands with the Steppes of Southern Russia.

All States participating in this union would gain thereby. But one European country would be the loser, Great Britain, the land of promise for the middleman; that, according to German comprehension, at present gains a living by skimming the cream from the trade industry of other nations by facilitating the exchange of goods, and making profits by being the banking centre of the world.

The Germans declare that there is no reason for such a middleman's existence in our day. The banking system is now so developed in all civilized lands that, for example Sweden can remit direct to Australia or the Argentine for goods obtained thence, instead of making payment via London and there rate, by raising the exchange for sovereigns to an unnatural height, so that, as matter of fact, England levies a tax on all international interchange of commodities.

In opposition to this glorious vision of the days to come, which the Germans wish to realize by their victories in war, there is the alluring prospect of the Allies that by their victory they will deal a deathblow to German militarism. While the English, with their 200,000 troops, are good enough to promise no conquest of German territory—what says Russia to this?—at the close of the war, in the opinion of the Britons, there would still remain 65,000,000 Germans right in the centre of Europe, organized as a kingdom burdened with a war indemnity to a couple of tens of milliards in marks.

This nation, however, strengthened by 15,000,000 Germans in Austria, would be the greatest bearers of culture in the wide world—the nation with the best technical equipment of all others, glowing with ambition, with military training second to none, and gifted with an immense rate of increase as regards population. This nation would be forced to lay down her arms, lying as it does between the overbearing gigantic realm in the east and the warlike French to the west. The idea is incomprehensible. The universe would behold a competition in armaments such as it had never seen.

A victorious Germany, on the other hand, would become less and less military, since she would not need to arm herself to such an extent as now. She is already chiefly an industrial country. Her desire is to be wealthy, and wealth invariably smothers military instincts. Germany has set up far greater ideals as regards social developments than other countries, and all she asks is to be left in peace calmly to carry out these plans in the future. German militarism can only be conquered by the victory being on her side, since she has no thought of military supremacy, but simply of founding a new economical organization in Europe.

GUSTAF SIOESTEEN.



ADDRESS TO KING ALBERT OF BELGIUM

By EMIL VERHAEREN.

Translation by Florence Simmonds.

[From King Albert's Book.]

Sire: This request to pay my respectful homage to you has given me the first real pleasure I have been permitted to feel since the good days of Liege. At this moment you are the one King in the world whose subjects, without exception, unite in loving and admiring him with all the strength of their souls. This unique fate is yours, Sire. No leader of men on earth has had it in the same degree as you.

In spite of the immensity of the sorrow surrounding you, I think you have a right to rejoice, and the more so as your consort, her Majesty the Queen, shares this rare privilege with you.

Sire, your name will be great throughout the ages to come. You are in such perfect sympathy with your people that you will always be their symbol. Their courage, their tenacity, their stifled grief, their pride, their future greatness, their immortality all live in you. Our hearts are yours to their very depths. Being yourself, you are all of us. And this you will remain.

Later on, when you return to your recaptured and glorious Belgium, you will only have to say the word, Sire, and all disputes will lose their bitterness and all antagonisms fade away. After being our strength and defender, you will become our peacemaker and reconciler. With deepest respect,

EMIL VERHAEREN.



Foreshadowing a New Phase of War

Financing the Allies and Small Nations Preparing for War

By Lloyd George, British Chancellor of the Exchequer

That there are "also other States preparing for war," and that financial arrangements had been made for their participation against Germany by the allied Governments of Great Britain, France, and Russia; moreover, that Russia would be enabled within a few months to export considerable quantities of her grain and do her own financing—this statement preceded the bombardment of the forts in the Dardanelles, probably to clear the way for Russia's commerce—are the outstanding features of the speech by Lloyd George presented below, foreshadowing a new phase in the war. The speech was made in the House of Commons on Feb. 15, 1915, to explain the results of the financial conference between the allied powers to unite their monetary resources, held in Paris during the week of Feb. 1. It may be regarded as one of the most momentous utterances of the war.

PARLIAMENTARY REPORT.

The Chancellor of the Exchequer, (Mr. Lloyd George,) who was called upon by the Speaker, said: I shall do my best to conform to the announcement of the Prime Minister that the statement I have to make about the financial conference in Paris shall be a brief one, but I am afraid my right honorable friend assumed that we are all endowed with the extraordinary gift of compression which he himself possesses. [Laughter.] The arrangements that were made between the three Ministers for recommendation to their respective Governments commit us to heavy engagements, and it is, therefore, important I should report them in detail to the House, and find some reason why we should undertake such liabilities.

This is the most expensive war which has ever been waged in material, in men, and in money. The conference in Paris was mostly concerned with money. For the year ending Dec. 31 next the aggregate expenditure of the Allies will not be far short of L2,000,000,000. The British Empire will be spending considerably more than either of our two great allies—probably up to L100,000,000 to L150,000,000 more than the highest figure to be spent by the other two great allies. We have created a new army; we have to maintain a huge navy. We are paying liberal separation allowances. We have to bring troops from the ends of the earth; we have to wage war not merely in Europe, but in Asia, in North, East, and South Africa. I must say just a few words as to the relative position of the three great countries which led us to make the arrangements on financial matters which we recommend to our respective Governments. Britain and France are two of the richest countries in the world. In fact, they are the great bankers of the world. We could pay for our huge expenditure on the war for five years, allowing a substantial sum for depreciation, out of the proceeds of our investments abroad. France could carry on the war for two or three years at least out of the proceeds of her investments abroad, and both countries would still have something to spare to advance to their allies. This is a most important consideration, for at the present moment the Allies are fighting the whole of the mobilized strength of Germany, with perhaps less than one-third of their own strength. The problem of the war to the Allies is to bring the remaining two-thirds of their resources and strength into the fighting line at the earliest possible moment. This is largely, though by no means entirely, a question of finance.

Russia is in a different position from either Britain or France. She is a prodigiously rich country in natural resources—about the richest country in the world in natural resources. Food, raw material—she produces practically every commodity. She has a great and growing population, a virile and industrious people. Her resources are overflowing and she has labor to develop them in abundance. By a stroke of the pen Russia has since the war began enormously increased her resources by suppressing the sale of all alcoholic liquors. [Cheers.] It can hardly be realized that by that means alone she has increased the productivity of her labor by something between 30 and 50 per cent., just as if she had added millions of laborers to the labor reserves of Russia without even increasing the expense of maintaining them, and whatever the devastation of the country may be Russia has more than anticipated its wastage by that great act of national heroism and sacrifice. [Cheers.] The great difficulty with Russia is that, although she has great natural resources, she has not yet been able to command the capital within her own dominions to develop those resources even during the times of peace. In time of war she has additional difficulties. She cannot sell her commodities for several reasons. One is that a good deal of what she depends upon for raising capital abroad will be absorbed by the exigencies of the war in her own country. Beyond that the yield of her minerals will not be quite as great, because the labor will be absorbed in her armies.

There is not the same access to her markets. She has difficulty in exporting her goods, and in addition to that her purchases abroad are enormously increased in consequence of the war. Russia, therefore, has special difficulty in the matter of financing outside purchases for the war. Those are some of the difficulties with which we were confronted.

France has also special difficulties. I am not sure that we quite realize the strain put upon that gallant country [cheers] up to the present moment. For the moment she bears far and away the greatest strain of the war in proportion to her resources. She has the largest proportion of her men under arms. The enemy are in occupation of parts of her richest territory. They are within fifty-five miles of her capital, exactly as if we had a huge German army at Oxford. It is only a few months since the bankers of Paris could hear the sound of the enemy's guns from their counting houses, and they can hear the same sound now, some of them, from their country houses. In those circumstances the money markets of a country are not at their very best. That has been one of the difficulties with which France has been confronted in raising vast sums of money to carry on the war and helping to finance the allied States.

There is a wonderful confidence, notwithstanding these facts, possessing the whole nation. [Cheers.] Nothing strikes the visitor to Paris more than that. There is a calm, a serene confidence, which is supposed to be incompatible with the temperament of the Celt by those who do do not know it. [Laughter.] There is a general assurance that the Germans have lost their tide, and that now the German armies have as remote a chance of crushing France as they have of overrunning the planet Mars. [Cheers.] That is the feeling which pervades every class of the community, and that is reflected in the money market there. The difficulties of France in that respect are passing away, and the arrangement that has now been made in France for the purpose of raising sums of money to promote their military purposes will, I have not the faintest doubt, be crowned with the completest success. [Cheers.]

But we have a number of small States which are compelled to look to the greater countries in alliance for financial support. There is Belgium, which until recently was a very rich country, devastated, desolate, and almost entirely in the hands of the enemy, with an army and a civil government to maintain, but with no revenue. We have to see that she does not suffer [cheers] until the period of restoration comes to her, and compensation. [Cheers.] Then there is Serbia, with the population of Ireland—a people of peasants maintaining an army of 500,000 and fighting her third great war within two years, and fighting that with great resource, great courage, and bravery. [Cheers.] But she had no reserve of wealth, and now no exports with which she can purchase munitions of war outside, and she has hardly any manufactures of her own. That is the position as far as the smaller States are concerned.

There are also other States preparing for war, and it is obviously our interest that they should be well equipped for that task. They can only borrow in the French and English markets.

But we had our own special difficulties, and I think I ought to mention those. Two-thirds of our food supplies are purchased abroad. The enormous quantities of raw materials for our manufactures and our industries are largely absorbed in war equipment, and our ships in war transport. We cannot pay as usual in exports, freights, and services; our savings for the moment are not what they would be in the case of peace. We cannot, therefore, pay for our imports in that way. We have to purchase abroad. We have to increase our purchases abroad for war purposes. In addition to that we have to create enormous credits to enable other countries to do the same thing. The balance is, therefore, heavily against us for the first time. There is no danger, but in a conference of the kind we had at Paris I could not overlook the fact that it was necessary for us to exercise great vigilance in regard to our gold.

These were the complex problems we had to discuss and adjust, and we had to determine how we could most effectually mobilize the financial resources of the Allies so as to be of the greatest help to the common cause. For the moment undoubtedly ours is still the best market in the world. An alliance in a great war to be effective needs that each country must bring all its resources, whatever they are, into the common stock. An alliance for war cannot be conducted on limited liability principles. If one country in the alliance has more trained and armed men ready with guns, rifles, and ammunition than another she must bring them all up against the common enemy, without regard to the fact that the others cannot for the moment make a similar contribution. But it is equally true that the same principle applies to the country with the larger navy or the country with the greater resources in capital and credit. They must be made available to the utmost for the purpose of the alliance, whether the other countries make a similar contribution or not. That is the principle upon which the conference determined to recommend to their respective Governments a mobilization of our financial resources for the war.

The first practical suggestion we had to consider was the suggestion that has been debated very considerably in the press—the suggestion of a joint loan. We discussed that very fully and we came to the conclusion that it was the very worst way of utilizing our resources. It would have frightened every Bourse and attracted none. It would have made the worst of every national credit and the best of none. Would the interest paid have been the interest upon which we could raise money, the rate at which France could have raised money, or the rate at which Russia could raise money? If we paid a high rate of interest we could never raise more money at low rates. If instead of raising L350,000,000 a few weeks ago for our own purposes we had floated a great joint loan of L1,000,000,000, the House can very well imagine what the result would have been. We decided after a good deal of discussion and reflection that each country should raise money for its own needs within its own markets in so far as their conditions allowed, but that if help were needed by any country for outside purchases then those who could best afford to render assistance for the time being should do so.

There was only one exception which we decided to recommend, and that was in the case of borrowings by small States. We decided that each of the great allied countries should contribute a portion of every loan made to the small States who were either in with us now or prepared to come in later on, that the responsibility should be divided between the three countries, and that at an opportune moment a joint loan should be floated to cover the advances either already made, or to be made, to these countries outside the three great allied countries. That was the only exception we made in respect of joint loans. Up to the present very considerable advances have been made by Russia, by France, and by ourselves to other countries. It is proposed that, if there is an opportune moment on the market, these should be consolidated at some time or other into one loan, that they should be placed upon the markets of Russia, France, and Great Britain, but that the liability shall be divided into three equal parts.

With regard to Russia, we have already advanced L32,000,000 for purchases here and elsewhere outside the Russian Empire. Russia has also shipped L8,000,000 of gold to this country, so that we have established credits in this country for Russia to the extent of L40,000,000 already. France has also made advances in respect of purchases in that country. Russia estimates that she will still require to establish considerable credits for purchases made outside her own country between now and the end of the year. I am not sure for the moment that it would be desirable for me to give the exact figure; I think it would be better not, because it would give an idea of the extent to which purchases are to be made outside by Russia. But for that purpose she must borrow. The amount of her borrowing depends upon what Russia can spare of her produce to sell in outside markets and also on the access to those markets.

If Russia is able within the course of the next few weeks or few months to export a considerable quantity of her grain, as I hope she will be, as in fact we have made arrangements that she should, [cheers,] then there will not be the same need to borrow for purchases either in this country or outside, because she can do her own financing to that extent.

The two Governments decided to raise the first L50,000,000 in equal sums on the French and British markets respectively. That will satisfy Russian requirements for a considerable time. As to further advances, the allied countries will consider when the time arrives how the money should be raised according to the position of the money markets at that time. I have said that we gave a guarantee to Russia that she need not hesitate a moment in giving her orders for any purchases which are necessary for the war on account of fear of experiencing any difficulty in the matter of raising money for payments. We confidently anticipate that by the time these first advances will have been exhausted the military position will have distinctly improved both in France and in Russia.

I may say that Treasury bills to the extent of L10,000,000 on the credit of Russia have been issued within the last few days. At 12 o'clock today the list closed, and the House will be very glad to hear that the amount was not merely subscribed but oversubscribed by the market, because this country is not quite as accustomed to Russian securities as France, and, therefore, it was an experiment. I think it is a very good omen for our relations, not merely during the war, but for our relations with Russia after the war, that the first great loan of that kind on Russian credit in the market has been such a complete success.

Now we have to consider the position of this country with regard to the possibility of our gold flitting in the event of very great credits being established in this country. The position of the three great allied countries as to gold is exceptionally strong. Russia and France have accumulated great reserves which have been barely touched so far during the war. I do not think the French reserve has been touched at all, or has been used in the slightest degree, and I think as far as the Russian reserve is concerned it has only been reduced by the transfer of L8,000,000 of gold from Russia to this country. Our accumulation of gold is larger than it has ever been in the history of this country. It has increased enormously since the commencement of the war. It is not nearly as large as that of Russia, France, or Germany, but it must be borne in mind that there is this distinction in our favor; up to the present we have had no considerable paper currency, and this is the great free market for the gold of the world. The quantity imported every year of, what shall I call it, raw gold, comes to something like L50,000,000, and here I am excluding what comes here by exchanges. The collapse of the rebellion in South Africa assures us of a large and steady supply from that country, and, therefore, there is no real need for any apprehension.

But still it would not have been prudent for us to have overlooked certain possibilities. I have already pointed out some of them—the diminution of exports, the increase of our imports, the absorption of our transports for war purposes, large credits established for our own and other countries, and a diminution in our savings for investments abroad. There is just a possibility that this might have the effect of inducing the export of gold to other countries. We therefore have to husband our gold and take care lest it should take wings and swarm to any other hive. We therefore made arrangements at this conference whereby, if our stock of gold were to diminish beyond a certain point—that is a fairly high point—the Banks of France and Russia should come to our assistance.

We have also made arrangements whereby France should have access to our markets for Treasury bills issued in francs. We have also initiated arrangements which we hope will help to restore the exchanges in respect of bills held in this country against Russian merchants, who, owing to the present difficulties of exchange, cannot discharge their liabilities in this country. They are quite ready and eager to pay, they have the money to pay, but, owing to difficulties of exchange, they cannot pay bills owing in this country. We therefore propose to accept Russian Treasury bills against these bills of exchange due from Russian merchants, Russia collecting the debts in rubles in her own country and giving us the Treasury bills in exchange. We hope that will assist very materially in the working of the exchanges. It will be very helpful to business between the two countries, and incidentally it will be very helpful to Russia herself in raising money in her own country for the purpose of financing the war.

We also received an undertaking from the Russian Government in return for the advances which we were prepared to make, that Russia would facilitate the export of Russian produce of every kind that may be required by the allied countries. This, I believe, will be one of the most fruitful parts of the arrangements entered into. An arrangement has also been made about the purchases by the allied countries in the neutral countries. There was a good deal of confusion. We were all buying in practically the same countries; we were buying against each other; we were putting up prices; it ended not merely in confusion, but I am afraid in a good deal of extravagance, because we were increasing prices against each other. It was very necessary that there should be some working arrangement that would eliminate this element of competition and enable us to co-ordinate, as it were, these orders. There will be less delay, there will be much more efficiency, and we shall avoid a good deal of the extravagance which was inevitable owing to the competition between the three countries.

I have done my best to summarize very briefly the arrangements which have been entered into, and I would only like to say this in conclusion. After six months of negotiation by the cable and three days of conferring face to face we realized that better results were achieved by means of a few hours of businesslike discussion by men anxious to come to a workable arrangement than by reams of correspondence. Misconceptions and misunderstandings were cleared away in a second which otherwise might take weeks to ferment into mischief, and it was our conclusion that these conferences might with profit to the cause of the Allies be extended to other spheres of co-operation. [Cheers.]



Britain's Unsheathed Sword

By H.H. Asquith, England's Prime Minister

Stating the estimated costs of the war to Great Britain, outlining the operations of the French and British allied fleets in the Dardanelles, declaring the Allies' position in retaliation for the German "war zone" decree against Great Britain, and reaffirming the chief terms of peace, stated in his Guildhall speech of last November, on which alone England would consent to sheathe the sword, the following speech, delivered in the House of Commons on March 1, 1915, by Prime Minister Asquith, is one of the most important of the war.

In Committee of Supply.

Mr. Asquith, who was loudly cheered on rising, moved the supplementary vote of credit of L37,000,000 to meet the expenditure on naval and military operations and other expenditure arising out of the war during the year 1914-1915. He said:

The first of the two votes which appear upon the paper, the one which has just been read out, provides only for the financial year now expiring, and is a supplementary vote of credit. The vote that follows is a vote of credit for the financial year 1915-1916. I think it will probably be convenient if in submitting the first vote to the committee I make a general statement covering the whole matter. I may remind the committee that on Aug. 6 last year the House voted L100,000,000 in the first vote of credit, and that on Nov. 15 the House passed a supplementary vote of credit for L225,000,000, thus sanctioning total votes of credit for the now expiring financial year of L325,000,000. It has been found that this amount will not suffice for the expenditure which will have been incurred up to March 31, and we are therefore asking for a further vote of L37,000,000 to carry on the public service to that date. If the committee assents to our proposals it will raise the total amount granted by votes of credit for the year 1914-1915 to L362,000,000. I need not say anything as to the purposes for which this vote is required. They are the same as upon the last occasion. But I ought to draw attention to one feature in which the supplementary vote, which comes first, differs from the vote to be subsequently proposed for the services of the year 1915-1916. At the outbreak of the war the ordinary supply on a peace basis had been voted by the House, and consequently the votes of credit for the now current financial year, like those on all previous occasions, were to be taken in order to provide the amounts necessary for naval and military operations in addition to the ordinary grants of Parliament. It consequently follows that the expenditure charged, or chargeable, to votes of credit for this financial year represent, broadly speaking, the difference between the expenditure of the country on a peace footing and that expenditure upon a war footing. The total on that basis, if this supplementary vote is assented to, will be L362,000,000.

For reasons the validity of which the committee has recognized on previous occasions, I do not think it desirable to give the precise details of the items which make up the total, but without entering into that I may roughly apportion the expenditure. For the army and the navy, according to best estimates which can at present be framed, out of the total given there will be required approximately L275,000,000. That is in addition, as I have already pointed out, to the sum voted before the war for the army and the navy, which amounted in the aggregate to a little over L80,000,000. That leaves unaccounted for a balance of L87,000,000, of which approximately L38,000,000 represents advances for war expenditure made, or being made, to the self-governing dominions, Crown colonies, and protectorates, as explained in the Treasury minute last November, under which his Majesty's Government have undertaken to raise the loans required by the dominions to meet the heavy expenditure entailed upon them on the credit of the imperial exchequer. In addition to that sum of L38,000,000 there has been an advance to Belgium of L10,000,000, and to Serbia of L800,000. Further advances to these allies are under consideration, the details of which it is not possible yet to make public. The balance of, roughly, L28,000,000 is required for miscellaneous services covered by the vote of credit which have not yet been separately specified.

I think the committee will be interested to know what the actual cost of the war will have been to this country as far as we can estimate on March 31, the close of the financial year. The war will then have lasted for 240 days and the votes of credit up to that time, assuming this vote is carried, will amount to L362,000,000. It may be said, speaking generally, that the average expenditure from votes of credit will have been, roughly, L1,500,000 per day throughout the time. That, of course, is the excess due to the war over the expenditure on a peace footing. That represents the immediate charge to the taxpayers of this country for this year. But, as the committee knows, a portion of the expenditure consists of advances for the purpose of assisting or securing the food supplies of this country and will be recoverable in whole, or to a very large extent, in the near future. A further portion represents advances to the dominions and to other States which will be ultimately repaid. If these items are excluded from the account the average expenditure per day of the war is slightly lower, but after making full allowance for all the items which are in the nature of recoverable loans, the daily expenditure does not work out at less than L1,200,000.

These figures are averages taken over the whole period from the outbreak of the war, but at the outbreak of the war, after the initial expenditure on mobilization had been incurred, the daily expenditure was considerably below the average, as many charges had not yet matured. The expenditure has risen steadily and is now well over the daily average that I have given. To that figure must be added, in order to give a complete account of the matter, something for war services other than naval or military. At the beginning of the year these charges are not likely to be very considerable, but it will probably be within the mark to say that from April I we shall be spending over L1,700,000 a day above the normal, in consequence of the war.

Perhaps now I may say something which is not strictly in order on this vote, but concerns the vote of credit for the ensuing year, which amounts, as appears on the paper, to L250,000,000. The committee will at once observe an obvious distinction between the votes of credit taken for the current financial year and that which we propose to take for the ensuing year. As I have already pointed out, at the outbreak of war the ordinary supply of the year had been granted by the House, and accordingly the votes of credit for 1914-1915 were for the amounts required beyond the ordinary grants of Parliament for the cost of military and naval operations. When we came to frame the estimates for the ensuing year, 1915-1916, the Treasury was confronted with the difficulty, which amounted to an impossibility, of presenting to Parliament estimates in the customary form for navy and army expenditure, apart from the cost of the war. All the material circumstances have been set out in the Treasury minute of Feb. 5, and in principle have been approved by the House. As the committee will remember, the total of the estimates which we have presented for the army and the navy amount to only L15,000 for the army and L17,000 for the navy, and the remainder of the cost of both these services will be provided for out of votes of credit, and the vote of credit now being proposed provides for general army and navy service in as far as specific provision is not made for them in the small estimates already presented. This vote of credit, therefore, has two features which I believe are quite unique, and without precedent. In the first place, it is the largest single vote on record in the annals of this House, and, secondly, as I have said, it provides for the ordinary as well as for the emergency expenditure of the army and the navy. The House may ask on what principle or basis has this sum of L250,000,000 been arrived at. Of course it is difficult, and indeed impossible, to give any exact estimate, but as regards the period, so far as we can forecast it, for which this vote is being taken, it has been thought advisable to take a sum sufficient, so far as we can judge, to provide for all the expenditure which will come in course of payment up to approximately the second week in July—that is to say, a little over three months, or something like 100 days of war expenditure.

As regards the daily rate of expenditure—I have dealt hitherto with the expenditure up to March 31—the War Office calculates that from the beginning of April, 1915, the total expenditure on army services will be at the rate of L1,500,000 per day, with a tendency to increase. The total expenditure on the navy at the commencement of April will, it is calculated, amount to about L400,000 per day. The aggregate expenditure on the army and the navy services at the beginning of 1915-1916 is therefore L1,900,000 per day, with a tendency to increase, and for the purpose of our estimate the figure we have taken is a level L2,000,000 a day. On a peace footing the daily expenditure upon the army and the navy on the basis of the estimates approved last year was about L220,000 per day. So that the difference between L2,000,000 and L220,000 represents what we estimate to be the increased expenditure due to the war during the 100 days for which we are now providing.

There are other items belonging to the same category as those to which I have already referred in dealing with the supplementary vote with regard to advances to our own dominions and other States for which provision has also had to be made, and the balance of the total of L250,000,000 for which we are now asking, beyond the actual estimated expenditure for the army and the navy, will be applied to those and kindred or emergency purposes. Before I pass from the purely monetary aspect of the matter, it may be interesting to the committee to be reminded of what has been our expenditure upon the great wars of the past. In the great war which lasted for over twenty years, from 1793 to 1815, the total cost as estimated by the best authorities was L831,000,000. The Crimean war may be put down, taking everything into account, at L70,000,000. The total cost of the war charges in South Africa from 1899 to March 31, 1903, was estimated in a return presented to Parliament at L211,000,000. In presenting these two votes of credit the Government are making a large pecuniary demand on the House, a demand which in itself and beyond comparison is larger than has ever been made in the House of Commons by any British Minister in the whole course of our history.

We make it with the full conviction that after seven months of war the country and the whole empire are every whit as determined as they were at the outset [cheers] if need be at the cost of all we can command both in men and in money to bring a righteous cause to a triumphant issue. [Cheers.] There is much to encourage and to stimulate us in what we see. Nothing has shaken and nothing can shake our faith in the unbroken spirit of Belgium, [cheers,] in the undefeated heroism of indomitable Serbia, in the tenacity and resource with which our two great allies, one in the west and the other in the east, hold their far-flung lines and will continue to hold them till the hour comes for an irresistible advance. [Cheers.] Our own dominions and our great dependency of India have sent us splendid contributions of men, a large number of whom already are at the front, and before very long, in one or another of the actual theatres of war, the whole of them will be in the fighting line. [Cheers.] We hear today with great gratification that the Princess Patricia's Canadian regiment has been doing, during these last few days, most gallant and efficient service. [Cheers.]

We have no reason to be otherwise than satisfied with the progress of recruiting here at home. [Cheers.] The territorial divisions now fully trained are capable—I say it advisedly—of confronting any troops in the world, [cheers,] and the new armies, which have lately been under the critical scrutiny of skilled observers, are fast realizing all our most sanguine hopes. A war carried on upon this gigantic scale and under conditions for which there is no example in history is not always or every day a picturesque or spectacular affair. Its operations are of necessity in appearance slow and dragging. Without entering into strategic details, I can assure the committee that with all the knowledge and experience which we have now gained, his Majesty's Government have never been more confident than they are today in the power as well as the will of the Allies to achieve ultimate and durable victory. [Cheers.] I will not enter in further detail to what I may call the general military situation, but I should like to call the attention of the committee for a few moments to one or two aspects of the war which of late have come prominently into view.

I will refer first to the operations which are now in progress in the Dardanelles. [Cheers.] It is a good rule in war to concentrate your forces on the main theatre and not to dissipate them in disconnected and sporadic adventures, however promising they may appear to be. That consideration, I need hardly say, has not been lost sight of in the councils of the Allies. There has been and there will be no denudation or impairment of the forces which are at work in Flanders, and both the French and ourselves will continue to give them the fullest, and we believe the most effective, support. Nor, what is equally important, has there for the purpose of these operations been any weakening of the grand fleet. [Cheers.] The enterprise which is now going on, and so far has gone on in a manner which reflects, as I think the House will agree, the highest credit on all concerned, was carefully considered and conceived with very distinct and definite objects—political, strategic, and economical. Some of these objects are so obvious as not to need statement and others are of such a character that it is perhaps better for the moment not to state them. [Laughter and cheers.] But I should like to advert for a moment, without any attempt to forecast the future, to two features in this matter. The first is, that it once more indicates and illustrates the close co-operation of the Allies—in this case the French and ourselves—in the new theatre and under somewhat dissimilar conditions to those which have hitherto prevailed, and to acknowledge what I am sure the House of Commons will be most ready to acknowledge, that the splendid contingent from the French Navy that our allies have supplied [cheers] is sharing to the full both the hazards and the glory of the enterprise. [Cheers.] The other point on which I think it is worth while to dwell for a moment is that this operation shows in a very significant way the copiousness and the variety of our naval resources. [Cheers.] In order to illustrate that remark, take the names of the ships which have actually been mentioned in the published dispatches. The Queen Elizabeth, [cheers,] the first ship to be commissioned of the newest type of what are called superdreadnoughts, with guns of power and range never hitherto known in naval warfare. [Cheers.] Side by side with her is the Agamemnon, the immediate predecessor of the dreadnought, and in association with them the Triumph, the Cornwallis, the Irresistible, the Vengeance, and the Albion—representing, I think I am right in saying, three or four different types of the older predreadnought battleship which have been so foolishly and so prematurely regarded in some quarters as obsolete or negligible—all bringing to bear the power of their formidable twelve-inch guns on the fortifications, with magnificent accuracy and with deadly effects. [Cheers.] When, as I have said, these proceedings are being conducted, so far as the navy is concerned, without subtraction of any sort or kind from the strength and effectiveness of the grand fleet, I think a word of congratulation is due to the Admiralty for the way in which it has utilized all its resources. [Cheers.]

I pass from that to another new factor in these military and naval operations—the so-called German "blockade" of our coasts. [Cheers.] I shall have to use some very plain language. [Cheers.] I may, perhaps, preface what I have to say by the observation that it does not come upon us as a surprise. [Cheers.] This war began on the part of Germany with the cynical repudiation [cheers] of a solemn treaty on the avowed grounds that when a nation's interests required it, right and good faith must give way to force. ["Hear, hear!"] The war has been carried on, therefore, with a systematic—not an impulsive or a casual—but a systematic violation of all the conventions and practices by which international agreements had sought to mitigate and to regularize the clash of arms. [Cheers.] She has now, I will not say reached a climax, for we do not know what may yet be to come, but she has taken a further step without any precedent in history by mobilizing and organizing not upon the surface but under the surface of the sea a campaign of piracy and pillage. [Prolonged cheers.]

Are we—can we—here I address myself to the neutral countries of the world—are we to or can we sit quiet as though we were still under the protection of the restraining rules and the humanizing usages of civilized warfare? [Cheers.] We think we cannot. [Cheers.] The enemy, borrowing what I may, perhaps, for this purpose call a neutral flag from the vocabulary of diplomacy, describe these newly adopted measures by a grotesque and puerile perversion of language as a "blockade." [Laughter.] What is a blockade? A blockade consists in sealing up the war ports of a belligerent against sea-borne traffic by encircling their coasts with an impenetrable ring of ships of war. [Cheers.]

Where are these ships of war? [Cheers.] Where is the German Navy? [Cheers.] What has become of those gigantic battleships and cruisers on which so many millions of money have been spent and in which such vast hopes and ambitions have been invested? I think, if my memory serves me, they have only twice during the course of these seven months been seen upon the open sea. Their object in both cases was the same—murder, [cheers,] civilian outrage, and wholesale destruction of property in undefended seaside towns, and on each occasion when they caught sight of the approach of a British force they showed a clean pair of heels, and they hurried back at the top of their speed to the safe seclusion of their mine fields and their closely guarded forts.

Lord R. CECIL—Not all. [Laughter.]

Mr. ASQUITH—No; some had misadventures on the way. ["Hear, hear!" and laughter.] The plain truth is—the German fleet is not blockading, cannot blockade, and never will blockade our coasts.

I propose now to read to the committee the statement which has been prepared by his Majesty's Government and which will be public property tomorrow. It declares, I hope in sufficiently plain and unmistakable terms, the view which we take, not only of our rights, but of our duty. [Cheers.]

Germany has declared that the English Channel, the north and west coasts of France, and the waters around the British Isles are a "war area" and has officially notified that all enemy ships found in that area will be destroyed and that neutral vessels may be exposed to danger. This is, in effect, a claim to torpedo at sight, without regard to the safety of crew or passengers, any merchant vessel under any flag. As it is not in the power of the German Admiralty to maintain any surface craft in these waters, the attack can only be delivered by submarine agency. The law and custom of nations in regard to attacks on commerce have always presumed that the first duty of the captor of a merchant vessel is to bring it before a prize court, where it may be tried, and where the regularity of the capture may be challenged, and where neutrals may recover their cargoes. The sinking of prizes is in itself a questionable act, to be resorted to only in extraordinary circumstances and after provision has been made for the safety of all the crew or passengers—if there are passengers on board. The responsibility for discriminating between neutral and enemy vessels, and between neutral and enemy cargo, obviously rests with the attacking ship, whose duty it is to verify the status and character of the vessel and cargo and to preserve all papers before sinking or even capturing the ship. So, also, is the humane duty to provide for the safety of the crews of merchant vessels, whether neutral or enemy, an obligation on every belligerent. It is on this basis that all previous discussions of the law for regulating warfare at sea have proceeded.

The German submarine fulfills none of these obligations. She enjoys no local command of the waters in which she operates. She does not take her captures within the jurisdiction of a prize court; she carries no prize crew which she can put on board the prize she seizes. She uses no effective means of discriminating between a neutral and an enemy vessel; she does not receive on board, for safety, the crew of the vessel she sinks. Her methods of warfare are, therefore, entirely outside the scope of any of the international instruments regulating operations against commerce in time of war. The German declaration substitutes indiscriminate destruction for regulated capture. [Cheers.] Germany is adopting these methods against peaceful traders and non-combatant crews with the avowed object of preventing commodities of all kinds, including food for the civil population, from reaching or leaving the British Isles and Northern France.

Her opponents are therefore driven to frame retaliatory measures [loud cheers] in order, in their turn, to prevent commodities of any kind [loud cheers] from reaching or leaving the German Empire. [Renewed cheers.] These measures will, however, be enforced by the British and French Governments, without risk to neutral ships or to neutral or non-combatant lives, and with strict observance of the dictates of humanity. The British and French Governments will therefore hold themselves free to detain and take into port ships carrying goods of presumed enemy destination, ownership, or origin. It is not intended to confiscate such vessels or cargoes unless they would be otherwise liable to confiscation. Vessels with cargoes which have sailed before this date will not be affected. [Loud cheers.]

That, Sir, is our reply. [Cheers.] I may say, before I comment upon it, that the suggestion which I see is put forward from a German quarter that we have rejected some proposal or suggestion made to the two powers by the United States Government—I will not say anything more than that it is quite untrue. On the contrary, all we have said to the United States Government is that we are taking it into careful consideration in consultation with our allies.

Now the committee will have observed that in the statement which I have just read of the retaliatory measures we propose to adopt, the words "blockade" and "contraband" and other technical terms of international law do not occur. And advisedly so. In dealing with an opponent who has openly repudiated all the principles both of law and of humanity we are not going to allow our efforts to be strangled in a network of juridical niceties. [Cheers.] We do not intend to put into operation any measures which we do not think to be effective, [cheers,] and I need not say we shall carefully avoid any measure which would violate the rules either of humanity or of honesty. But, subject to those two conditions, I say not only to our enemy, but I say it on behalf of the Government, and I hope on behalf of the House of Commons, that under existing conditions there is no form of economic pressure to which we do not consider ourselves entitled to resort. [Loud cheers.] If, as a consequence, neutrals suffer inconvenience and loss of trade, we regret it, but we beg them to remember that this phase of the war was not initiated by us. [Cheers.] We do not propose either to assassinate their seamen or to destroy their goods. What we are doing we do solely in self-defense.

If, again, as is possible, hardship is caused to the civil and non-combatant population of the enemy by the cutting off of supplies, we are not doing more in this respect than was done in the days when Germany still acknowledged the authority of the law of nations sanctioned by the first and the greatest of her Chancellors, and as practiced by the expressed declaration of his successor. We are quite prepared to submit to the arbitrament of neutral opinion in this war in the circumstances in which we have been placed. We have been moderate and restrained, and we have abstained from things which we were provoked and tempted to do, and we have adopted the policy which recommends itself to reason, common sense, and to justice.

This new aspect of the war only serves to illustrate and to emphasize the truth that the gravity and the magnitude of the task which we have undertaken does not diminish, but increases, as the months roll by. The call for men to join our fighting forces, which is our primary need, has been and is being nobly responded to here at home and throughout the empire. That call, we say with all plainness and directness, was never more urgent or more imperious than today. For this is a war not only of men but of material. To take only one illustration, the expenditure upon ammunition on both sides has been on a scale and at a rate which is not only without all precedent but is far in excess of any expert forecast. At such a time patriotism has cast a heavy burden on the shoulders of all who are engaged in trades or manufactures which directly or indirectly minister to the equipment of our forces. It is a burden, let me add, which falls, or ought to fall, with even weight on both employers and employed. [Cheers.] Differences as to remuneration or as to profit, as to hours and conditions of labor, which in ordinary times might well justify a temporary cessation of work should no longer be allowed to do so. The first duty of all concerned is to go on producing with might and main what the safety of the State requires, [cheers,] and if this is done I can say with perfect confidence the Government on its part will insure a prompt and equitable settlement of disputed points, and in cases of proved necessity will give on behalf of the State such help as is in their power. [Cheers.] Sailors and soldiers, employers and workmen in the industrial world are all at this moment partners and co-operators in one great enterprise. The men in the shipyards and the engineering shops, the workers in the textile factories, the miner who sends the coal to the surface, the dockyard laborer who helps to load and unload the ships, and those who employ and organize and supervise their labors are one and all rendering to their country a service as vital and as indispensable as the gallant men who line the trenches in Flanders or in France or who are bombarding fortresses in the Dardanelles. [Cheers.]

I hear sometimes whispers, hardly more than whispers, of possible terms of peace. Peace is the greatest human good, but this is not the time to talk of peace. Those who talk of peace, however excellent their intentions, are in my judgment victims, I will not say of wanton, but of grievous self-delusion. Just now we are in the stress and tumult of a tempest which is shaking the foundations of the earth. The time to talk of peace is when the great tasks in which we and our allies embarked on the long and stormy voyage are within sight of accomplishment. Speaking at the Guildhall at the Lord Mayor's banquet last November I used this language, which has since been repeated almost in the same terms by the Prime Minister of France, and which I believe represents the settled sentiment and purpose of the country. I said:

We shall never sheathe the sword which we have not lightly drawn until Belgium recovers in full measure all and more than she has sacrificed, until France is adequately secured against the menace of aggression, until the rights of the smaller nationalities of Europe are placed upon an unassailable foundation, and until the military domination of Prussia is wholly and finally destroyed. [Cheers.]

What I said early in November, now, after four months, I repeat today. We have not relaxed nor shall we relax in the pursuit of every one and all of the aims which I have described. These are great purposes, and to achieve them we must draw upon all our resources, both material and spiritual. On the one side, the material side, the demands presented in these votes is for men, for money, for the fullest equipment of the purposes of war. On the other side, what I have called the spiritual side, the appeal is to those ancient inbred qualities of our race which have never failed us in times of stress—qualities of self-mastery, self-sacrifice, patience, tenacity, willingness to bear one another's burdens, a unity which springs from the dominating sense of a common duty, unfailing faith, inflexible resolve. [Loud cheers.]



Sweden's Scandinavian Leadership

By a Swedish Political Expert

[From THE NEW YORK TIMES, Feb. 4, 1915.]

In common with a majority of the other countries of Europe, Sweden has had a full measure of experience in the difficulties confronting neutral powers while a world struggle like the present European conflict is in progress, and has learned that, even if it may prove effective in averting blood-shed, neutrality does not by any means insure a nation against the other vicissitudes of war. Aside from operations of a purely military character, the groups of belligerent powers are carrying on a commercial warfare of constantly increasing intensity. It is characteristic, perhaps, that both parties to the struggle, as time goes on, appear to become more and more indifferent to the injury incidentally inflicted on neutral countries.

Geographically situated so that it might provide easy transit for shipments both to Russia and to the German Empire, Sweden, as a matter of course, has become the object of lively interest to both groups of warring nations in their dual concern of securing advantages to themselves and placing obstacles in the way of the enemy. From the very beginning, however, Sweden has maintained an attitude of strictest neutrality and of loyal impartiality toward both sides in the struggle. It is the object of this article to set forth as briefly as possible the manner in which the neutrality of Sweden has been made manifest.

Immediately after the war broke out in August last year the Swedish Government proclaimed its intention to remain neutral throughout the conflict. Simultaneous action was taken by the Government for the strengthening of the country's defenses, in the firm conviction that only if there was behind it the armed strength with which to enforce it would the neutrality of Sweden be respected. A move of the most profound significance—the first in our endeavors to create in Scandinavia a neutral "centre" and to gird ourselves with a greater strength to make our peaceful intentions effective—was made on Aug. 8 of last year, when the Foreign Ministers of Sweden and Norway appeared in the representative assemblies of both peoples and delivered identically worded explanatory communications in which was embodied a statement to the effect that the Swedish and Norwegian Governments had agreed to maintain their neutrality throughout the war at any cost, and that the two Governments had exchanged mutually binding and satisfactory assurances with a view to preventing any situation growing out of the state of war in Europe from precipitating either country into acts of hostility directed against the other.

In the meantime, neutral commerce and shipping during the months that followed were exposed to most serious infringements by the warring powers, such as the closing of ports by mines; limitations in the rights of neutral shipping to the use of the sea (mare libre) and of other established routes of maritime trade; arbitrary broadening in the definition of what shall constitute contraband of war, &c. As an instance it may be stated that England for a time treated magnetic iron ore as contraband of war and that Germany still persists in so regarding certain classes of manufactured wood. In both these instances Swedish exports have suffered severely. On initiative taken by the Swedish Government in the middle of last November the Governments of Sweden, Denmark, and Norway lodged identically worded protests with the envoys of certain of the powers engaged in the war against measures taken by them which threatened serious disturbance to neutral traffic.



One further step—of the utmost importance through what it accomplished toward establishing firmly the position of the neutral States in the north—was the meeting between the Kings of Sweden, Norway, and Denmark at Malmoe on Dec. 19 last. This meeting was especially designed to provide an opportunity for taking counsel together regarding means which may be resorted to for the purpose of limiting and counteracting the economical difficulties imposed on the three countries through the war. The meeting at Malmoe served not only to give most powerful expression to the common determination of the northern kingdoms to remain neutral, but it became the means also of agreeing upon and adopting a modus vivendi for continued co-operation between the three countries during the war for the protection of interests they have in common.

In this manner Sweden has led in a movement to establish for the northern countries a potential policy of neutrality with the practical aim of limiting and reducing to a minimum the economical difficulties consequent upon the existing state of war.

From what already has been said it appears clearly, too, how completely without justification have been the accusations which have been voiced from time to time in the press of countries that enter into either of the belligerent groups—that Sweden, now in one respect and now in another, had shown partiality to the adversary. Thus, suspicion has been cast, with no justification whatever, on the circumstance that during the last month Sweden has imported large quantities of necessaries which would have been both valuable and helpful to the belligerents. And yet, this increase in the Swedish imports is very readily explained on the ground that it was necessary, partly, in order to make up for an existing shortage in supplies due to stopped traffic during the first months of the war, and, partly, to insure ability to fill Swedish demands for some time to come. A country which desires to remain neutral is not in a position to submit to dictation from any of the belligerent nations, but this very thing is frequently interpreted by one party to a struggle as involving an understanding with the other.

But Sweden's peaceful resolve and her fixed determination to maintain her life as a nation against all attempts at encroachment would count for little if behind her word there did not exist the strength to make it good and material resources to fall back on when the demand comes. That these exist in Sweden will be shown in the following with some data of Sweden's economics.

With a population of 5,700,000, distributed over an area of 448,000 square kilometers, (170,977 square miles,) as compared with 9,415,000 square kilometers (3,025,600 square miles) in the United States, Sweden, in comparison with European countries in general, is very sparsely inhabited. The possibilities for growth and development, however, are great owing to natural resources, which are both rich and varied. Of Sweden's area, 40,000 square kilometers (15,266 square miles) is cultivated land. The value of the annual production of grain is estimated at about 340,000,000 kroner, (about $91,900,000,) offset by an import of grain which exceeds the export by about 70,000,000 kroner, (about $18,900,000.) From this it appears that agriculture as yet retains its place as the principal industry of the country. With the bigger half of the country's area timber and the rivers well adapted to logging, Sweden quite naturally has become one of the foremost countries in the world in the export of lumber, wood pulp, and manufactured wood. Another natural product of Sweden, and one of the utmost importance, is iron ore, of which there was exported in 1913 to the value of about 69,000,000 kroner, (about $18,500,000,) chiefly from the large mineral fields in the northernmost part of the country. Besides this production of raw material, Sweden has important manufacturing industries which thrive as a result of the abundant supply of water power, an extensive network of railroads, and a shipping industry which is in a state of flourishing development.

The total output of our Swedish industries (mining not included) in 1912 was appraised at a net (manufacturing) value of 1,778,000,000 kroner, (about $481,600,000.) Of this total, 476,000,000 kroner (about $128,600,000) represents foodstuffs and luxuries, 353,000,000 kroner (about $95,400,000) wood products, &c.; 222,000,000 kroner ($60,000,000) textile products, and so on.

A few figures will illustrate Sweden's exchange of products with foreign countries. In 1912 the foreign trade of Sweden reached a total of 1,554,000,000 kroner, (about $420,000,000.) The imports aggregated 794,000,000 kroner (about $214,600,000) and the exports 760,000,000 kroner, (about $205,400,000,) thus showing a relatively advantageous trade balance. Of the imported values, 28 per cent. was foodstuffs and luxuries, 45 per cent. raw materials, and 26 per cent. articles manufactured either wholly or in part. Of the exports, 14 per cent. was foodstuffs and luxuries, 23 per cent. raw materials, and not less than 63 per cent. articles of manufacture, finished completely or in part.

The principal industrial products represented among these exports are enumerated here:

Kroner Wood products 1,912,000,000 $516,700,000[1] Pulp and paper 134,000,000 36,000,000 Metal products 105,000,000 28,400,000 Machinery 56,000,000 15,400,000 Matches 16,000,000 4,300,000 Pottery products 15,000,000 4,000,000

[Footnote 1: The amounts in this column are close approximates.]

With regard to our exports, there have been especially large increases in those of pulp and machinery. The principal types of machinery which figure among the exports of Sweden are milk separators, oil motors, telephone apparatus, electric engines, and ball bearings. In these exports are plainly indicated the inventive genius of the Swedes and their aptitude for technical and industrial pursuits.

With reference to the Swedish railroads, this fact is deserving of mention: Sweden leads all Europe with 2.5 kilometers to each 1,000 inhabitants, (United States has 4.14 kilometers.) The mercantile marine of Sweden has experienced powerful growth in recent years. In 1912, with a net tonnage of 805,000, it held the sixth place among the merchant fleets of Europe, being ahead of, among other countries, Spain, Russia, and the Netherlands. Especially has the growth in Sweden's merchant marine been pronounced since 1904, when the first regular ocean lines with Swedish vessels were established. Today Swedish steamship lines are maintaining regular traffic with all parts of the world. Thus, among other things, Sweden has established freight lines, with steamers plying to both the east and west coasts of North America. Quite recently, despite the financial crisis brought on by the war, a company has been formed with the object of establishing passenger traffic with Swedish steamships of high speed between Gothenburg and either New York or Boston.

After scrutinizing these figures the reader ought not to be surprised at the assertion that Sweden is exceptionally well situated from an economical point of view, and, perhaps, is among the countries which have been least affected by the economical crisis consequent upon the war. The national debt of Sweden, which was created very largely with a view to financing the construction of the Government railroads and for other productive purposes, is at present only 720,000,000 kroner, (about $194,500,000.) This is only 126 kroner (a small fraction above $34) for each inhabitant, while the corresponding figure for France in 1913 was 591 kroner, (nearly $160;) the Netherlands, 282 kroner, ($70.62;) Great Britain, 280 kroner, ($70.57;) Germany, 276 kroner, ($70.40;) Italy, 270 kroner, ($70.30,) &c. Against the national debt of 720,000,000 kroner (about $194,500,000) Sweden has Crown assets at this time appraised at 1,761,000,000 kroner net, (nearly $476,000,000.)

Another evidence of the splendid financial condition of Sweden is afforded in the fact that, since the war broke out and countries which under normal conditions might be looked to for loans had closed their markets to foreign nations, the domestic market has been able to supply fully all, both public and private, demands for funds. Thus, when the Swedish Government, early last October, sought a loan of 30,000,000 kroner at home, this was fully subscribed in three days. Nor have municipalities or private banks encountered any difficulty in placing bonds for amounts of considerable size in the domestic market. The only loan for which the Swedish Government has contracted abroad during the crisis was for $5,000,000, and this was placed in New York for the purpose of facilitating payments for large purchases of American grain.

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At least a few words with particular reference to the commercial intercourse between Sweden and the United States. According to statistics from the year 1912, the imports of Sweden from the United States were of the aggregate value of 60,000,000 kroner, (about $16,200,000,) while the exports aggregated 32,000,000 kroner, (about $8,600,000.) The principal imports were: Cotton, 17,000,000 kroner, (about $4,600,000;) oils, 12,000,000 kroner, (about $3,240,000;) copper, 6,200,000 kroner, (about $1,675,000;) machinery, 5,000,000 kroner, (about $1,350,000;) grain and flour, 2,300,000 kroner, (about $621,000;) bacon, 1,700,000 kroner, (about $460,000.) The principal articles of export in the same year were: Pulp, 12,400,000 kroner, (about $3,350,000;) manufactured iron and steel, 8,100,000 kroner, (about $2,200,000;) iron ore, 3,600,000 kroner, (about $973,000;) paper, 2,100,000 kroner, (about $568,000;) elastic gum refuse, 1,900,000 kroner, (about $514,000;) matches, 1,300,000 kroner, (about $350,000.)

Since the outbreak of hostilities in August last year there has been a tremendous increase in trade between Sweden and the United States. The tonnage employed in this trade has been multiplied many times in order adequately to care for the traffic. Sweden has sought to secure in the United States a multiplicity of necessaries which under normal conditions have been obtained from the belligerent countries. From the United States, too, there has come an increased demand for many Swedish products.

It is to be hoped that a large portion of this commerce, which has been the artificial outgrowth of unusual conditions, will continue, even after the present world crisis shall happily have become a thing of the past. Surely, it would be to the mutual advantage of both countries to develop and strengthen their direct trade relations.



FROM ENGLAND

By MAURICE HEWLETT.

[From King Albert's Book.]

O men of mickle heart and little speech, Slow, stubborn countrymen of heath and plain, Now have ye shown these insolent again That which to Caesar's legions ye could teach, That slow-provok'd is long-provok'd. May each Crass Caesar learn this of the Keltic grain, Until at last they reckon it in vain To browbeat us who hold the Western reach.

For even as you are, we are, ill to rouse, Rooted in Custom, Order, Church, and King; And as you fight for their sake, so shall we, Doggedly inch by inch, and house by house; Seeing for us, too, there's a dearer thing Than land or blood—and that thing Liberty.



War Correspondence

The Beloved Hindenburg

A Pen Portrait of the German Commander in Chief in the East

[By a Staff Correspondent of THE NEW YORK TIMES.]

GERMAN GREAT HEADQUARTERS, EAST, Feb. 10.—But for the "field gray" coat and the militant mustache, I should have taken him for a self-made American, a big business man or captain of industry, as he sat at his work desk, the telephone at his elbow, the electric push-buttons and reams of neat reports adding to the illusion. Quiet, unassuming, and democratic, he yet makes the same impression of virility and colossal energy that Colonel Roosevelt does, but with an iron restraint of discipline which the American never possessed, and an earnestness of face and eye that I had only seen matched in his Commander in Chief, the Kaiser. Here was a man whom the most neutral American could instantly admire and honor, regardless of the merits of the controversy. It was Hindenburg, the well beloved, the hope of Germany. He has already been "done" by journalists and Senator Beveridge, but 70,000,000 are pinning their faith to him, which makes him worth "doing" again—and again.

For a moment I nearly forgot that I was an American with "nerve," bent on making him say something, preferably indiscreet; it seemed almost a shame to bother this man whose brain was big with the fate of empire. But, although I hadn't been specially invited, but had just "dropped in" in informal American fashion, the Commander in Chief of all his Kaiser's forces in the east stopped making history long enough to favor me with a short but thought-provoking interview.

As to his past performances, the Field Marshal genially referred to the detailed official summary; as to the future, he protested.

"I am not a prophet. But this I can say. Tell our friends in America—and also those who do not love us—that I am looking forward with unshakable confidence to the final victory—and a well-earned vacation," he added whimsically. "I should like nothing better than to visit your Panama Exposition and meet your wonderful General Goethals, the master builder, for I imagine our jobs are spiritually much akin; that his slogan, too, has been 'durchhalten' ('hold out') until endurance and organization win out against heavy odds."

Then with sudden, paradoxical, terrific quiet earnest: "Great is the task that still confronts us, but greater my faith in my brave troops." One got indelibly the impression that he loved them all, suffered under their hardships and sorrowed for their losses.

"For you, this war is only a titanic drama; we Germans feel it with our hearts," he said thoughtfully.

The Field Marshal spoke warmly of the Austro-Hungarian troops, and cited the results of the close co-operation between his forces and the Austrian armies as striking proof of the proverb, "In union is strength." Like all other German Generals whom I had "done," he, too, had words of unqualified praise for the bravery of his enemies. "The Russians fight well; but neither mere physical bravery nor numbers, nor both together, win battles nowadays."

"How about the steam roller?"

"It hasn't improved the roads a bit, either going forward or backward," he said with a grim smile.

"Are you worrying over Grand Duke Nicholas's open secret?" I asked, citing the report via Petrograd and London of a new projected Russian offensive that was to take the form, not of a steam roller, but of a "tidal wave of cavalry."

"It will dash against a wall of loyal flesh and blood, barbed with steel—if it comes," he said simply.

My impression, growing increasingly stronger the more I have seen, that German military success had been to no small extent made possible by American inventive genius and high-speed American methods, received interesting partial confirmation from the Field Marshal, whose keen, restless mind, working over quite ordinary material, produced the new suggestive combination of ideas that, while "America might possibly be materially assisting Germany's enemies with arms, ammunition, and other war material, certain it was that America, in the last analysis, had helped Germany far more."

"But for America, my armies would possibly not be standing in Russia today—without the American railroading genius that developed and made possible for me this wonderful weapon, thanks largely to which we have been able with comparatively small numbers to stop and beat back the Russian millions again and again—steam engine versus steam roller. Were it for nothing else, America has proved one of our best friends, if not an ally.

"We are also awaiting with genuine interest the receipt of our first American guns," the Field Marshal added. How was Germany expecting to get guns from America? He was asked to explain the mystery.