modern ports and canals, is often cited as one of the main causes of the relative industrial backwardness of France, and of the increasing invasion of French territory by enterprising German, Belgian, or Swiss capitalists. A more potent cause assuredly is the fact that a large proportion of French savings is systematically exported abroad, on the pretext of assisting needy foreign states, while affording safe investments to the French 'rentier' but, in reality, with the object of securing monstrous profits which benefit only the banks in question, a few intermediaries, and a certain section of the press, and with the result of developing the wealth and the defensive force of rival peoples, favoring the depopulation of France, and preparing the gravest complications for that country in case of a European war." The whole "defeatist" propaganda in France is an aspect of these "gravest complications." Concerning Germany and the rest of the world, David Starr Jordan writes in the World's Work for July, 1913: "In Germany we may fairly regard the Emperor as the centre of a gigantic mutual investment organization, with its three branches of aristocracy, militarism, and finance; all the powers of the state, military as well as diplomatic, being placed at the service of the combined interests. In so far as other nations are powers, the fact is due to the influence of similar interlocking combinations. This is certainly true in England, France, and Russia, and the dollar diplomacy of the United States, now happily past, was based on the same fundamental principle. . . . In Europe the governments everywhere frankly make open cause with the interests. The foreign offices are, therefore, for the most part, little more than firm

names under which these interlocking syndicates transact their foreign business. . . . A large percentage of the international troubles of the world arise from this one source, the use of governmental authority to promote private schemes of spoilation."

The remedy for this condition is obvious. What moves the banker is his enormous profits. The opportunity to make these at the expense both of the foreign power and home investor must be removed, while the legitimate functions of the banker, to concentrate capital and to make it swiftly and easily available, must be secured and regulated. By putting the control of loans, concessions, etc., in the hands of the International Commission on Undeveloped Countries, the first end is secured. China or Persia will not be able to float a loan without the license of this Commission whose business it is to safeguard the interests of such countries. To attain the other end, the useful concentration of money, will be a duty of The International Finance Commission. Licensed by the first Commission, any one of these countries will then appeal to the second. The second will announce the conditions of the loan, the terms of interest, its duration and security, to the whole investing world. It will receive bids from all investors, regardless of nationality or financial power. It will have power to market bonds if necessary. Its own charges or commissions will cover only the cost of the operation, and it will regulate the commissions and fees of the banks. In this way it will effect a great saving both for the borrowing country and the lenders. The amount saved ought to go toward a universal standardization of wages.

Its other, and perhaps prior, function would be to regulate the money-market, to standardize exchange and credit and to prevent depression, panics and disorganization. To do this it would need to become custodian of the international gold-reserve and to organize an agency like the American Federal Reserve Board. Financiers have realized this need some time ago. "European financiers," writes the American Exchange National Bank in its September letter, "have watched and studied the operations of our Federal Reserve system more closely than have Americans. English and French bankers have had long experience with central banks of discount backed by their Governments, and are therefore capable of judging the merits of our system. They have seen how our Federal Reserve Banks, advised by the Federal Reserve Board, have stabilized our banking system and prevented panics and stringency in American money markets under the most trying conditions created by the outbreak of war in 1914.

"While the United States is sailing on an even keel as far as its finances are concerned, great confusion prevails in most other countries, which is evidenced by the excessive premiums and discounts prevailing in markets for foreign exchange. These inequalities will not be easily removed at the end of the war, because so many countries are practically bare of gold, while the United States holds more than its share of the world's supply. One of the great problems of the near future is how to prevent the existing stock of gold from being scattered and thereby deprived of usefulness for reserve purposes.

"Taking our Federal Reserve system as a guide, the

suggestion has been made in Europe that an International Reserve Board be created by the allied countries to stabilize international currency and exchange. This Board would regulate the issue of international gold notes which should be legal tender at face value for all payments in the allied countries and in others that entered the circle. In this way most of the world's stock of gold could be conserved for reserve purposes.

"It will be remembered that many financial lights of that day predicted that the United States Treasury would be drained of gold when specie payments were resumed on January 2, 1879. When the day came the predicted line did not stand waiting for the doors of the New York Sub-Treasury to open. Nobody wanted gold when paper was just as valuable and much more convenient. So it would be with international gold notes, if confidence in them could be inspired."

As the function of stabilizing international credit is distinct from that of foreign investment, the International Finance Commission would best be divided into two subcommissions, one on Political Loans and Investments and one on the Stabilization of Credit.

THE INTERNATIONAL COMMISSION ON ARMAMENTS

Armaments have been held, and by many persons still are held, as the chief guardians of national security, and the agitation in America for universal military service and colossal arming has grown in intensity from the beginning of the European war. This war has given an enormous impetus to the American

munition makers. Their profits run into billions, and the profits of great banking firms like the Morgans, who lent the Allies money to buy the stuff the munition makers make, have been correspondingly great. Bethlehem Steel, Midvale Steel, General Electric, duPont Powder, Westinghouse Electric and American Locomotive Companies, centrally controlled by a few great banking powers, have made most of the blood money. Since America's own entry into the war their profits have been curtailed, but they have been expanding their plants, multiplying their stockholders and spreading their investments. As Congressman Clyde H. Tavenner has shown,' many of their stockholders and directors are members of the National Security League and the Navy League, and of all the other agencies who identify patriotism with preparedness and for whom preparedness is a source of profit. They are denouncing as unAmerican all people who do not agree with them and all legislators who voted otherwise than they thought proper. Much of the war sentiment of the country is with them, and when the war is over, if they have their way, the United States in common with the rest of the world will be saddled with the burden of an enormous military program, and the rest of the game whose watchword here is "dollar diplomacy."

Are they right? Is it true that in armament lies security?

On the contrary, every candid examination of the history of Europe prior to the war must lead to the conclusion that armament provokes provokes insecurity.

1 Speech, House, February 15, 1915, “The World Wide War Trust.” Speech, House, December 15, 1915: "The Navy League Unmasked.”