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1. Specific References on the Section.
See $8134-139 above.

Clapp, E. J. Economic Aspects of the War. (New Haven, 1915.)
Anon. “Industrial Organization," in N. Y. Times Current History,

V, 710 (Jan., 1917).
Anon. “Allies Economic Conference” (June 14 to 16, 1916), ibid,

IV, 923 (Aug., 1916.) Program adopted by Allies for “War

after the War.” Parker, Sir Gilbert. "England: Whither Now?" in ibid, III,

418-423 (Dec., 1915). Extravagance in British life during the

war. Lloyd George, D. “England's Munitions Campaign,” in ibid, III,

829 (Feb., 1916). Lippman, W. L. “Integrated America,” in New Republic, VI, 62.

(Feb. 19, 1916). Anon. “Economic Dictatorship in War," in ibid, XI, 37-38

(May 12, 1917). Richberg, D. R. “Democratization of Industry,” in ibid, 49-51

(May 12, 1917).
Anon. “Democratic Control of Scientific Management,” in ibid,

IX, 204 (Dec., 23, 1916).
Meredith, W. M. “The New Science,” in ibid, X, 372-374 (April

28, 1917).
Anon. “The Second Line of Defense,” in ibid, X, 339-340 (April

21, 1917). Anon. “Reorganizing War Administration,” in ibid, XI, 40-41 (May

12, 1917). Anon. “Priority," in ibid, X1, 67-69 (May 19, 1917). On govern

ment committee on priority of shipments. Bruère, R. W. “English Labor and the War,” in ibid, XI, 106-108

(May 26, 1917). : Anon. “A Program for Labor,” in ibid, x, 312-313 (April 14,

1917). West, George P. “Labor's Unpreparedness," in ibid, X, 157-158

(March 10, 1917). Hard, W. “Munitions,” in ibid, XI, 100-102 (May 26, 1917). Brodney, Spencer. “Woman's Invasion of British Industry," in

N. Y. Times Current History, IV, 52-55. (April, 1916).
Caine, Hall. “War Industry,” in ibid, V, 423 (Dec., 1916).

Women in industry.
Haines, Chas. O. “Our Railroads and National Defense,” in North

American Review, vol. 211, pp. 385-394 (Sept., 1915).
Anon. Mobilization of Industries. (War Dept. Doc. 517). (Wash-

ington, Govt. Printing Office, 1916.)
Gompers, Samuel. “Labor,” in World's Work, XXXIV, 27. (May,

1917). Demands of labor in war times. Hurley, Edward R. “Business in General,” in World's Work,

XXXIV, 30 (May 1917). Business co-ordination under national

direction necessary in war times.
2. High Power Production of Military Material.

(a) Warships.
(b) Food for the troops.
(c) Equipments and supplies.

(d) Ordnance, especially big portable guns.
3. Concentrated Organization of Transportation.

(a) Merchant shipping
(b) Railroads of the U. S.

(c) Motor transportation of every kind. 4. Governmental Organization Suitable to Handle This

(a) Departments of the Government.
(b) Council of National Defense.

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(c) Associated and Subordinate Committees.
(d) Centralized direction of National Food Supply, Munition

Supply, Railroads, etc. (e) The President and Congress as Representatives of the Nation. 5. Documents and Extracts on the Section.


Tariff COMMISSION). INDIVIDUALISM, SOCIALISM AND NATIONALISM. I shall start far from the immediate subject by suggesting to you that, disregarding the theories of individual philosophers, there are three, and only three, general theories of society, or theories of historical development, which have been held in modern times by large numbers of men, and which have directly influenced the policies of nations. These I shall , call individualism, socialism, and nationalism. To the individualist the activities of the present day and the whole course of history are to be interpreted as a struggle between individuals, each seeking his own welfare under the guidance of enlightened self-interest. To the socialist the history of mankind presents itself as primarily a struggle between classes within a given society, each class attempting to secure for itself privileges, prerogatives, and the lion's share of power and material comfort, and each class in turn being overthrown through the rise of a new and more powerful class. Finally, the nationalist reads history as a record of struggle between political groups, races, or nations, and looks upon the problem of national survival, expansion, and supremacy as the vital concern of mankind.

All of these theories have an element of truth and each in turn is likely to be disregardful of the significance of the others. The individualist refuses to recognize the fact, or at least refuses to recognize the necessity, of the struggle between classes and the struggle between nations. He looks upon the interests of labor and capital as harmonious and equitably adjusted by the play of economic forces, and he largely disregards national boundaries as playing any essential role in relation to man's welfare and prosperity. Thomas Cooper, an early president of King's College, New York (now Columbia), said that the word "nation” was merely a grammatical contrivance, corresponding to no reality.

The socialist, on the other hand, fails to recognize the importance of competition within groups and sees little but the united forces of one class facing those of another. At the same time he is as cosmopolitan as is the individualist and believes that the mutual interests of classes throughout the world are powerful enough to break down national boundaries and to make struggles between nations impossible in the future. I leave it to you to search your own minds as to how far you also, with your ideas of the importance of national struggles, disregard the element of truth which lies in the other two theories....

The last theory of society to which I have referred, namely, that of nationalism, is historically the first, but I have put it last because it has been vigorously revived in recent years, both on the basis of new theories of science and on the basis of changed economic conditions. For centuries the bitter struggle between racial and natural groups was so patent and obvious a fact that it was generally accepted as the all-important factor of human affairs, without much theorizing regarding it either on the part of the statesman or on the part of the philosopher. ...


It would be hard to exaggerate the change which has come about, both in historical writing and in political thinking, as a result of the theory of natural selection. History has been largely rewritten in the light of this new philosophy, and more and more has the economic element come to be emphasized as the determining factor in the history of national struggles. . . . I have referred to the early period of mercantilism, when every weapon of a nation was utilized to advance its own interests at the expense of rivals. These weapons were various, including protective tariffs, prohibitions and bounties on exports and imports as the occasion might demand, commercial treaties, the arts of diplomacy, and finally war.

The last 25 years has seen the development of a neomercantilism which, although more enlightened in detail than the commercial policy of the seventeenth and eighteenth centuries, still takes as its starting point the rivalry between nations rather than the harmony of their interests, and uses, or stands prepared to use, the weapons of that earlier period. From the doctrine of individualism spring the ideas of free trade, economy, and perpetual peace. From the doctrine of nationalism spring the ideas of protectionism, economic independence, the necessity of increased public expenditure, and the inevitableness of war. ...

The growth of industry made the problem of control of neutral markets a crucial one for the prosperity of industrial nations, and the rapid growth of population suddenly brought mankind face to face with the problem of the ages; namely, is there room on the earth for the indefinite expansion of all competing races? If not, who shall get off the earth? Which races shall expand and exploit the world's material resources, spreading their own peculiar civilization at the expense of others? Here we have the problem of the struggle for survival and natural selection, not as a scientific theory of the evolution of lower organisms, but as a practical problem of the moment for every nation to face. What race is meckly going to admit its own inferiority without a struggle, and calmly step aside to make room for the expansion of its rivals? . · Ideas of this kind are laughed at by many of the most in

telligent people in the United States, and it is not unnatural · that such ideas should be little recognized in this country in

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view of our past history. In the first place, we have always considered ourselves largely isolated from the rest of the world and exempt by our geographical position from the problems of the older nations. In the next place, the extent of territory and the great natural resources of this country made the problem of the pressure of population on subsistence seem almost a ridiculous fancy. ...

EFFECT OF COMMERCE ON WAR. First, then, what is the effect of commerce on war? For many years it was maintained by the group of writers most influential in their day that the growth of commerce inevitably meant the end of war, as certainly as it had meant in the past the end of piracy and the lawless regulation of individual affairs by the sword or the pistol.

Economic historians of the present time, however, have dealt with the historic problem of war in a very different spirit from the writers of one or two generations ago. It is now generally recognized that commerce, or at least the economic problems of subsistence, has been not a deterrent of war, but more than any other one thing a cause of war in the past.

Has anything happened to stop this age-long result of commercial rivalry? The most recent wars, such as the Boer War and the war between Russia and Japan, have unquestionably been primarily economic in their nature and, if I have been correct in my statement regarding the economic changes of the last generation and their effect in increasing race consciousness and feelings of international hostility, we may be sure that even more completely than in the past nations will seldom go to war except for commercial advantage, but will ultimately resort to arms when convinced that by victory they will secure for themselves the necessary means of maintaining or expanding their commercial welfare.

Again, it may be said that the United States are not subject to the laws of economic and political development of European nations, and that any commercial gain through war is an impossibility for this country. Such a view seems to me shortsighted in the extreme. We are already in touch with the problems of European politics through our island possessions; we maintain the doctrine that the whole American continent shall be removed from the future aggressions of foreign powers; and we are already reaching the point where the problem of the pressure of population on subsistence is no longer so distant as to be disregarded, but may become a vital problem even within the lives of children now living. ...

EFFECT OF WAR ON COMMERCE AND INDUSTRY. Can anything now be put on the credit side to show that war is not always and in every way a deterrent to economic welfare? ...

In the first place, it is only through war that modern states have been formed, with a strong national government and the possibility of a genuine national economic policy which took the place of the local and territorial economies of an earlier period.... Furthermore, war and colonial expansion have always gone hand in hand, and the development of colonial empires has been one of the important factors in the growth of modern capitalistic production and commerce. ...

The fact is that war acts in a twofold way. The enormous commercial contracts involved in a great war have in the past made possible the accumulation of large individual fortunes and at certain stages of history, at least, such large individual accumulations have been a distinct spur to great savings and consequent investment on a large scale in industrial enterprises which, in turn, have increased the capital of the community as a whole.

Secondly, the growth of capitalism requires the development of a new psychological type of industrial leader. This new leadership depended on the capacity to undertake vast enterprises requiring consummate ability in organization and direction and the capacity to wait patiently and work continuously for results which could only be accomplished at some future date. But it is exactly in the field of military organization and warlike enterprise that these capacities were first developed. ...

VITALIZING EFFECT OF WAR. The growth of industry and trade does not depend solely on the growth of capital and the quantity of labor, as was commonly assumed by the writers of the peace and free trade era. Equally important is the character of leadership in the industrial field, and by this I do not mean only the ability to organize and co-ordinate the forces of production on the part of the captains of industry; I mean also the more subtle qualities of confidence, faith in the future and speculative daring. These are vital elements in commercial progress, but they are of peculiar psychological character and are affected by many influences which are not at all economic in their nature. Is it not to be expected that under the impetus of a great war, when national fervor is at its highest point and the spirit of daring and sacrifice pervades the community, that these influences should also be felt in the field of business, and that men should confidently undertake enterprises which in calmer times would have seemed staggering and impossible in their nature? I believe that on this point ample evidence could be found. ...

Our Civil War offers many examples of the same kind. The vigor of business life in the North throughout that great conflict is still a matter of amazement for the economic historian. Here again the influence was twofold. The huge Government contracts acted as an extraordinary degree of protection and encouragement, but equally important was the fact that the same spirit of forward endeavor which animated the armies in the field also animated the leaders and the rank and file in the domain of business. ...


No allowance was ever made for the enormous reserve productive force which can be called out in time of emergency.

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