In a recent number of the Echo de Paris, Fernand Engerand, Deputy for Calvados, said: "The peace which will conclude this unparalleled war will be the greatest event in history, and the treaty which will ratify it must be a masterpiece." Speaking of the weakened condition in which Europe will come to the end of the war and of the desirability of assuring a long peace in which to recuperate he goes on to say: "A long, a very long peace is therefore necessary and this must be the main object of the treaty. The problem to be solved is, in fact, nothing less than to rebuild Europe, for to have a good peace it is necessary to have a good Europe." And now that we are in the war, we may say "to have a good peace it is necessary to have a good world."

The conditions and problems which we will face after the war will depend in no small measure upon the type of peace that is made. If at the peace conference, a peace is made that will in reality be nothing but a latent war, then the nations now at war will be compelled to add, to the enormous fixed charges of war debts and the expenses of reconstruction, the continuing burden of another rivalry in armaments unprecedented in cost. In the same degree that this armed conflict has been unprecedented so will the armed peace that follows it be unprecedented in the extent of defensive preparation if the traditional peace is made. This trio of burdens-war debts, the expenses of reconstruction and the cost of another rivalry in armaments-will constitute a compelling pressure upon each European nation to undersell every other nation in the neutral markets, and will inspire one of the longest and most destructive trade wars of history. So we may reverse the statement of the French deputy "that to have a good peace it is necessary to have a good world" and say with equal truth "to have a good world it is necessary to have a good peace"-a sane settlement of the war.

The two outstanding weaknesses of the peace conferences of the past have been:

1. They have been dominated by diplomats who have represented a more or less fictitious entity-the state-rather than the masses of every-day people who in workshop, store, office, field and home constitute the nation. National prestige has overshadowed the common welfare of men.

2. They have seldom brought creative statesmanship to bear upon the problem of future security. Each peace of the past has carried with it the germs of future wars.

The elimination of these two elements of weakness from the peace conference at the end of this war is fundamental to every social, industrial, political and ethical program of the future. And I am convinced that the elimination of these two weaknesses, while depending much upon a changed mind, finally will depend upon the way the peace conference is organized.

The membership of the coming peace conference must represent a new and more wholesome diplomacy, marked by the following characteristics:

1. It must be more modern. It must realize that its primary function is not to minister to an exaggerated sense of national prestige that smacks too much of the artificial honor of the old duelling days, but it is rather a job of social engineering—so adjusting the relations of peoples that the energies of the world will flow into constructive rather than destructive channels. The men who frame the treaty at the end of this war should in reality be a group of men drawn from the basic work divisions of men in all nations whose experience would make them wise counsellors in the working out of a really scientific management of the world of nations.

2. It must be more public. The traditional veil of secrecy that diplomacy has thrown over international affairs must be lifted to the greatest practical extent. The time ought to be past when five or six men could rush half a world into war over night without consulting in some way the men and women who must bear the burdens of war.

3. It must be more responsible. It is even more important that diplomacy be made responsible than that it be made public. It is, of course, neither practical nor desirable always to spread the record of the foreign office on the front page of the morning paper. But there must be devised means by which the masses can have an increasing control over the game in which they themselves represent the stakes. Heretofore even the democracies have given a blank check to diplomacy, signed with their lives and their resources, and diplomacy has been privileged to fill in the amount. But hereafter democracy must audit the accounts of diplomacy.

This plea for a greater democratization of diplomacy is frequently met with the statement that the man on the street is not interested in foreign affairs. That may have been so. But he is interested in his life, his family and his property, and this war has taught him how largely these are dependent upon diplomacy. The value and security of his job after the war depends in a very real sense on the way the war is settled. In our increasingly interdependent world he must become interested in this matter. He has never had a chance to be vitally interested, and as is true in every democratic experiment he will never learn but by the carrying of

responsibility. But the average man probably has a deeper interest in international matters than we guess. This war has forced men whose thinking has never before gone beyond the bounds of a parish to think in world terms.

I am convinced that the end of this war will offer the opportunity for a decided step forward in the democratizing of diplomacy and in the reduction of the hazards of war for the future.

All belligerents unite in saying that "security for the future" must be the guiding consideration of the peace treaty. It is clear, that a constructive peace that will safeguard the future is not probable unless the principles of the new diplomacy that I have outlined are in control of the peace conference.

A more democratic organization of the peace conference, making it more representative of the fundamental interests of society, is the one move that, in my judgment, most nearly insures the securing of the kind of peace the future interests of society demand.

It will not be possible overnight to reconstruct diplomatic procedure; but the coming peace conference will be different from all that have preceded it and in that difference lies the hope of better things. The conference will come at the end of a war that, as I have pointed out, will have dramatized as never before three things:

1. The necessity for guarantees against future wars.

2. The fact that the world has become so interdependent that all nations are involved in the wars of any nations, even though not as combatants.

3. The fact that modern war throws burdens upon all classes and all men whether soldiers or not; that the farmer, the merchant and the mechanic must sacrifice at home as the soldier sacrifices on the firing line.

With these facts so clearly proved, it seems to me that our government will have the opportunity, in the peace conference, of striking a new note in diplomacy. It will be pertinent to suggest that since the problem of security of the future underlies the fortunes of all classes and is so intimately involved with the future. industrial and social development of the world, there should be included in the membership of the conference responsible respresentatives of the fundamental interests of society, such as business, labor, agriculture, etc. Such a suggestion coming from the United. States would doubtless bear great weight. The United States might well take the leadership in the making of diplomacy more

representative and responsible not only by suggesting such a policy to other nations, but by setting as an example the men it selects to represent it in the peace conference.

If there should prove to be insurmountable obstacles to so complete a break with diplomatic traditions as the appointment of direct representatives of business, labor and agriculture would be, then might it not be feasible to attach to each diplomatic representative a counselor from each of the fundamental work divisions of society?

It is the duty of every business man, of every professional man, of every thinker and worker, as the most important part of his planning for the future, to study the forces that will shape the end-of-thewar-treaties, and to ally himself with his fellow citizens in an attempt to shape the treaties for the good of our own nation and the world. Because, as I said in the beginning-In the years succeeding this war business success, social advance and political progress will depend more on the kind of settlement that is made of this war than on the individual plans and initiative men and women bring to any particular piece of work.

BOOK DEPARTMENT

THE BUSINESS MAN'S LIBRARY

ACCOUNTING, AUDITING AND COST KEEPING

BENNETT, R. J. Corporation Accounting. Pp. xxi, 563. Price, $3.00. New York: Ronald Press Company, 1917.

This is much more than a book on corporation accounting; it is more properly a treatise on organization from the legal, industrial, financial and accounting standpoints. It appears in seven parts: Part I describes the process of organizing a corporation, discusses the different classes of capital stock and shows the purpose of the various corporate meetings; Part II takes up the special books and records required by corporations, and analyzes the distinctive corporate accounts relating to capital stock, bonds, surplus, dividends and reserves; Part III is devoted to special descriptions and accounting entries relating to stocks, dividends and processes of incorporation; Part IV treats bond issues, including a description of the different classes of bonds, their security, methods of issue, amortization of discounts and premiums, sinking funds and redemption; Part V explains and illustrates the balance sheet, income statement, and various other special reports and statements; Part VI is devoted to consolidation, including merger, lease and holding company; Part VII takes up receiverships, reorganizations and dissolutions. Much more space is devoted to general descriptions than to pure accounting discussion.

It is difficult to make an appraisal of the book. It will probably serve as an excellent handbook for practical business men who wish a broad view of corporate organization, finance and accounting. The discussion is unusually clear, simple and informing. Except for incidental suggestions, the book is likely to have little value to the practicing accountant, for it is too general in treatment, or to one interested in the more scientific aspect of accounting because it is not sufficiently analytical. It may serve very well, however, as a text for college classes on account of its forms and clear descriptions.

There are several more or less important positive criticisms that may be made: (1) There is considerable repetition. Most of this could have been avoided by better organization; the arrangement of the subject matter is not strikingly logical. (2) There are several explanations or views which do not agree with the more precise modern concepts; for example, capital stock as a liability of a corporation (p. 18), treasury stock as an asset (p. 22), premiums on stock or bonds as a profit (pp. 88, 95), bond discount as a nominal deferred asset (p. 96); but these are matters of interpretation, and they are not particularly misleading. (3) There would be considerable gain, both from the practical and scientific standpoints, if more emphasis were placed upon valuation and upon the statistical significance of accounts. Altogether, however, the book is a very useful contribution to the American literature on accounting.

Princeton University.

JOHN BAUER.