The War

Veterans and

"T. R., Jr."

by reason of his father's eminence. He is well aware that the peculiar welcome he has been receiving everywhere is in large part intended to remind him of the country's regard for his father. But the younger man has been observed, in these last weeks, with keen eyes for his own qualities, by hundreds of men of his father's generation, and they have found him worthy to stand in his own right. He is in his thirtysecond year, and before going into the army he had served an apprenticeship of a number of years in business after leaving college. He had meanwhile been a close student of political affairs from his father's standpoint, with his brothers.

Our Defense Problems

The organization of world-war veterans should not only be

of mutual aid to millions of

young men, but it should help

the discharged soldiers of all ranks, in one national patriotic body. Men whose names and characters inspire confidence will take the initiative. Foremost among those concerned with this project at the outset is Lieutenant-Colonel Theodore Roosevelt, Jr., whose recent return from France with a record of valiant service at the front has brought him into exceptional prominence. Sometimes public favor is fickle, yet it is fairly reliable in the long run. The late President Roosevelt's place in the affection and esteem of the nation is as fully assured as that of any American who had preceded him. The thought of a trustworthy and competent son succeeding a respected father is one that makes universal appeal. The second Theodore Roosevelt, eldest of the four brothers who served in the war, has never sought favor

lem of national defense through the general training of young citizens for patriotic duty. While militarism of the type that made Germany a menace can no longer be tolerated, there will be good reason for the universal training of young men to serve the community in military as well as other ways. The Swiss system is not a menace, and it meets the needs of defense. While Congress will be studying these matters, and while the army general staff and the war department will have plans, it is probable that in the near future the policies recommended by the society of veterans will prevail. It is important, therefore, that the society proceed in due time to develop its organization and lay out its work.

Nava!

The two services of defense most and Aerial important for the future are Defense Aviation and the Navy. Mr. Collins, in this number, gives us a timely account of the remarkable current advances in the science and art of flying; while Admiral Peary presents an emphatic plea for a National Department of Aviation at Washington. The maintenance of a great Navy is expensive, but naval neglect has been calamitous at several critical periods in our history. Naval preparedness stands to-day, as heretofore, the cheapest and best kind of national insurance policy. The return of Admiral Sims and the arrival of Admiral Mayo's great fleet last month called attention again to the splendid service our Navy had rendered in 1917 and 1918.

Across

the

President Wilson and Secretary Baker last month gave full enPacific couragement to to the Filipino delegation now in the United States seeking the independence of the Islands. The President's cable and the Secretary's speech were well-timed to impress the Peace Conference with the fact that anti-imperialism is something America is prepared to practise as well as to preach. Corea's demands, on the other hand, for freedom from Japan go directly counter to Japanese policies and have no footing at Paris. Japan grows more democratic, however, and the suffrage is about to be extended to large numbers of people hitherto disfranchised. Baron Makino and the Japanese delegates at Paris have won especial admiration for the wise and conciliatory courses they have pursued, in general accord with the American delegates. AntiJapanese propaganda here has failed again.

BARON MAKINO, ONE OF JAPAN'S ABLE STATESMEN AT THE PEACE CONFERENCE

The

Under Way

On April 13, the terms of the "Uictory" Loan "Victory" loan were announced by Secretary of the Treasury Glass. The amount asked for was smaller than had been anticipated,-$4,500,000,000. The new loan takes the form of four year notes which may at the option of the Government be paid in three years, bearing 43/4 per cent. interest, free of State, local and federal normal taxes and convertible by the owner into notes bearing 334 per cent interest, free of all taxes except those on estates and inheritances. The 334 per cent. tax-free notes are in turn convertible into the 434 per cents. Oversubscription will not be allowed and Secretary Glass announces that this will be the last Liberty loan. There is no reason for using the word "notes" rather than "bonds" for the new issue except its early maturity. The campaign to sell them was timed to begin on April 21. One of the most important considerations impelling the Secretary to wait until the last moment before deciding on the terms was that all the time and study possible was none too much, to make sure that the specifications of the new loan should be such as to strengthen the market position of the Liberty bonds already issued, and such as to interfere as little as possible with the prices of other standard securities that tend to suf

Secretary

Much pessimism has been in eviGlass dence as to the ability of the Is Confident Government to float an enormous new loan when the intense patriotic stimulus of war times has ceased, in a year when excess profits taxes and income taxes are already taking about eight billion dollars from the American people, and at a time when the outstanding Liberty bonds are selling at such a heavy discount. It is also true that business profits are low as compared to their height in the period of active war purchases. Secretary Glass has had, however, no doubts as to the success of the issue. In public statements he has pointed out that the depreciation in the outstanding issues of our Government bonds has been the result of artificial causes, and that no one could be found who did not believe the Liberty bonds would sell above par before they matured. The Secretary pointed out that our present national debt was less than twenty-five billion dollars and that, after all the war bills were paid, it should not exceed thirty billion dollars, against which we shall hold some ten billion dollars of obligations of foreign countries; and that this net debt is "the barest fraction of our national resources."

Our Debt Compared to Europe's

With a net public debt of twenty billion dollars, there is an average indebtedness of about $200 for each man, woman, and child in the country; but in the case of France the average debt per capita is $1000. It is true, too, that we have not suffered by the loss of foreign lendings as France has, nor by the devastation of our best industrial districts. Also, during the war we have changed from a debtor nation to a creditor nation, while England has changed in the reverse direction. Our financial burdens are, indeed, the smallest among the Allies, with the exception of Japan's. In proportion to her wealth, Japan's debt is about 4 per cent.; ours about 8 per cent. Debts of other Allied countries run to nearly half their national wealth. The cost of our Civil War looks small as compared with the cost of our participation in the World War; in the former we spent about four billions, considerably less than one-seventh of our expense in this war, although it lasted only one-third as long. But we are very much more than seven times as strong in resources as we were in 1865. It is the duty of the country to take the "Victory" bonds, but it is to the self-interest of the country, also.

Steel and Coal Prices

It is unfortunate that there should not have been a complete understanding among the departments at Washington in the matter of Secretary Redfield's attempt to stabilize the prices of basic commodities, such as iron and steel, coal and lumber. The Industrial Board created by the Department of Commerce to confer with our captains of industry in an attempt to arrive at fair prices for the basic commodities (which meant, of course, lower prices), did so confer and actually succeeded in arriving at agreements by which, for instance, $47 was to be the new reconstruction price for steel rails as against $57 quoted in the market. It was believed that industrial operations would take a new lease of life when purchasers knew that there was for a time, at least, a pause in the downward tendency of prices and some temporary equilibrium. The project seemed to be going well until it was halted by the refusal of the Director-General of the railroads to accept the terms for steel rails that had been agreed on and recommended as "fair" by the Department of Commerce's Industrial Board. Mr. Hines' refusal to allow the railroads to pay the agreed prices was based on his opin

Promise and Performance

When Director-General McAdoo took over the railways, he informed the Senate Committee that the roads were already earning $100,000,000 per year more than the "standard return" promised them during Government control, and with economies to be effected through unified operation he confidently hoped for a profit to the Government. The critics of private railway management sharpened their pencils and figured the profit the Government was going to make at various sums ranging from $400,000,000 to $1,000,000,000 yearly. As a matter of fact, in spite of rate increases, which have added something like $1,100,000,000 to the income of the roads, they are showing these huge deficits. How can it be? The answer seems to include three factors, two of which are more or less determinable: huge increases in wages, huge increases in the cost of steel, coal, and other supplies, and a lessened efficiency in labor under Government operation. Since the Government took over the roads, $910,000,000 a year has been added to the payrolls, which, with the increases given by the private operators in 1916 and 1917, makes a total wage increase of $1,260,000,000. The Interstate Commerce Commission allowed the railroad companies to add $100,000,000 a year to their rates, and the Government added $1,000,000,000 a year in 1918. Thus, before the factor of increased cost of supplies is reached at all, there is a net deficiency of $160,000,000 a year, the amount by which wage increases exceed the rate increases. The railroads buy about 30 per cent. of all the bituminous coal mined, and their total coal bill is $470,000,000, which has increased over pre-war years by no less than $250,000,000. They are paying $250,000,000 more for steel products, so that already we have a deficiency in income, as compared with pre-war years, of nearly $700,000,000. Greater costs of materials and supplies other than steel and coal will greatly swell this, so that it is not difficult to understand the present inability of the roads to earn their keep.

months just ahead. The most pressing single piece of domestic business that will confront Congress in the extra session that will probably be called in May is a resolute and thoroughgoing handling of the desperate railroad situation. England is having an experience similar to ours, with the same causes operating. Sir Eric Geddes recently announced that England's railways, costing the Government $100,000,000 a year, "were earning practically no income." That the cost to the English people looks so small beside our railway deficit is, of course, due to the fact that their roads aggregate less than one-tenth the mileage we have. In England, too, the fundamental cause of the bankruptcy is the necessity for increasing wages faster than rates.

Our

One bright place in the lurid af

Stupendous fairs of the world is our wheat Crop of Wheat belt. Nature has done us and the greater part of the civilized world a striking kindness in a year of need. With Russia's great granary producing, amid Bolshevik chaos, only a quarter or a third of its usual supply of wheat-certainly not enough. for Russia's own needs; with Hungary and Rumania so far behind normal production that those two countries will do well to be able to take care of themselves, Europe will look this year chiefly to America to be fed. The American winter wheat crop is very much the largest that has ever been indicated. Plentiful moisture, widely distributed over the wheat-growing areas, has brought the fields to a phenomenal "condition," which the Agricultural Department estimated, on April 8th, to be 99.8 per cent.; some great wheat-growing States like Kansas were credited with a condition of 101 and Ohio with no less than 104 per cent. But not only is this average condition of 99.8 per cent. much the highest percentage on record the tenyear average is 88.6--the acreage is also the largest ever planted in this country. Furthermore, the unusually prosperous condition of the wheat fields is very widely distributed. Among the States having one million acres or more of wheatfields even the lowest in percentage, North Carolina, shows 96. The Department figures on a total winter wheat crop of 837,000,000 bushels,-about double the average annual production in the five years before the war, and 50 per cent. more than the average crop of the war years. The value of this winter crop alone, at the guaranteed price of $2.26 a bushel, amounts to nearly $1,900,000,000.