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tator just as effectively as Lord Kitch-

621 position of Shipping Controller is held by ener did in the military sphere. An inSir Joseph P. Maclay, himself an impor teresting change is that Mr. Balfour tant ship owner. Rowland E. Prothero, succeeds Viscount Grey as Foreign Secthe new President of the Board of Agri retary. This appointment, which was culture, is an authority on agriculture, violently attacked by the Northcliffe and has been manager of the estates of press, shows that the struggle behind the the Duke of Bedford, one of the world's scenes was not exactly that pictured by richest landlords.

The London Times and Daily Mail. Sir Alfred Mond is one of Britain's

This is emphasized by the fact that Lord

Robert Cecil remains Minister of Blockleading captains of industry, the head of many important enterprises.

ade, despite the demand that he, too, be pointment to the Cabinet is surprising, in

sent packing with the “ elder statesmen." view of his German parentage and the

Lord Derby, as War Secretary, and Sir attacks made on him since the war. Sir

Edward Carson, as First Lord of the AdFrederick Cawley and Albert Illingworth

miralty, are regarded as the right men have large interests and much practical

to energize their departments. experience in the textile industries of the

For Economic Problems North of England. So unpolitical is the

The new Cabinet, apart from the Labor character of the new element in the ad

element, is a combination of Unionist ministration that some of the Ministers

politicians who have always advocated are not even members of Parliament and

the economic union of the empire and will have to find seats if they are to re captains of industry who belong to the main in office. Even Bonar Law before

so-called “Liberal plutocracy."

It is a entering politics had had a long busi

Cabinet that has obviously been formed ness career as an ironmaster. The La to control and organize Great Britain as bor Ministers, Arthur Henderson, John an industrial nation and to maintain, if Hodge, who is at the head of the new not extend, the British world power in Ministry of Labor, and George N. Barnes, commerce. As such it is equally suitable have all been workers and are leaders to the needs of war or of peace. If there in the trade union movement.

is to be a trade war after the war, then War Council of Five

this is the kind of Government for the

purpose. The other important feature of the Lloyd George Government is the War

The change that has taken place is not Council of Five. He is the only Liberal

merely the result of a fight between rival in it. Three are Unionists, namely, Lord

leaders or political factions, but is due to Curzon, who is Lord President of the

the assertion by the great economic interCouncil and Government leader in the

ests of the country of their intention to

control the affairs of a nation which deHouse of Lords; Bonar Law, Chancellor of the Exchequer and Government leader

pends upon economic efficiency, whether in the House of Commons, and Lord

it be for the purpose of waging war or to Milner, Minister without portfolio. The

meet the extremely difficult situation Labor member is Mr. Henderson, also

which will arise as soon as the country Minister without portfolio. As both Lord

has to readapt itself to peace conditions. Curzon and Bonar Law have other du

Meanwhile Mr. Asquith, having refused ties, it appears that the supreme direc

the Earldom which would have relegated tion of the war will be centred in the

him to the House of Lords, has taken his hands of the Prime Minister, with Milner

place with his former Liberal colleagues and Henderson as his chief assistants.

on the front Opposition bench in the Lord Milner's appointment is not at all

House of Commons. At a meeting of the unexpected. He is a great driving force.

Liberal Party at the Reform Club on Partly German by descent and educa

Dec. 8 he stated that, although he had retion, he showed in South Africa that he

signed the Premiership, he had not given could wield an iron hand as civil dic

up the leadership of the Liberal Party.
There had been, he added, a carefully
engineered campaign against him, but he

acquitted Lloyd George and his other as

army. On Dec. 7 the Chamber, by a sociates in the retiring Government of vote of 344 to 160, passed a resolution complicity therein. He emphasized the expressing confidence in the Government necessity of giving strong adhesion to in its conduct of the war and approving whatever Government was in power for the proposals to reorganize the General the purpose of bringing about what all Staff and “to concentrate under redesired-the winning of the war. The stricted direction the conduct of the meeting decided to follow Mr. Asquith's war.” Next day a special meeting of the advice, and the Liberal Opposition will Cabinet was held and the establishment content itself with friendly criticism. of a War Council and the economic orNevertheless, the Liberal Party has been ganization of the country were considsplit, and those who oppose Lloyd George ered. The semi-official note issued on look upon him as a wrecker. But the

Dec. 10 stated that there would be “a country as a whole admires him and be diminution in the number of the memlieves he is the right man in the right bers of the Cabinet and the constitution place. His advent to the Premiership of a restricted National Defense Comwas greeted everywhere with the remark,

mittee, as in England.” Finally, on Dec. “ If Lloyd George can't win the war for 12, M. Aristide Briand, the Premier, anus, no one can."

nounced that he had completed the re

construction of the Cabinet. The suCabinet Changes in France

preme direction of the war is concenIn France the recent changes were ac

trated in a National Defense Council of complished with very little public con Five, consisting of M. Briand, Premier troversy. One reason for the absence of

and Foreign Minister; M. Alexandre the fierce discussions that marked the

Ribot, Finance Minister; General Hubert British crisis was the stringent censor Lyautey, Minister of War; Rear Admiral ship, but a significant change is indi

Lucaze, Minister of Marine, and M. Alcated by the adoption on Dec. 14 by the

bert Thomas, who, as Minister of FabriChamber of Deputies of a motion abol cation Nationale, (National Manufactishing the political censorship, while re ures,) is also to have control of munitaining the diplomatic and military cen

tions and transportation. The rest of sorship. The motion was accepted by the Cabinet has been reorganized, one of the Government and passed unanimously. the Ministers being described as that of The agitation against Premier Briand is

National Subsistence and Labor. Genaccordingly now able to find fuller ex eral Lyautey, the new War Minister, has pression. Although he has reconstructed

been French Resident General in Mohis Cabinet and followed the British example of a small War Council, there is

A resolution of confidence in the new at this writing evidence of very great Government was adopted by the Chamdissatisfaction, with a crisis in prospect. ber of Deputies on Dec. 13, but as the A sign of unrest is the diminished Gov

voting on this occasion was 314 to 165, ernment majority in the Chamber of

M. Briand's majority had in less than a Deputies.

week fallen from 184 to 149. M, ClémenAt the beginning of December the ceau says that the minority included Chamber of Deputies was holding a some of the most important members of series of secret sessions. More energetic the Chamber. The first of the expected measures of civil, commercial, and indus changes in the high command was made trial mobilization were being discussed. on Dec. 12, when it was announced that The situation in England at once quick General Nivelle, commander of the ened interest among French statesmen French troops at Verdun, had been apin the question whether the present Gov pointed Commander in Chief of the ernmental machinery was in conformity French armies of the north and northwith the exigencies of war, and also east. This was followed next day by whether there should not be a reorgan President Poincaré signing a decree ization of the supreme command of the naming “General Joffre, Commander in






Chief of the French Armies, technical counsel to the Government regarding the direction of the war.” Another decree declared that the Commanders in Chief of the armies of the north and northeast and of the Orient were now to be directly responsible to the Minister of War. The effect of this decree is to bring both General Nivelle and General Sarrail, Commander of the Entente forces in Macedonia, under the control of the War Office, now presided over by General Lyautey, and make them independent of the Commander in Chief, General Joffre.

Changes in Other Countries Austria made a record for a shortlived Government when the Ministry headed by Dr. Ernest von Koerber resigned on Dec. 13. It had only been formed on Nov. 1 after the assassination of Premier Stuerghk. Herr Alexander Spitzmueller was intrusted by Emperor Charles with the formation of a Cabinet.

The resignation of the Rumanian Premier was announced on Dec. 15; and in Portugal, according to Lisbon newspapers, coalition Cabinet again being considered. At this writing there is little information to explain most of the political changes in the belligerent countries, so that it is difficult to say whether they are local and personal or part of a general tendency possibly connected with coming events.

Russia's Ministerial Crisis There were two fundamental causes for the Cabinet crisis in Russia. The forces of the war and the forces of democracy were these two causes. The significance of the downfall of Sturmer is to be found in the fact that he was known to favor a separate peace with Germany as much as in the inefficiency and incompetence of his reactionary and bureaucratic administration.

The new Premier, Alexander Feodorovitch Trepoff, and the new Foreign Minister, Nikolai Nikolaievitch Pokrovsky, are the very opposite of Boris Sturmer. Both are men of broad vision, and their vision is directed not toward the realm of politics, but toward that of economics and industrial expansion. Being economic radicals for Russia, their selection

promises a stable Government that will bring their country by the longer yet surer route to the stage of regeneration that surely awaits her in the future. It is through the slow process of economic development that a new political Russia will have been evolved.

Trepoff, like Pokrovsky, is a man of positive convictions. Both are men of action. The program that Trepoff unfolded before a group of journalists when he became Minister of Communications in November, 1915, sounded utopian for Russia. He proposed the building of tens of thousands of miles of new railroads and hundreds of thousands of miles of canals. Ten months after this program had been laid before the newspaper men, in the course of the most critical and strenuous war in the life of humanity, Russia had made a substantial beginning toward the full realization of Trepoff's plans. An initial loan of 350,000 rubles

oversubscribed four times! This fact alone, in the present state of Russian finances, illustrates magnificently the new Premier's methods of doing things, and doing them successfully. The 3,000 miles of new railways that have been built in Russia during 1916 are another example of Trepoff's efficiency.

Pokrovsky, the Foreign Minister, who was Controller of the Empire in Sturmer's Cabinet, is a novice in diplomacy and politics. He was assistant to the Minister of Finances in 1906, was member of the Imperial Council, and in both capacities showed himself to be a fearless advocate of economic reforms. He is very popular with the Duma, which has now acquired a controlling influence in national affairs. His speech in the Russian Parliament, made Dec. 15 with the approval of the Czar, in which he rejected in the name of the Government the German peace offer, shows him to be the kind of Foreign Minister that public opinion in Russia demanded. He is straightforward, sincere, candid. Incidentally, the appointment of Pokrovsky means the renewal in the near future of the commercial treaty between Russia and the United States, on the latter's conditions.


War Finances in Europe
Some Aspects of the Present and Future Situation

[Written for CURRENT HISTORY MAGAZINE by an Official of a Leading American International

Banking House.]


HE financial aspects of the great profitable to suit him. As this article

European war are of vital interest is written rates of interest show a stifto the people of the United

fening tendency, the money market havStates. Vast and complex as they ing (early in December) passed through are, we are beginning to realize that we something resembling a flurry. The unmust master some of the principles in told resources of our new Federal Revolved if we are to look the future in serve banking system, however, are althe face, for although the whole world most untried as yet. For the first time is involved in a financial sense, no neu in years money is as cheap throughout tral power is so directly interested as the West at this season of the year as we, and as yet no economist has arisen it is in the East, The various foreign with sufficient imagination or power of

loans have been absorbed with ease by prophecy to glimpse the possibilities of the investing public and financial instituits ultimate results upon the future of tions and their prices have been mainthis country

tained on the Exchanges in spite of adDuring the last two years the war has verse factors. created developments in the world of

Can Europe Pay Its Debts? finance which have astonished students of economics. Who would have ventured

This raises some very interesting questo prophesy, for instance, three years

tions, well worthy of attempted explanaago that any event or series of events tion. For the present, let us inquire would shift the financial centre of the more directly into the position of the world from London to New York, even

belligerent Governments from a financial temporarily? Who would have dreamed point of view. As indicated above, we that our bankers could, almost within are directly interested in the vital point the period mentioned, loan to foreign

at issue, how is Europe's war bill to be Governments such a sum as, approxi paid ?

We have loaned vast sums of mately, two billions of dollars!

money to the belligerents, and we have Such sums

are staggering in their given them credit for millions of dollars' proportions and tend to bewilder the worth of goods of every kind. To put average mind. The first question which

the matter into blunt words, the bottom presents itself to the casual thinker is,

must fall completely out of our present where does all this money come from?

vaunted prosperity unless Europe can He is apt to remember that about this

It is therefore perfectly right time every year there used to be quite and proper that we should inquire into a scramble for funds to move the crops

the credit position of those of the belof the West, as well as to take care of ligerents with which we are concerned, the other normal requirements of busi

just as the credit manager of a mercanness and speculation. This year and last

tile house looks up the resources of a the movement of the crops was financed

customer whose account is growing into as usual, business is going ahead at a large proportions. prodigious rate, speculation is rife on It has been estimated that by Aug. 1, the Exchanges, and yet we are lending 1917, or at the end of the third year of

billions to foreign Governments. the war, it will have cost the belligerent And to cap the climax the business man nations considerably over $75,000,000,000. finds his banker grumbling because he Roughly speaking, Germany's share, or, cannot lend money at a rate sufficiently rather, that of the Central Alliance, is

pay it.


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