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only real guarantee for a long and fruitful international peace. For that matter, it will at most be only a partial compensation for the enormous losses inflicted on us by the war and the invasion. We shall, indeed, have an obvious opportunity, without any violation of accepted rights, to effect a radical redistribution of metallurgical power. It will be long before Germany can pay off the heavy debt of reparation into which she has plunged herself by her unjustifiable aggression and her continual barbarity. It is in accordance with old-established international law—the precedent of 1871 is there to prove it—that, in so far as she shall not have discharged her debt, she shall furnish territorial and other security therefor. The official pledges—stateowned mines and railways, customs, etc.—will certainly be insufficient. And just as we can and should think out, in this connection, the organization of an Allied control over the working of the great German ports and German commerce, so we can and should conceive also of the exploitation of the mining districts of Rhenish Prussia and Westphalia. The whole of Lorraine, with its annex the basin of the Sarre, will have passed er hypothesi to France. Here will be an opportunity of superintending the destination and employment of the coal which is extracted and the iron which is worked in such enormous quantities in these districts; we can prevent their being employed in the preparation of new wars or to facilitate the export of other products of German industry; we shall have legal international power to restore them to exclusively peaceful uses. In this way we shall be leading up, through a period which must necessarily be very lengthy, towards that permanent solution which alone can
protect Europe effectively against a return of the disaster from which she is suffering today. While leaving the inhabitants of these districts in full enjoyment of political and administrative autonomy—for no one of the Western Allies dreams of imposing on them an enforced subjection—they must be made the economic rampart of the West against Central Europe, as Luxemburg was made by Germany, after Sadowa, a rampart against France. They must be compelled to enter the economic system of the Allies. We must continue to control the exploitation of their minerals and the destination of their manufactured products in the interests of humanity at large, neutrals as well as Allies, instead of abandoning the material profits and political strength which can be drawn from them to the “bandit Powers.” If the Governments and diplomatists of the Allies are not capable of realizing, at the moment when peace is concluded, these fundamental facts of the situation, it will not be long before their eyes are opened by the march of events. It will not be long before they realize that, in reasoning and acting otherwise, they have been the dupe of philosophical, legal and literary conceptions belonging to another age than that in which we live.
Having dealt at some length with the matters which, as it seems to me, it is essential to include in the treaty of peace, I should like to say a few words on certain internal reforms which it will be necessary to make both in France and in Great Britain, in order that we may rise to the height demanded by the situation which we shall have to face.
Let us not deceive ourselves; we have to struggle, first of all, against an inveterate tendency of both the French and the British mind, that is to say an excessive individualism. Both we and you are jealous, immensely jealous, of our independence, of our privacy, of our freedom; so jealous that we sometimes allow a useful enterprise to fail, if it is set on foot by others than ourselves, rather than co-operate to make it a success. It is hardly necessary to insist on this point. A little reflection will bring it home to each one of us; and fortunately there are signs of an awakening. Already some of our industries, and perhaps more of yours, have begun to act on a recognition of the fact that the future will necessarily belong to large enterprises, to large associations. It must belong to them because, on the one hand, it is necessary to reduce the cost of production, and, on the other hand, if we are to compete successfully in foreign markets, it is absolutely necessary, in order to take advantage of the incontestable superiority of our products, that our penetration of these markets should be organized and systematic. A noteworthy example of this tendency in France is the fusion of the co-operative dairies of the region of Charente and Poitou, the result of which has been that, whereas twenty years ago they were making a butter that would not keep for twenty-four hours, their products now rank immediately after Normandy butter both on the Paris and the export markets. We have established satisfactory organizations for chinaware and many other products; and similar organizations are at this moment in process of formation in the dye industry and the manufacture of railway material. In these industries great and powerful groupings are coming into existence, representing, in each case, almost the whole of the enterprises concerned. I hope that we shall continue on these lines—not on the lines of the Prussian cartels, nor in the direction of State
enterprise, of which I am no advocate, because the State is absolutely incapable of that spirit of decision which is essential to commerce— but on the line of spontaneous groupings which secure the best practical conditions of production and unity of commercial representation. How great, in France, at least, are the obstacles opposed to such progress by the inertia of tradition and the mutual jealousies arising from a system of unrestricted competition may be seen from a recent unhappy instance. During the last weeks of 1916, M. Meline, then Minister of Agriculture, who was rightly concerned at the scarcity of manual labor arising from the war, set up a Commission to investigate the best means of extending the use of agricultural machinery. That Commission did not dare to recommend to the Government the immediate purchase of machines from French manufacturers, for fear that some amongst them might be favored at the expense of others. The result was what might have been anticipated. The need was urgent and it soon became necessary to buy the machines abroad. In striking contrast to this excess of individualism is the growth of economic organization in Germany, which was so remarkable before the war and which is today receiving still further extensions. As always, the first object kept in view is the preparation for war. If there are any who doubt the imperious necessity which is laid upon the Allies to adopt an adequate commercial organization, they would do well to ponder the conceptions of Herr Walther Rathenau, a Director of the Allgemeine Electricitätsgesellschaft and of the Imperial Department for Raw Materials, as reprinted in the “Temps” of December 24, 1916. The basis of Herr Rathenau's argument is the
necessity of developing a "service of raw materials” (Rohstoffabteilung) which shall become the nucleus of an “Economic General Staff.” Herr Rathenau candidly admits that he would like to call it, not “the service of raw materials,” but “the service of war economics" (Kriegswirthschaftsabteilung). He is concerned that Germany should never again find herself "insufficiently prepared” for war. “All the future years of peace should be employed in this preparation, and that to the full height of our capacity.” For the accomplishment of this purpose he has three principal measures to propose: first, the construction and maintenance of enormous stores, under Government supervision; secondly, an official statistical research into the whole resources of the Empire; thirdly, the preparation of a general plan of "economic mobilization,” to be recast from time to time, according to circumstances.
Herr Rathenau works out this idea of economic mobilization in some detail. He calls for the preparation of "marching orders” in some such form as the following:
On the second day of mobilization, you will go to such and such a house in the Behrenstrasse: there you will assume the directorship of such and such an economic war association which will at once be formed and the rules of which will be given to you. It will be for you to supervise the formation of this association, and to set up the various committees connected with it.
receive an order for so many articles of such and such a kind.
Everything concerning the allocation of labor, including the question of exemption from military service, must be decided in time of peace. At the same time a political-commercial department is to be engaged in the conclusion of agreements with neutral countries and the formation of organizations in those countries in order to thwart "violations by enemy countries of the laws relating to exports.” Special bureaus are also to be set up permanently for the purpose of centralizing imports and exports during the war and maintaining the rate of exchange. Finally, Herr Rathenau sagely remarks: “The question of after-war legislation will require very special attention, and I suppose that an Economic General Staff will be set up for the purpose of concerning itself actively in this field also."
In the face of such preparations, and with such motives, on the part of the enemy, it surely behooves the Allies also to set aside everything which hinders the organization of their economic resources. In order that we may do this to the best advantage the consumer as well as the producer must be willing to co-operate. I know the attraction of cheapness; I know the satisfaction of “beating down” the price of a purchase. But there is no more absurd mistake which the consumer can make. To pay for any article what it is fairly worth is to take out an insurance against ever having to pay too much for it. We in France should have suffered less from the economic consequences of the war—and I suspect it is the same with you—if both our Government and our people had not helped to kill a number of our industries by permitting cheaper foreign products to oust them from our markets.
The same thing is to take place in the case of machine factories and other industrial enterprises. They too are to receive their instructions:
On the third day of mobilization you are to give up such and such a part of your factory; such and such a machine is to be placed at our disposal. At the same time you will
There is another matter which
concerns us most closely, but which may have some lessons for our Allies, and that is the necessity to clear our minds of the spirit of petty economy. At the present time a debate is going on which seems to me to illustrate only too well the French attitude to business affairs. In December, 1914, the Government decided, and rightly, that the losses suffered by the invaded districts should be borne by the nation as a whole. We cannot yet estimate the amount of these losses, but I know that for Lille, Roubaix and Tourcoing alone they are reckoned at 900,000,000 francs. This is not only a matter of sentiment, though sentiment counts for much in this connection. It is obvious that the restoration of industry in these regions will be a most important means of alleviating the burden imposed by the re-establishment of the economic equilibrium. It is to our interest therefore to give generously and to give quickly. Yet what do we find? A fairly satisfactory settlement has been arrived at with regard to the reconstruction and re-equipment of the factories, but for over eighteen months a discussion has been raging on the question of raw materials. In Roubaix alone the Germans have seized raw wool to the value of 300,000,000 francs. The Government has offered to the manufacturers the value of the wool at the date when it was seized. The manufacturers reply: “Yes, but that three hundred millions' worth of wool would now cost six hundred millions. If you give
us only three hundred millions, we'
shall have to restart our industry with only half the raw material we possessed in 1914. Our production will be fifty per cent less and we shall only be able to employ half the number of workpeople.” And no agreement has yet been reached.
This is, as one of our great northern manufacturers has called it, “a policy of drop by drop.” At the Paris Conference on June 17, 1916, our Allies proclaimed their willingness to share the cost of restoring the invaded districts, so as to revive their impaired economic powers. And now, when Great Britain, Russia and Italy declare themselves ready to share the burden with France and Belgium, the French Government is saying, “There is no need for us to take all that you offer us. We are so much afraid of giving one penny too much to one of the war victims.” It is not in such a spirit of petty bargaining that the difficulties before us can be successfully encountered.
Short as is this sketch of future requirements, I hope I have made it clear that at the present moment there is no task more urgent, more acute, and I should like to add, none nobler, than that of devoting ourselves to the economic restoration of our country. But to fulfil this task we need to be deeply impressed with one fundamental necessity—the necessity of excluding, from our consideration of the economic problems of the future, the spirit of routine to which we were accustomed before the war. At this very moment, when the Socialists themselves begin to see that they have been the dupes of German Socialism and resign themselves little by little to the limitation of their international relations to those with comrades in the Allied countries, at the moment when the Allied Governments proclaim it to be a fundamental necessity for liberal Europe to develop a sort of economic federation with protectionist tendencies in order to protect itself against militarist Europe, there are, I am sorry to say, Frenchmen who dream of resuming, on the morrow of the war, their accustomed little trade, buying from the same
Great events crowd upon us so thickly in these days that we are apt to miss their full significance at the moment. It is for this reason, I suppose, that our operations in Mesopotamia and Palestine, with all they involve and portend, have attracted comparatively little attention in this country. Military experts and ministers have gone out of their way to insist that Turkey-in-Asia is, after all, only a side issue, and that we must be careful not to make too much of Sir Stanley Maude's brilliant achievement. One member of the Government in a public speech referred to the subject mainly, as it would seem, to impress upon his hearers that “it is a damned long way from Bagdad to Berlin.”
It is; and no doubt we shall not crush the Prussian autocracy or choke the U-boats by victories upon the Tigris. Nevertheless, the advance of Maude's army up that river is much more than a mere local success. For my part, I believe that when the history of the world-war is written, with due regard to perspective, the Asiatic campaign will be deemed little inferior in importance to any other episode of the memorable spring of 1917. The Revolution in Russia, the German retirement from the Somme and the Aisne, the declaration of war by the United States, the coming of China into line with the Western Alliance—all these are world-shaking events. But so also is the expulsion of the Turk from the old capital of the Caliphs. For what it signifies is no less than the new birth of a nation; it implies the emancipation of a people
who once created great empires, who gave the light of religion to Asia, and that of learning and science to Europe.
The Arab race, long weakened, disinherited, and degraded by its political divisions and the brutal
tyranny of the Turanian barbarians, is coming into touch with Western civilization again after centuries of isolation and neglect. And when this union is consummated great results may be expected to ensue. For the Arab intellect in the past has shown itself singularly responsive to external influences, and able to draw the best elements from any alien culture with which it is in close contact. From the Turk, indeed, it has gained nothing, for the Turk had no culture worthy of the name, and never attained excellence save in war and government, chiefly by forcible methods, and by arts he did not care to impart to his subject populations. But Persia, Greece, Rome, Byzantium, and Latin Christianity taught the Arabs much, and they proved themselves apt pupils.
“When they met Rome they produced Palmyra; when they met Byzantium they produced the brilliant Ommeyad civilization; when they absorbed Sassanian culture they produced Bagdad; when they invaded Spain they produced Cordova.”* They
-built great cities as well as great
States, so that the wastes of Irak, Mesopotamia, and the Syrian desert are strewn with the imposing remains
of their temples, their palaces, their
*These words are taken from a brilliant and interesting article in The Times of Februa 20th, 1917, by a writer who is described, wit evident justice, as "a distinguished authority on Oriental affairs."